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Playing big - Retirement Units

Discussion in 'Development' started by Melbpositivegeared, 24th Apr, 2016.

  1. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    I've always wanted to get into the age 55+ retirement living space and have recently come across some land that would be ideal for 100 units. The seller is happy to part with the land at valuation price, if I take on the DA and then sell splitting the profit that comes from the da uplift. Also potentially open to using their equity to find the deposit to develop the land, same scenario.

    This is above my experience level - by a long shot. Can anyone recommend an expert in this area?
     
  2. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    How are you planning on paying for town planners, council fees, architects, etc etc
     
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  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    May be worth speaking to @Be Developer as he seems to have some good knowledge to give from his past 12 months as a development consultant and has won some impressive awards for his work.

    I have noticed you have made a lot of threads about multi unit dwellings, is this something you have done a lot of to date (buying not making threads) or still doing research before jumping in?
     
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  4. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    Haha love it!
    I've made quite a few threads as of late
    As for multi-units I have my first one in DD phase and it looks like it will settle - I have another serious bid sitting on a block that I'm 50/50 about having come through. I like this space a lot - but I can't claim to be an experienced investor in it just yet. Why do you ask?
     
  5. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    With a money partner! I understand that I'd be talking 6 figures on something this size
     
  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Are you a Dymphna Boholt client @Melbpositivegeared ?
     
  7. Jamie_

    Jamie_ Well-Known Member

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  8. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    Yea I am :)
    Huge fan! Been a student for 5 years now
     
  9. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Just be careful playing with other people's money and getting in too deep, too fast. I know it's been 5 years but I would still be cautious entering into deals that you can't afford to do yourself. There are money partners that have lost a lot of money when deals go bad and people that were able to get into a lot of trouble by continuing to buy thanks to money partners when they couldn't raise their own deposits.
    @Kate Moloney do you have any words of wisdom?
     
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  10. Kate Moloney

    Kate Moloney Well-Known Member

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    Lesson #1 .... never ever infatuate with anyone or become a fan. A mentor is a human being and they screw things up like the rest of us. Use the teachings to increase your knowledge, but don't get fired up or infatuated with them.

    In 2010/11/12 people got fired up on certain teachings (and flawless marketing). They rushed into mining towns and competed against one anther to buy a mining town property that is now sending many people into insolvency or bankruptcy. Do they talk about that at the seminars these days?

    Lesson #2 .... whilst its great that you are thinking big, don't get in over your head or level of experience. Sure, you may get a money partner and learn as you go along, hiring people to help you.

    Here are some things to consider:

    + Could you live with yourself if you lost all your partners money?
    + How will you handle your partners expectations?
    + If this is over your head how are you authentically going to "sell" the idea to get a money partner on board?
    + Do you have the experience or certainty to back yourself up?
    + Would it be wise to start with something smaller, that is still a stretch, but not a leap?

    If you are investing for the long run, take baby steps, you'll get to the bigger stuff eventually. You have to earn your right to risk and that means starting with small stuff and working your way up the ladder. As you do that, you'll gain skills and confidence. Its much better to do this than going all out, losing a big chunk of money (or other peoples money) and then dealing with the guilt and shame.

    + Is doing such a deal fair exchange? If you put no money up then you are essentially taking no risk, whereas your partner is taking a lot of risk, and a big chance on you (when you don't have any experience or skills at this level).

    Whilst it may be great for you, to have lots of reward with minimal risks, it can come at a cost and not necessarily a financial one. If you handle the thought of losing other peoples money and dealing with their potential resentment towards you, as well as their expectations, then go for it. If not, then undertake a steady and safe path, get some experience and then go and do the bigger JV deals when you have certainty and a track record.
     
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  11. Melbpositivegeared

    Melbpositivegeared Well-Known Member

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    Thanks Kate,
    Sorry I should be more specific. When I say a "money partner" in a deal like this it would look like 1 of 2 scenarios.

    1) Someone who has the cash regardless of education/ experience- Having engaged someone with re experience to project manage.

    2) More likely, a large scale developer coming in to the deal and taking the majority of the profits but I come along for the education and a small split.

    I certainly wouldn't bet someone else's money on something this outside of my experience level - all for playing big and expanding but I'm a little way off this yet!
     
  12. MTR

    MTR Well-Known Member Premium Member

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    ouch


    I know and have met a couple of people who are in this group, they are very good at losing money, OPM (other peoples money)... sorry to say, but I am not a fan of DH because I have seen many people get burnt.

    I also am well aware that there are investors in this group who promote deals to prospective mentees and they have neither experience or track record of making money. In fact they have gone backwards, how does that work?

    I can tell you how it works, they need OPM because they lost their own money

    Do you really think anyone who is highly successful in property investing, making money would need DH group??

    The silly thing is from what I have seen is that no one in this group cares about anyone's credentials, because they are blinded by the idea of making millions and will happily continue to pay mentoring fees at $15K a pop and happily take advice from people losing money no questions asked.



    MTR
     
    Last edited: 26th Apr, 2016