Your question is open to a variety of cost estimates/feedback which could be more confusing [inaccurate] than beneficial.

My recommendation is to work out approximately how large the townhouses will be [square meters – finished area], how many bedrooms, bathrooms and other features, i.e. garage, they will offer [subject to zoning and planning…[Read more]

“I dont know enough about ING and Citibank”

ING is one of the largest financial/insurance institutions in the world – Citibank is the largest banking group in the world, with ~US23 billion in revenues last quarter.

Although I personally do not have any affiliation with the two, I consider both more stable and less resistant to economic and…[Read more]

If your sole intention is to find land for “subdivision” then personally I do not put this in the same category as “development” – unless you intend adding improvements [beyond basic utilities].

If however your intention is to locate land for building SFH’s, apartments, multi-use, etc, then the fact that desireable locations are already…[Read more]

“unsure as to the difference between a promissory note and a second mortgage.”

They are more or less one in the same.

However, a “second mortgage” is more often defined as a mortgage obtained by way of a financial institution.

A “promissory note” is typically a formal loan agreement/contract between the borrower and a private lender – or…[Read more]

“many developers have what the business community describes as ‘land banks'”

Correct. Real estate development/investment is all about “leverage”. The objective is to establish as much equity in land or other holdings as possible, for as few dollars [capital investment] as possible.

This in turn compounds borrowing power expedientially.

“Large…[Read more]

Even as a “dual citizen” it is likely the factors I have highlighted will come into play – unless you permanently reside in the country where the property is being acquired.

— Michael

In general,

unless you have sufficient assets [security] in Australia to finance an offshore property via an Australian lender – subject to foreign regulatory approval and filing requirements;

are a permanent resident of the country of interest with sufficient assets [security] in that country;

or have a registered corporate entity with…[Read more]

“With an option you do not have to state any conditions.”

Correct. However, an option is nothing more than a “contract” between two or more parties. On most occasions this contract will include some form of condition. An example being, if the option is not exercised in x days/months, the contract [option] expires.

“The 1-2% is your fee for…[Read more]

“If I buy a house for say 1M, and the vendor will lend me 100k, would he get a 2nd mortgage/caveat/joint venture/etc?”

— a “promissory note” is recommended as confirmation of the loan arrangement between you and the vendor.

If the vendors debt is subordinate only to a primary lender [i.e. bank] – there are no other institutional lenders…[Read more]

Unfortunately the current Reserve Bank Governor [Bollard] is being dictated too by the Government [Cullen] – my understanding, based on discussions with closely associated representatives – and Bollard himself, is Bollard was chosen for this role because he is willing to let the government set the rules.

Traditionally the RB maintains more of an…[Read more]

It appears that you’re seeking a cost [budget] analysis rather than a feasibility study – which is conducted prior to starting a development to demonstrate if the project is feasible.

There is no specific format because costs associated with your project may not apply to other developments, and vice versa.

If you are concerned about the budget,…[Read more]

For those in New Zealand [or Australia] interested in a quality property related course, I recently reviewed information from Massey University.

They appear to offer very good programs for those wishing to learn the fundamentals of real estate development, management and/or investment.

I understand these programs can be conducted by way of…[Read more]

Feasibility studies are subjective and vary according to the type of development, finance considerations, market conditions, and many other factors. Therefore another developers study is not likely to assist you.

If you are seeking a “format”, or guideline, this information can be found on the Internet.

— Michael

Have a non-disclosure agreement [NDA] drafted which restricts potential investment partners, or otherwise, from copying the idea.

Use a qualified lawyer – do not try to cut corners if this is a viable concept.

Registering the name will not protect the individual if someone wishes to copy the business model/concept, and IP [intellectual property]…[Read more]

Every development is different and subject to many variables – speak with a qualified lawyer and accountant.

— Michael

Securing “options” on land or other property – controling for no/minimal money down, is the foundation of real estate development/investment.

First rule, restrict the use of real estate agents to locating the property. If possible, source the property yourself. Always submit the offer directly.

If you don’t understand the process, or the market,…[Read more]

“the bank will have trouble selling the property to anyone other than myself”

— This is very unlikely. The bank [primary lender] will sell the property at a discounted value [at times 30-50 cents on the dollar] if necessary in order to recoup outstanding principle.

This generally attracts multiple buyers/bidders and ensures a prompt sale -…[Read more]

After reading your posts and the various feedback, I would suggest [as an experienced developer] first finding out your rights under the zoning regulations – as recommended.

The key to a successful development, small or large, is to not cut corners – from a cost perspective – and employ qualified and experienced people as needed.

Your posts…[Read more]

Apart from potentially breaching securities regulations, why would anyone become involved in an “investment team” when all participants are [apparently] inexperienced. It would amount to no more than the blind leading the blind.

If the writer is seeking advise and/or mentors, then approach this forum accordingly.

It would appear the writer has…[Read more]

The same scenario attracted media attention in the US a month or two back.

If it appears to be a con – or too good to be true, then it usually is.

Do not respond to these emails. If they don’t get your money, they on-sell your email address and whatever other details they can gather – which may have been the case on this occasion.

— Michael