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Home Explore Fractional Interest Offer Doc Real Estate Template RL1 300621

Fractional Interest Offer Doc Real Estate Template RL1 300621

Published by rick, 2021-07-11 23:50:52

Description: Fractional Interest Offer Doc Real Estate Template RL1 300621


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FINDING DECENT INVESTMENT RETURNS USED TO BE TOUGH. NOT ANY MORE. Earn net returns of 7.5%+ a year on residential property located in metropolitan Sydney

The Probability of Successful Investing you were at a casino, and you and time again; patterns that can help to make walked past a gaming table where you a lot of money. you had a 97% probability of winning, would you stop and play? I was able to predict the precise moment in the last cycle when the Sydney housing market was I imagine that you would (unless you are about to take off, and the exact point in time incredibly risk-averse in which case you when Sydney prices could no longer sustain probably wouldn’t go to a casino!) momentum and keep rising. What if there were two gaming tables side-by- I could tell you with near mathematical certainty side; both playing the same game with the same when the Melbourne market would reach its peak probability of winning - identical in every respect and I was able to model (within 0.5% margin) except one table would pay you 5x the money exactly how much the Sydney market would fall when you won. Which table would you choose? during the COVID pandemic. Hopefully you would choose to get paid 5x as At the time of writing, the average net rental yield much for no extra risk. for housing in Sydney (after you take out all your expenses like rates, property management etc) is In a nutshell, that is exactly what this investment just 1.6% a year. The offer for you in this opportunity is structured to achieve; investing in investment is a net return of 7.5%+ (unheard of residential real estate in markets where up to in Sydney) paid monthly. 97% of investors make a profit and generating net investment returns up to 5x higher without As you read this offer document, we ask that you taking on any additional risk. examine closely how the expertise has been applied to substantially improve investment It’s all about the numbers. returns and how carefully prepared due diligence has allowed us to identify unmet opportunities Now, it might seem strange talking about that can deliver results substantially above the gambling in a report about real estate, but there’s market. a very good reason why I’m doing precisely that. The additional profits on this project will be The analogy of a casino is a good one. If you go shared with you, which is why there is such a and buy property without knowing the numbers high potential return for investors on this and having the right strategy, then you’re relying opportunity. on nothing more than dumb luck and hope that you’ll make money. We are proud of the way that we have developed the profit potential of this project and we look And just like in casinos, relying on luck in forward to sharing with you the fruits of its property investing isn’t going to make you success. wealthy or financially comfortable for the future. Yours faithfully You need to know your numbers, or have someone on your team that knows the numbers. RICK LEIGHTON | It is the best way to avoid making horrible expensive mistakes that can ruin your life. The good news is that property is incredibly predictable when you have the right information at your fingertips. Patterns keep emerging time

CONTENTS 1. The Probability of Successful Investing 2. The Identified Profit Opportunity 3. Investment Highlights 4. How the Investment is Structured 5. About the Property Location 6. How Yields of 7.5%+ Can Be Achieved in Sydney 7. Financial Information 8. About Specialist Disability Housing and the NDIS 9. Key People 10. Project Management and Key Agreements 11. The Offer in Greater Detail 12. Investment Risks 13. How to Sell Your Bricks in the Future 14. What Happens Next 15. Application Form Rick Leighton - About the Author Rick has a professional background in corporate finance, law and forensic insolvency with more than 20 years’ property investment experience. He holds postgraduate qualifications in Applied Finance & Investment, he graduated in Law with Honours and completed his Masters in Applied Law with a double major in Property, Superannuation and Estate Planning. Rick has also completed the Accredited SMSF Specialist Advisor program and Tier 1 studies in Superannuation and General Financial Products. He will shortly complete the professional requirements to be a globally recognised Chartered Tax Adviser. Rick is at an elite level for data analysis, financial modelling, number- crunching and the due diligence common to all successful investment strategies. He has completed several post-graduate research papers on Australian property and real estate. As you research the wonderful investment opportunity on offer, you can trust Rick to answer all your questions and help you achieve all the investment and lifestyle objectives that are important to you.


