Opencorp

That's great!

 

We bought our second IP with Open Corp, in June 2015. It was a H&L package, 4br House in Griffin QLD. Cost about $503k total inc costs and their fee of nearly $10k. The property was bulit quicker than anticipated and we had a tenant in 1 week after completion - $430pw rent. The communication and transparency of the whole process was very professional. I would recommend them and will be using them for my next purchase.

 

Pinewood, did you end up looking further into Open Corp? If so, how did you go?

 

LoanShark, just a few questions.
Are these guys mortgage brokers and they also recommend where to buy?
Also, do you pay the $10k in fees per property that you buy through Open Corp?
They had a whole day seminar in Sydney last month that I was supposed to go to but chickened out at the last minute. Kicking myself now.

 

No not mortgage brokers. They use Acceptance Finance as the broker for our finance. Honestly I don't know why they need to do the seminars....it does, in my opinion, show them up to be trying too hard to source clients. Like all those dodgey spruksters in the early 2000's (So I am a bit sceptical when I see them doing the seminars)They shouldn't charge for the seminars if they do it shouldn't be hundreds of dollars. When we started using them in 2015 I don't believe I saw any ads for seminars....now 2 years on they are doing them in the major cities twice a year. I have yet to ask them why but perhaps they are looking to expand. I know this is one negative in an otherwise positive review. Worth noting.

 

I did, but decided not to pursue. I wasn't keen on the areas they were selling in. You can get a one on one consult with them and see if it's for you, also depends which state you want to buy in.

 

I'm new here so please be gentle. I am going to try to quickly summarize my experience with OpenCorp. From what I remember, I somehow came across Cam's book 'The 4-Year Old Property Investor' about 2 years ago. Found it easy to read and pretty insightful, especially the bit about buying in infill areas.

I wanted to arrange a meeting with them but my wife was anti-property so it didn't happen till a bit later. I finally turned her around when I told her how much tax we were paying and how property investment could help reduce this.

First meeting was with Victor who gave us an introduction and overview of how they operate. Nice young guy who was a property investor himself. He said if we were serious about moving forward, the next meeting would be with Dennis. Anyway, we met with Dennis who spoke further and gave us some H&L package options in Greenvale, an area that we had never heard of. Whilst I was keen to go ahead my wife thought their fees were excessive so we decided not to move forward with OpenCorp. However, we did end up visiting Greenvale and then decided to buy a piece of land and build ourselves.

This turned out to be a great move. The house was completed three weeks ago and equity growth already is conservatively $60-$80K. Pretty good considering the whole package was $500K.

Anyway, during the process of building our Greenvale house and before my wife was to go on maternity leave (and therefore affecting our borrowing capacity) I suggested to her that we consider investing in another property. By this time, she had come to realise how valuable OpenCorp's research was as well as so many other small but important things that OpenCorp covers. Things like the peace of mind knowing that everything is included eg. landscaping, fencing, depreciation schedule, property management, introductions to property tax specialists, good mortgage brokers etc

So I called Victor and explained our situation and of course he wanted to know if we were serious this time. I assured him that we were and he had Dennis call me. Dennis emailed me some options in Queensland for us to consider. I took a few days to review it but by that time those options had been sold. So there was another nearby option in a slightly better location and bigger land and of course a little more expensive. I checked out the area online (Thornlands) and we decided to pull the trigger.

The Thornlands property building process was extremely smooth, there were no issues and it was surprisingly fast. The house was completed and even rented out before my Greenvale property was finished building, the main delay being late land settlement.

Investing through OpenCorp has been such a hands-free and enjoyable experience. There was no hard sell. During the building process Nat our Relationship Manager regularly emailed updates and photos of our house under construction. The Property Management team communicated clearly and actually updated us weekly about when and how many prospective tenants they were showing our house to.

My fingers are getting tired now and I really should be doing other things but basically I cannot say enough good things about OpenCorp and we look forward getting another property with them as soon as we are able to.

 

Sounds like you had a great experience!

What was the cost of the Thornhills property vs the completion value? Did you make a decent amount of equity?

Also, did Opencorp require staged payments during the build? Or was the balance due on completion?

Thanks in advance, interested in the figures

 

Hey Connor, I'm not sure on how much I've gained with Thornlands but it is an infill area next to Victoria Point which is quite established. I paid circa $560K and haven't had it valued since.

The reason I know Greenvale has gone up that much is my wife has been monitoring prices on Realestate.com.au and also we walked into the PEET land sales office in Greenvale and saw how much they are selling now.

Yes, OpenCorp's builder required staged payments in exactly the same way as our Greenvale place.

