Metropole

Patcon,

I have not used them but I was looking x Buyer’s Agents and I have NOT heard good things about them. I have no first hand experience but please be very wary when using them

Hi Landt

We have used them on two accounts: as a buyers agents (in2008) and as a property managers (2009/10). As a buyers agents they have done a great job for us. As a propert managers-we changed them recently. We werent happy. they change staff in property management section too often, employing very junior personel, who did not deliver, as far as we are concerned. We are experienced property developers and know what to expect. they rental estimate was wrong (under the real value). Which was proven shortly, when we secured tenants easily for a 10-20 % higher rent then their estimate.

Are you looking for a JV partner? If so, we may be able to connect you to someexperienced  people.

Sorry all because I have addressed the wrong person: I meant to address Patcon.

Hi Crusty,
thanks for the heads up. I would never be happy using someone who had a past record like that or anyone who associated with them. In my opinion anyone who is capable of those kinds of deeds is not someone who I would want to be associated with in any way, and I will not deal with anyone who works with them.
landt

Hi Ballerina would you like to give an indication of the yeild and holding cost of the property? All the staff seem to change Eddie the strategist left and catherine the BA left. I think they may have found some morals. I was not impressed with the <moderator: delete language> spin and attiude of the new strategist. I also find it strange how negative comments about the above are removed from sommersoft forum.[/quote]

Hi Crusty
Properties in question are three new townhouses, developed by us. old house demolished, three new ones built. Rental yield achieved: 5.7%, thanks to horrible low valuation. Location: Brisbane inner suburb. Rented out for $440/week and $470/week. Metropole's rental estimate was $380-$400. We got our investment out (by refinancing) and are left with 20% equity in it.
(I wouldn't waste our time on Metropole any more).

As for a holding costs, it is not so simple answer. It depends on many things: entity (who owns a property), tax breaks/if applicable, interest rate, LVR (how much is borrowed against the property)…
 For us this properties are neutral, at the moment, since we are using funds to acquire more properties at this point of time, rather than being taxed on the profits made. For now, at this stage of our investment plan.

Where would you like to develop? Being part of the group is safer way to go. However, with 1 mil equity, you can do a lot. Just make sure to really know who you may be working with.

 Thats interesting Ballerina,  In 2009 I Was considering buying a neighboring property  but wanted some diversification and wanted to invest in Queensland with so many options and limited knowledge,  I went to the Melbourne office.   I was told Melbourne is rhe best place to invest .   Ye right, best place for them !    When asked about Land Tax, "dont worry about that its neglible"  didnt know much about it then.  So I went ahead and bought an albatros and slung it around my neck. To find out BC fees are  now 4x what they said, got hit with  2.5 k land tax, increasing insurance, vacancy,minor maintainence issues, rent going down instead of increasing 10% as they said every year, while paying increasing rates =  compounding debt.  Bank wont increase loan  as the price paid was at the very top of price range.    In 2008 and 2010  I did some developing in regional areas they say are bad places to invest . With one the value of my investment increased 15% in 3 months with 5.5% yeild, the other 10% in 3 years but it is nuetrally geared and the rent is rising.    Anyway the neighboring  property had a gross yeld of 12% and sold for 480k  it sold again  2 years later for 580k , so instead  instead of  making 80k for the lease and and 100k in CG, Ive borrowed another 60+k to pay the holding cost and CG only cover the stamp duty  and acquistion cost.   Lesson the grass isnt greener on the other side of the fence. The whole buying process is another long story, but it was like every 2nd week dealing with some-one different.

What we do is different. we find sites ranging from 10 to 30 either apartments of Townhouses and we put investors into the projects to develop and we manage the process. The benefit is that the investors own the site and share in the development margin. I think in this market there are great opportunities but you have to think outside of the square. Many people lose money because they do things that they have no experience in.

Thanks for your feedback. What I was curious about is how you get the cash out of the deal if you are building and holding.

One option is to use a trust- where you lend money to the trust and then repay the loan using a LOC secured against the completed development.

I just am not sure if there is a way of doing it if you buy in your personal name, because if you set up a LOC and then draw it down to put the money as cash into a savings account, the interest will not be tax deductible.

I use trusts because I think they are more flexible and you can 'get money out of the deal' (as the term seems to be) but it would be good if there was a way to do this if you buy in your personal name.

Cheers,
Luke