one of my largest clients has the following to offer
One of the options we are looking at is getting people to pay say a $300K deposit released to us on a $375K H+L package in Darch and we deliver the completed property to the investor late next year.nearly like an option but with a return on your initial premium paid...!
Its not a loan, its a deposit. The investor signs an O+A with a $300K deposit released to us.
Investor gets 25% return on their $300K investment in equity. Happy to guarantee the rent at $375 per week for a couple of years. We can sell the finished property For them at guaranteed $375K if they want a cash return.Click to expand...
these guys are not in the slightest bit dodgy. they do everything by the book, with contracts and have a very serious name to uphold.
if you're interested, please call me or PM me personally and i will put you in touch.
just some thoughts BC....
- I thought it was illegal to release the deposit?
- could this be construed as a managed scheme?
- what if they go belly up?
- if you had $300k cash couldn't you do this yourself and pocket the developer's margin?
dunno mate. i would have thought it would be a private negotiation of sale....?
either way, if it is illegal - i'd love to hear.
Not suggesting they are dodgy, but I am risk averse and like to know what's securing the deal I do - i.e the deposits are held in Trust.
How is your money secured (for you) if they are able to access the deposit?
It seems that you are freely letting them use your money for the development, and they promise to return it to you with another $75k on top for your trouble.
But what if the development goes belly up and the money "disappears"?
Is the 300k all you pay or are they suggesting you pay 375k total for the H&L package? I would consider it. Cheap form of financing. Take the interest costs out of the development equation.
just $300k. Why would you give someone cold hard cash of $375k in advance to have a property at the end worth.... $375k?
how is it cheap financing?
i think they see it as a way to end up paying $375k for a property worth $375k.
i imagine there would be a bit of fruit in it for someone looking to help out.
But what if the development goes belly up and the money "disappears"?Click to expand...these guys have a successful exit strategy in place for all developments before $1 is put down. i know, i'm part of that process.