Everyone loves the idea of buying a property in Coming back to our gambling casino analogy Sydney … if only they could afford to. and the probability of winning, wouldn’t you prefer the odds to be 97% in your favour? Why? Because Sydney is the strongest So if Sydney property is such a safe bet when it performing property market in Australia. Across comes to capital growth and long term all time and economic conditions, Sydney is the investment profits, why hasn’t everybody bought market leader in terms of residential property and a property? capital growth. We all know the answer. Sydney is crazy Now, people in Melbourne and Brisbane may get expensive. Today, the average house price in really grumpy about being trumped by Sydney Sydney is more than $1,309,000 and rising fast. but it doesn’t change the fact: Sydney is the best The majority of people who understand the performing property market in Australia. benefits of investing in property and are keen to build wealth simply can’t afford to spend this A home on land in Sydney (commutable to a much money. Even those who can are CBD) doubles in value every 8.31 years. The concerned about the massive risks associated smaller capital cities are a way behind in terms of with taking on crushing levels of debt. performance. With this investment, you don’t have to. The minimum investment is just $58,500. Sydney property booms are beautifully Meaning you can have the best of both worlds. predictable (if you know the triggers) - with You can invest in Sydney and keep your plenty of signals telling you what’s coming. investment at a level that is comfortable and Nationally, Sydney is the market leader in manageable for you. property. We lead and everyone else follows. Investment income is paid monthly and you can cash in your future profits by selling all or part of We’re seeing a classic example of this right now. your ownership anytime you choose to. Sydney property values are surging faster and earlier than other capital cities. According to Domain, Sydney house prices increased 8.5% in the 3 months to March 2021, “the fastest quarterly acceleration of house prices since Domain records began.” But the really big reason for investing in Sydney? Safety in terms of the likelihood you’ll sell at a profit when the time comes. After all, that’s why we invest. The data table clearly shows us that the vast majority who buy in Sydney make a profit. A whopping 97% of buyers make a profit when they sell.


The Strategic Opportunity and what we plan to achieve • Buy residential land in a high-growth suburb currently rising in value 2.5x faster than the Sydney metropolitan average • Enter a fixed price building contract with an experienced, award-winning NSW builder • Build a dual-income property capable of being rented to both mainstream tenants and disabled tenants who receive funding from the National Disability Insurance Scheme (the NDIS) • Register and enrol the property with the NDIS and • Take advantage of the Government guaranteed income levels for the next 20 years What the Opportunity means for you • Own high-quality residential property located in metropolitan Sydney • Net investment returns are projected to be nearly 5x higher than the average Sydney property net yields • Target investment returns of 14.82% per annum (7.77% cash income, paid monthly plus capital growth projection of 7.05% a year) • Majority of the rental income is paid by the Commonwealth Government for up to 20 years • Minimum investment is just $58,500


How It Works … ┌ A brick represents a fraction of a property ┘ ①②③④⑤ We have secured a prime You choose how many You earn net rental You earn capital growth You can sell part or all of property in metro Sydney bricks you wish to buy income in proportion to in line with rises in the your investment anytime and divided it into 10,000 (The minimum is 800 the number of bricks that property value to choose to. bricks bricks) you own Just like a secure, craftsman-built home is In this Investment Offer constructed with thousands of bricks, this Investment Offer is structured the same way. In • 10,000 bricks are available for sale this investment, the property is worth $975,000 • Each brick sells for $97.50 and there are 10,000 bricks available to buy • Each brick is expected to pay you Each brick that you buy represents a fraction of 7.77% cash return each year; plus the property. You are registered on the Property 7.05% average capital growth each year Title as the legal owner as a Tenant-in-Common. Target 1st year return of If you have purchased property before, you are probably experienced in this type of transaction 14.82% pa without having given it much thought. If you purchased property with your partner or spouse, (increasing each year after that) both of you would be listed on the Property Title as the legal owners. You would either be “Joint Tenants” or “Tenants-in-Common”. This investment opportunity works exactly the same way. You buy a part-ownership of a property with your ownership share being based on how much money you choose to invest. Part ownership is every bit as secure as full ownership because your ownership is recorded on the Property Title until you sell your share to a new owner. You are free to sell any of your ownership anytime you like, completely independent of other part owners. By far the most common question we get from investors is “How easy is it to sell my bricks in the future?” For a comprehensive explanation of how easy it is, refer to Section XX on page 17 of this Offer Document.


