I have spoken to an acquaintance that is currently investing money into a Brisbane Developer and getting back 25% return on cash investments. Originally it was meant to return money in the first year but he ended up getting it back in the first 3 months.
What they do is buy blocks of land in sought after location and build turn key homes that include plasma TV and furntiture. They also have other developments ongoing all around Australia.
1.The deal sounds too good to be true and I was wondering is there such deals as this happening?
2.Or is this just a scam?
3.Or how could I loose money if I went ahead and invested.
4.Are there trustworthy developers that allow you to invest from $10,000 and upwards with a 25% return?Hi Rexilla,
It is certainly possible to get 25% on your cash for a good development, but you should be aware of the risks before investing your money. There are a number of ways you could lose your money. Firstly, the scheme could be over leveraged with expensive mezzanine funding, which leave it vulnerable should there be any time delays. There can be delays in building and planning. The developer could overestimate demand for or end value of the development. The fees charged by the capital raising fund may be excessive.
Make sure you do your due diligence on the developer and the specific project or projects before committing any funds.
Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
http://www.perryfinance.comIf you want to PM me the name of the Brissie Developer i can give you an honest opinion. I have dealt with a lot over the last 10 years.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.39%**
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Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
If a developer is willing to pay that sort of interest to ‘mum and dad’ investors, I would presume it means it means they have they exhausted all cheaper and conventional sources of finance. Be careful.
ScottTax Depreciation Schedules
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http://www.depreciator.com.auA lot of these types of investments go bust with investors losing all of their money. Just have a look at the asic website, http://www.asic.gov.au
Terryw
Discover Home Loans
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Has anyone here ever invested into thse developments and actually got there money back?
Originally posted by Rexilla99:What they do is buy blocks of land in sought after location and build turn key homes that include plasma TV and furntiture. They also have other developments ongoing all around Australia.
As per the other comments – if in fact these guys are ‘that big’ I am surprised they need to rely on mums and dads for their funding. If they have developed Australia wide then me wonders why they cannot use their ‘track record’ for finance purposes.
Derek
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0409 882 958
Skype – derekjones2113hi Rexilla99
With regards to these developers 25% is high but is not impossible to achieve as they would have to have a min of 20% in the deal to get lending,
it seems funny that they can give you this up front beacuse why give you 25 % when they could caveat lend at 15 % for 3 months max and thats top mezzanine finance, high risk lending so for me sounds either these guys are not all over Australia or don’t know from a finance point of view what they are doing. both of which would be a cause of concern.
can you lose your money by othe you could and you have not told me, what security you will be holding for this type of deal I would require, caveat min 2nd mortgage signed and dated but not registered and a option on a completed unit as a presale as a min requirement and a personal signed quareentee by a director of the company you are lending the money to.
I had a person looking at 100k with a 10 to 1 return with no security thats alot better then your deal, would I lend no why ,
no security no lend for me as I’m an investor not a loser.
these deal will come up and some can be good but you need to make sure that your —- is covered and you will get your money back and won’t be a case of oh we have to wait until completion and then you will need to wait until we sell so many units or what ever.
not sure if this is also a one on one negotiation if its not the developer would have asic having a chat if they raise more then 2mil or more the 20 people lent them 10k thats 200k which will give you the money to start a duplex currently.
for me check it out alot more and don’t pay a cent unless you get it on paper and only then when the above security is in place and these guys won’t let you lend if you tell them that you want that security and if the do then your position is secured.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Hi
Helped a developer with some finance a few times and had plenty of security.
It can be risky of course but if structured carefully it can be a great little earner.
We knew the developer and have been able to help – and of course have been well compensated – up to 35%
Better than bank interest!
‘ You will never go broke taking a profit ‘
So as an investor if done carefully I can have his assets as secruity so that if the developer screws up they will have to sell there assets and repay the money that I invested?
I would just add that 25% return on cash invested isn’t that impressive considering the risks others have mentioned.
You can achieve a much better return than that, e.g., 60%plus, with far less risk.
These type of returns are possible.
Do you know what a Ponzi scam is? If so, make sure it is not one of there type of deals as the cash will vanish.
This site will give you an idea of a Ponvi scheme.
http://home.nycap.rr.com/useless/ponzi/CATA
Asset Protection Specialist
[email protected]Originally posted by JasonBourne:I would just add that 25% return on cash invested isn’t that impressive considering the risks others have mentioned.
You can achieve a much better return than that, e.g., 60%plus, with far less risk.
Nice Teaser Jason..
I’ll bite..where can you get 60% return with Less Risk
[biggrin]
Redwing
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculatorjust boring old property and shares….no complex products, sorry
If I put nothing into my last IP and its gone from $290k (+Stamp Duty and costs) to $325k (worth more now)in 4 Months..how do you work out the return??
Loan is $232k and rent is $300 p/wk Fully Furnished (so great Depreciation)Self Managed..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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