What is your thoughts on Co-investing/Armchair development?

Hi PCers!

What are your thoughts on investing in property development funds?

Here are the details:

- Minimum investment of $10,000.00
- Secured returns of 12% p.a. (net of all fees)
- Diversified investment portfolio
- 2nd mortgage security
- Investment duration up to 24 months
- ASIC Registered
- Redeemable preference shares
- Investors returns paid first before the developer

Please share your thoughts,

Thanks,

Greatly appreciate.

Jack

 

If you are thinking about it because you dont hav enough for a deposit but want to do something involving property.....

 

Good is subjective. You have 5 mil in net and want to jump returns on the cash part of your portfolio, and have a strategy to get out well before it hits the fan? Maybe.

But you have no control and a second secured mortgage means nothing. The preference share, length of investment, none of those are guaranteed. Everything depends on how good the developer is and what the market does. You are taking on the part the banks dont want and the developer cant find funding for at 12%. Think about that. The bank thinks its too risky or want higher returns, and the equity provider want a cut of the profits, not a capped return.

If you have 50k and think this is a cheap way to get into property without thinking about the cycle? Bad.

You putting cents on that minimum amount is a big flashing sign.

 

Run!
(Away)

 

Do you understand how the 2nd mortgage security works?..The solicitors would make more when it goes belly -up..

 

Totally correct.
You have to ask yourself why / how 12% is on offer when there is cheaper finance available. Red flag.

 

I’m pretty sure someone else on here went with ‘armchair development’. It took years, was way over budget, and wasn’t worth nearly what it was marketed as.

Do a search for ‘armchair development’ you may find a lot of answers.

Blacky

 

So jack, what did you do?

 

Is this from the mob up in QLD, forgot his name?

 

High risk of never seeing a cent after all what obligation is imposed on the company to pay any dividend ?? (A - Likely none !!)
Likely a concern by ASIC if it hasnt issued a prospectus and satisfied all regulatory requirements. A private company cannot do this.
Unsecured - What security is given to a shareholder ? Thats rubbish to say its secured when its a second mortgage. Maybe cents in the dollar not 100 cents in the dollar.
What "fees"... How can the shareholder get a return after fees and be paid first ?

 

Are you thinking of this?
ASCF - Australian Secure Capital Fund

Richard Taylor, I think he used to post here?

To be fair they do offer first mortgage based investments.

 

The bloke from we find houses but can remember his actual name

 

Paul Wilson
Has anyone had any experience with him?

 

If you can't do it alone, don't do it at all. You have no idea of the scams going around in the real estate world until it's too late..and by then your money is gone.

 

Jack, I had a bad experience with a similar company - Viva Properties. I lost all of what I invested. So, I'm a little wary of these. It was a good lesson though. I now invest by buying my own property and doing my own homework.

 

I firmly believe that anyone who doesn't take the time to do some self study for 2-4 months and learn this craft from the basics up, shouldn't be contemplating any course. Courses often have their own biases and if you don't get a well rounded 'education' on this game, you are likely to be doing yourself a great disservice.

In reality, no one can make you successful but you (doesn't mean you don't engage with others to help you succeed). Anyone who is serious will learn this stuff for themselves from the ground up such as building a team, goal setting, strategies, leverage, CF vs CG, finance, growth drivers, due diligence, negotiation strategies and tactics, buying strategies, traps to avoid, demographic due diligence, add value strategies, dwelling due diligence, risk profiles, market cycles, etc etc . The nuts and bolts of this game.

 

I totally agree. The scammers and con artists that exist rely heavily on the many people who want to pay to take shortcuts and who don't even do due diligence on the courses they're thinking of taking (or the people involved).