Tahmoor is a growing suburban town centre The healthy lifestyle benefits of Tahmoor has positioned within a tranquil rural lifestyle setting. seen property values rise significantly faster than Tahmoor is located approximately 69 kilometres would ordinarily be expected in a developing from Sydney and some 28 kilometres from area. In the past five years, house prices in Campbelltown. Tahmoor have risen in value 2.5x faster than the Sydney average and continue to rise rapidly; Local town planning strategies have earmarked more than 15% in the past 18 months. the Tahmoor precinct one of the major shopping and service hubs for the Wollondilly Shire. It is important to note that Tahmoor is one of the very few suburbs in Sydney that has not had a Strategically, the future potential of Tahmoor is single COVID infection during the entire based around its “city meets country” pandemic (@ 30 June 2021). connection. Rental availability in Tahmoor is scarce and sits The suburb has substantial infrastructure already close to record lows in terms of supply. A in place to accommodate rising population current vacancy rate of 0.52% is one of the growth but is superbly positioned as a rural and lowest in all of Sydney as housing shortages in farming hub that will take full advantage of the Tahmoor become more and more critical. Badgery’s Creek Airport Growth Corridor and the transportation of premium fresh farm produce to The lack of housing options in Tahmoor is also both intrastate and international markets. critical in the NDIS specialist disability accommodation sector. Tahmoor (Wollondilly SA4 region) has the highest percentage of SDA participants looking for accommodation of any region in New South Wales, running at more than 4 times the state average. The demand-to-supply imbalance is severe - with only 2 NDIS properties located in the area (both fully occupied) and 10 disabled people looking for accommodation around Tahmoor. The trends of surging capital growth and property shortages are expected to continue in Tahmoor.


While a property investment in Tahmoor makes The package we were offered was a brand new, sound financial sense in terms of suburb 4-bedroom, larger than typical home. The price demand, capital growth, low vacancy rates, was slightly above the suburb median ($717,500) massive infrastructure investment pouring into but the rental appraisal was also higher at $625 a the region and access to the new Airport, there is week. That pushed the rent yield up to 4.53% one area when the investment was relatively weak and didn’t meet our benchmark. That’s a big improvement, but not strong enough to create passive income. After all expenses, It’s the same issue that confronts virtually every there’s still a chance the property would be Sydney property - low rental returns. Not negatively geared and cost money each week. surprisingly, because Sydney has the most expensive housing, we sit at the bottom of the How we improved the yield - Step 1: table for rental returns across Australia. By conducting an in-depth market analysis of The average rental return in Sydney is a lowly Tahmoor, we started to identify unmet markets 2.50% a year … and that’s before you take out all that represented opportunities to achieve greater your expenses like property management, rates, investment yields. Overall the vacancy rate in water, insurance and maintenance. Tahmoor is exceptionally low at 0.52% (a “normal” market has a vacancy rate of 3-3.5%) Gross Rental Yields by Capital City but Tahmoor has an interesting mix of residents and people who want to live in the area. @ March 2021 Looking at the suburb data, we see that Tahmoor ranks extremely highly for qualify of lifestyle Darwin 5.63% Brisbane 4.07% (8/10), being family friendly (8/10), for tranquiliity, Hobart 4.43% Melbourne 2.65% communications and sense of community (all Perth 4.28% Sydney 2.50% 9/10). Unsurprisingly, Tahmoor is extremely Adelaide 4.13% popular as a place to raise a family. That’s not a lot of money coming in each week against an initial purchase of $1,000,000+. In our professional opinion, in this type of scenario the risk is too high - there’s almost complete reliance on capital growth to make an investment work. If anything goes wrong, your cashflow could quickly be under pressure. A better strategy is to get capital growth but with much higher investment yields so you have positive cashflow and passive income. Tahmoor delivers better than average rental returns compared to the overall Sydney average, but they’re still not as high as we’d want them to be. The average house in Tahmoor generates $438 a week rent, which is a gross annual yield of 3.36%


