Anyone have any thoughts on the Acacia Banks development in Bendigo and the companies offering investors blocks of land under an option agreement.
<removed – 23 November 2012>
"This post has been removed following receipt of a legal threat of defamation on behalf of the lawyers acting for the developer. As it was impossible to verify the truth of the claims made in the reply, we had no option but to remove the post.
However, as always, we suggest investors complete a thorough due diligence on their potential investment before purchasing any property, and this would normally include:
a) Checking the credentials of the developer, including previous projects they have been involved with, and their present financial strength as per recent financial statements (paying careful attention to liquidity and debt service ratios).
b) Asking for names of previous purchasers to inquire as to their experience in dealing with the developer.
c) Ensuring the development is covered by the necessary insurances to protect you should the developer go bankrupt during construction.
d) Researching the owners of the development company, and in particular, past and present relationships with promoters and real estate sales agents.
e) Completing web searches of the name of the developer, and also each owner, at http://www.asic.gov.au and relevant news sites to see if there are any recent and relevant articles that speak to legality, integrity and performance.
f) And, of course, an analysis of the merits of the investment against your needs as an investor.
If you are unwilling or unable to complete the above then caveat emptor – let the buyer beware!
As a general comment, and without having completed any of the above for the developer or the project that this post pertains to, the principles and philosophies of this website would normally discourage investors from acquiring land or new development property as an considered investment. For skilled and knowledgeable investors, there are likely to be better returns, with less risk, elsewhere.
– Steve McKnight, CEO of PropertyInvesting.com"
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