Due Diligence - on other people , why we didn't invest

Discussion in 'Property Experts' started by See Change, 8th Oct, 2015.

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  1. MTR

    MTR Well-Known Member

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    That is "a pretty woman" moment, love it.
    Those properties will never go up in value, wrong demographics NOT:eek:
     
    MTR, 11th Oct, 2015
    #21
    skater likes this.
  2. aussieshorter

    aussieshorter Well-Known Member

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    Unfortunately many people would prefer to have someone to blame. Failure is easier to take when you can say it was someone else's fault.

    Same reason why some people don't step out of their comfort zone or take a risk going after something they truly want. It's much more comforting to say 'I could have done xxx if I'd wanted to' than it is to say 'I tried to do xxx but failed'. The fear of failure is often stronger than the desire to succeed.
     
    aussieshorter, 13th Oct, 2015
    #22
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  3. Simon Hampel

    Simon Hampel Founder Staff Member

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    To add somewhat to your vindication for walking away - one of the last investment vehicles Steve created for NFS/NI was their "Structured Property Fund" which was supposedly designed to use his "rental reality" approach to selecting good investment property which would see above average returns for the investors.

    During the fallout of the winding up of the company where this fund was sold to a third party (who is still in the process of selling the assets and returning some of the remaining capital to long-suffering investors) - it turns out that the properties purchased were (in just about everyone else's opinion) - vastly over-priced and completely inappropriate choices as investment properties.

    The properties held by the fund in May 2012 were:
    • a pair of units in Wooloomooloo valued at $1.25m each
    • a house in Hendra Qld valued at $600K
    • a house in Wakerley Qld valued at $600K
    • a (desperately in need of renovation) terrace in Paddington valued at $1m - with valuation based on an assumption that a DA would be approved
    • a house in Narrabeen valued at $3.15m (but expected to sell at around $2.5m)
    I don't know enough about the Qld properties to know if they were good deals or not.

    The Henda property sold for $680K in April 2015 while the Wakerley property sold for $700K in March 2015.

    The Narrabeen property was under contract for $2.85m in April 2015.

    I'm not sure how much the fund paid for these properties or when they were purchased.

    I am also unaware of the status of the other properties held by the fund and whether they have already been sold.

    Annual management fee for the fund is 3.075% with operating fees running at around 0.41% per annum.

    Apparently, unit value was $0.5435 as at 31 March 2015 - which constitutes a pretty massive erosion of capital value for investors in the fund.

    I should note however, that the fund was not only invested in real estate - there were some commercial leases and some equities held by the fund as well, which contributes to the overall negative returns from the fund.

    Note - I did not invest in this fund (I didn't like the structure of it or the unproven track record). I'm only aware of this information through my contact with people who were invested in this fund through being a client of NFS.
     
    Simon Hampel, 13th Oct, 2015
    #23
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  4. skater

    skater Well-Known Member

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    Yikes! He did originally promised a copy of his share market analysis software (for free), and I think that was before the physical meeting, but when I took him up on his offer, he decided that he wanted payment. I can't remember how much it was now, but that put my nose out even more.

    All I can say is that I'm glad that he treated us as he did.:D
     
    skater, 13th Oct, 2015
    #24
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  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    Probably around the time he was trying to commercialise the IP which eventually became the managed fund. I know of a few people who did get access to his software and reported varying degrees of success.
     
    Simon Hampel, 13th Oct, 2015
    #25
  6. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I managed to get hold of a copy of that software and paper traded it for a few months. It lost money and thus I didn't invest in the fund (I didn't have much cash to invest back then anyway).

    It was really just an excel spreadsheet, abet reasonably complex. I did like the fundamentals of the system, but it just kept loosing money. I must see if I can find a copy of it sometime and play around with it some more.
     
    Peter_Tersteeg, 13th Oct, 2015
    #26
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