Hope this helps

 

I've been approached by Opencorp in the past. I gotta say I am very glad people have had positive experiences...Especially lexus_lover.
My experience was that I was being buttered up and sold to quite heavily from the start. Was told i'd be mad not to go ahead with a purchase. The company offer PI advisory but only sell new builds? They might be doing the right thing by their clients but I'd always be dubious when they only want to sell you new H+L packages. Further alarm bells are when they build in rental guarantees and sell the deal to you as "costing you nothing a week". Buying in a decent area shouldn't have trouble renting out I would think?
Further, I found their story around who owns the land and who does the building just a touch off putting. After much pressing I did find out they get kick backs from the volume builders they use in the deal (don't know if the young bloke on the phone was meant to tell me that but he did).

Not sure if you went ahead with them but I'd suggest approach with caution with all H+L offers. All the frills they offer are usually built into the cost of the property (not to mention builders margin and in this case fee to opencorp).
Do your research on the demographics of the area, look at supply (including how much vacant land is left) and if the deal doesn't seem right, walk away.

Good luck

 

Agree with everything you've said @DRichoY - they are trying to come across as completely transparent and helpful, but really when you press about previous "case studies", who the builders are, where they're buying, etc... the stories don't add up. They're in it for themselves - not their clients.

I too am cautious of new H&L builds as an investment property. These people seem to think a portfolio full of H&L is a good thing. Somehow they just work out to be $50 a week to hold - this is BS.

But I think it'd be a good idea to have one or two in your portfolio - if the location was right, there wasn't a crazy supply of land etc.

 

Just thought I would share our most recent purchase from Opencorp, 4,2,2 OTP in Thornlands QLD. Purchased $572k completed May 2017. Bank desktop valuation this week: $570k. Was surprised 'the inflated' price would come back to bite us.

 

I have used opencorp to purchase an investment property in queensland. I am currently 35k out of pocket. this is due to a mortgage broker that opencorp recommended getting my mortgage for 35k less than contract build price. this was my first house and I have learnt a valuable lesson. I had to cover the short fall with a personal loan ( interest = expenses) until the house got built and a new valuation, and this is still in the process, with the mortgage company rebranding, a business partner (my broker) doing a runner. There was no communication with opencorp and my broker and me during the initial phase and this is whats happened. I blame my self 100% for not picking up on the shortfall, but this is why I used an experienced company that gives you the 'whole package' obviously this has not happened. They also use your unseen tax benefits to make the property positively geared which I think should not be the case. The only compensation open corp has offered is a referral to another mortgage broker.

 

I only have passive income from a few positively geared investment properties but am looking to expand. I thought they could help pinpoint good properties with good yield, but after the initial pre-meeting phone call, I was told that my current financial situation won't be enough to service the loan because negative gearing to focus on capital gains is part of their strategy.
So unfortunately opencorp is not suitable for me

 

That actually sounds like they are being responsible rather than just saying any old b.s. to get money from you

If I was you, I would try and understand exactly what you can and can not do based on your salary and circumstances and see if there is something you can do to still move forward with property investment. The first step is education. Read a few of the fantastic books that are out there.

 

Yeah, sounds fair to me.
I agree. That's what I'm trying to do. And I just thought it's also faster and more practical learning to get help from one of these property investment services so that I don't make an expensive mistake. So more reading and some re-reading and will try another company with different strategies more suitable for me.
I signed up for the book and they called me first before I finished reading the book and call them.

 

I thought the same when I initially didn't know how to find the resources to learn myself and found it just too hard and didn't know what to do. I ended up wasting a large amount of money on someone that was worse than useless. I learned the hard way that the idea of paying someone to do the learning for you in this industry definitely doesn't protect you from expensive mistakes and can even be the expensive mistake itself. It was with me anyway. I don't mean people are not valuable and worth paying for - I am saying you need to learn a lot so that you can actually know what your strategy is and can direct the people you hire more closely to ensure what they are doing is in your best interest.

By the way I really liked their book. The only thing that I disliked was the idea of buying H&L packages in outer ring. Everything else they said seemed pretty much on the nose from the other books I read over the past year. Though I would still want to read their book along with another handful so you can get a view of multiple strategies with reasoning behind them explained, so you can pick the parts that suit you to formulate your own strategy going forward.

 

Has anyone actually sold their opencorp investment and what was that like?

 

Great question to ask house and land package groups.
If you apply the growth rates of the median house price then it can seem like a good investment, but where often it falls is if you ask for comparable sales of houses being sold a year or two after being built=you have to think why would someone buy a house a year or two old, when I could go down the road and build one myself/buy a brand new one.

A personal anecdote of a house in Melbourne's outer suburbs showed very poor growth when he was forced to sell only 3 years after purchasing.
Once the suburb fills you will be okay.

Unless I have misunderstood and perhaps Open focus on 'Consolidation' areas-i.e. small plots of vacant land within established suburbs=quite common in regional towns. This I don't know how it would perform-have never thought about it.

 

are the homes fully spec up, or can you get involved in their layout and finishes