My "Armchair Developer" Experience (cont. from Somersoft)

Totally over the top asking price. No one will pay these prices today, even prior to market falling.

 

The Loftus development that one is in is very nice. Super large 2x2 with big living areas - even a walk in pantry.

But yes mid 600s will be hard to achieve. I think high 5s low 6s isn't out of the ball park though for something that spacious. Market will tell

 

It's 66m2 for a 2x2, id hardly consider it super large. And you're at the arse end of Loftus, not really a short walk to anything

Way overpriced imo.


Btw ill be back tomorrow (haven't been home for a few days) so will take that pic for u then @Crido

 

66sqm wow I need to learn to read. Seems much larger

 

$577k turnkey cost for a 66sqm 2x2? Holy moly what a rip. These guys must take a cut at every step of the process - land acquisition, build, development 'management', sale.

 

Plus plus @mrdobalina. I'm pretty sure @Crido slso said they have a body Corp/strata management company that the complex can use.

 

Yes, late last year our Development Manager (Bird Property Group) started a Real Estate Co for rentals and sales (Dominion RE they are called) that also manage strata, but we've managed to avoid using them for strata ... it just seemed all too connected for my liking, and given the track record of delays our development has faced it will be a weight off our shoulders to cut ties. I'm sure everyone who knows this story understands our thinking here, including our those from Bird PG. Our strata is now being managed by i.fresh strata, and so far they've been very thorough.

As for rentals, I think the five of us who are keeping our units and looking to put tenants in are going with De Frietas & Ryan's Perth office for property management (our Dev Manager told us we need to choose just one PM, as he couldn't deal with more than that prior to us vesting/settling), while those six who are selling will be choosing their own agents (and one investor will become a resident).

I'm squinting pretty hard, but ... we can (just) see the light at the end of a looooong tunnel!

Cheers,
Crido

 

Why is that? Seems weird they are trying to dictate to you the PM you must use?

Although, to an extent probably beneficial having them with the same firm - alteast you won't be undercutting each other. I do pity the person with the longest vacancy though.

 

Apparently too big of a work load dealing with the development AND more than one PM, and they haven't dictated the particular PM to use, just that we use only one (we have jointly agreed to use DF&R after considering our options).

Cheers,
Crido

 

Hi all,

I was a member on the original Somersoft and just came across this thread whilst doing some research/due diligence on EOS Property Group. I discovered their "investment scheme" a while ago and subscribed to their newsletter but never took the plunge due to the distance (I'm located in Sydney) as well as the high risk nature of such a scheme

Anyway, just last week I received an email from the company advertising 2 x "oustanding" investment opportunities which came about as a result of 2 of their original investors on 2 separate projects not being able to meet the financial requirements and having to exit prematurely. These are:

1. Unit 2/142-144 Renou St, East Cannington - see "Cannington Property Profile" here
2. Unit 4/188 Loftus St, North Perth - see "loftus_profile_unit_4" here

The reason I'm considering these opportunities now and not before is because the risk profile has substantially changed as they're both nearing completion and the costs are almost all accounted for with a higher degree of certainty. At this point in time, an investor can pretty much tell with 90% accuracy what it's going to cost him/her and I feel a lot more comfortable with that.

I believe the Loftus St development is the same project that the OP is currently involved with and the subject of this thread? It appears that there is a lot of local expertise and knowledge in this thread, other than the OP who is obviously intimately familiar with the project itself. So I'm just wondering if I could ask for your opinion/feedback on whether you think this is a good investment opportunity if my strategy is to quickly flip it for a clean profit upon completion? I understand the margin will be very thin, however, as the investment time-frame is supposedly quite short (assuming no more delays, both projects are due to be completed in 3 months time + allowing another 3 months to sell it on) once annualized the ROI should satisfy my minimum requirement.

Anyway, thanks heaps for all your attention and assistance and I hope to receive some useful feedback for my question.

Cheers

 

I personally think the Loftus St apartment is already $50k-100k overpriced.

 

Brandon
IMO Don't touch this company regardless.

Also the Perth market is falling, and we have an oversupply of apartments. The timing is wrong IMO to buy this product in the Perth market, you will be waiting for growth. Just my thoughts

MTR

 

Hi mrdobalina,

Thanks for your response and feedback. So in your opinion, based on current Perth's market conditions, valuation of the Loftus Street 2BR apartment (unit 4) on offer will come back around $450k-$500k upon completion?

Cheers

 

Hi MTR,

Thank you for your reply and feedback. Based on what I've read thus far, it appears that significant delays in building and cost blow-out are consistent in every project this company has done. Doesn't exactly instill confidence you're right.

In regards to waiting for growth, I'm not planning on a buy-and-hold approach but a quick in-and-out flip so essentially just need to determine whether there will be any margin left upon completion after taking into account all costs. It seems unlikely at this point.

Thanks again

 

Yep. For a ground floor 2x2 apartment with 66sqm internal living.

 

Right
Not sure there is enough fat in these to be flipping and as mentioned as there is an oversupply buyers have choice, so it makes it a risker proposition.

All the Best

MTR

 

There's plenty of fat - for the developer!

 

I cant open these links, can you elaborate, also we need to include stamp duty and selling costs if flipping? Thanks

 

I think you need Dropbox to open the links.

When I say plent of profits for the developer - I meant for EOS Property Group.

 

Sorry, I thought I had lost my mind.

Lack of control is a major issue with these products