Hi all,
Here is the scenario.
– Successful partnership in property development – Melbourne metro. (tick)
– 6 projects completed + 2 under construction all returning profit. (tick)
– Close network of people for future projects, i.e., architect, builder, lender. (tick)Currently, we are looking for individuals who are financially sound to fund future projects (entirely).
Obviously, a percentage of total profit will be charged as a fee post project completion.Total project spend: between $1.5m – $3m
Whilst I don’t believe I will find people on here to be interested, I’m wondering whether or not anybody could point me in the right direction?
Kind regards,
JHi Jon
Being a smaller development you might find someone interested.
I assume the land etc will be in the investors sole name so not sure why anyone with the cash would not do it themselves.
We would get an enquiry a week from developers asking me whether we would be interested in privately funding their deals but most of them the returns are not sufficient so it is easier to do the developments ourselves.
What sort of ROR would an investor be expected to receive ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
And would the developer the second cut of sale profits, eg you get paid…..after the investor gets their guaranteed rate?
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This reply was modified 8 years, 9 months ago by
DeanCollins.
why anyone with the cash would not do it themselves.
A myriad of reasons Richard. As I’m sure you are aware, being in the insutry for quite a while:
a) many people do not understand the process involved
b) HNW individuals focus on their own occupation and have no experience in developing
c) provides a second income stream
d) cashed up but time poor
the list goes on…
We are currently looking after a client who has the funds and serviceability to complete a development but is too time poor and does not understand the process.What sort of ROR would an investor be expected to receive ?
That is dependant upon the profit to be made. As an example, >50% of the gross profit would be distributed to the financier and a ‘fee-for-service’ type arrangement would be paid to the developer.
And would the developer the second cut of sale profits, eg you get paid…..after the investor gets their guaranteed rate?
I hope the above answers your question Dean.
Generally the developers I know will provide a % return over x time through purchasing units in a trust. this might be 10-20% over 12-18 months and or stock at a set value which is below market price. Not impossible, but you need to find the right people.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Thanks Corey,
I understand and we will look into this.
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This reply was modified 8 years, 9 months ago by
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