However our due diligence and discussions with While a gross yield of 5.93% is strong and more local property management experts disclosed a than double the Sydney average, our due substantial market that isn’t being properly diligence unearthed an even greater opportunity catered for. to dramatically improve the yield. Single person households. Tahmoor is one of the most under-resourced NDIS regions in the whole of New South Wales. In terms of numbers, one and two person The Tahmoor region (Wollondilly SA4 region) has households are the dominant markets in the highest percentage of SDA approved Tahmoor; accounting for almost 54% of the participants looking for accommodation of any population. This makes sense when considered region in New South Wales, running at more than in concert with the employment profile of four times the state average. Tahmoor residents. The biggest employment sectors are construction (66% more than the It is an opportunity of incredible unmet demand. Sydney average), retail (29% more than the Sydney average), transport (50% more than the SDA housing is a highly specialised market that Sydney average) and health care. operates very differently to the mainstream housing rental market. The household incomes in Tahmoor correlate with this. The band of households that earn Specialist Disability Housing offers some very $1,000-$1,499 a week are 26% more prevalent in significant advantages: Tahmoor compared to the rest of Sydney. 1. The rent is much higher - depending on Our professional view is a substantial body of the category, we would receive almost residents and would-be residents exist who are in quadruple the rent paid compared to what solid, reliable work (without being exceptionally we would receive as a mainstream rental; well paid) who want to live in single and/or smaller households as a lifestyle choice. 2. The rent is funded by the Australian Government (through NDIS, pension and To cater for this underserved market, we rental assistance) with a payment rate that amended the house design from a single 4- is guaranteed for up to 20 years; bedroom home to a dual-income dwelling that with a separate 2-bedroom unit on the property. 3. Anecdotally, NDIS tenants stay much longer so income streams are smoother and more In that fashion, we meet housing demand for stable. Whereas the average mainstream families and also housing demand for the single tenancy lease lasts around 19 months, and two-person households. NDIS tenants frequently express a desire to stay in the home for life. While remaining affordable in rent, the overall investment yield is substantially increased. Opposing these advantages is the fact that the Adding a second dwelling to the property tenancy process is slower, more difficult and increased the contract price by $142,000 but was more complex. Success comes from being appraised to rent for $355 a week, giving us an completely client-focussed, creating living extra $18,460 gross income each year. The total spaces that make them feel safe, meet their gross investment return has jumped to 5.93% requirements and improve their quality of life. Constructing specialist disability accommodation is also more expensive than regular housing. Depending on the category of the housing (there are four categories, each category catering to a different and more severe level of disability) considerable cost upgrades are required.


To be compliant, a new home might need ceiling If we were to assume that two SDA-tenants could hoists in each bedroom, assistive technology share the 4-bedroom home, then the rent could throughout, voice or sensor activated windows increase from $625 a week (as appraised) to and doors, emergency power supply, upgraded $1,325 a week. While this strategy is possible, security, access ramps, redesigned bathrooms and is a strategy we will seek to implement, and kitchens, structural reinforcements, safety prospective investors are advised to discount this provisions and more. outcome from their decision making process. Our decision was to upgrade the home to the Improved Liveability standard and the unit to a Our experience with SDA housing tenants is that combined standard of Robust and Fully it is extremely difficult to source two tenants to Accessible (which also then complies with share a property for the following reasons: Improved Liveability requirements). This strategy, while highly cost effective, allows 1. Some SDA-approved tenants have special us to compliantly meet the demand of up to 75% needs that preclude them from being able of all NDIS participants. to live in shared accommodation; For a single Robust level SDA tenant, the rental income for the unit is $63,244 compared to 2. The carers prefer not to share properties $18,460 as a mainstream rental property. due to logistical and financial liability issues. The cost of upgrading the house and unit to This means you need to rely on one these NDIS standards is $74,000. Investing an provider for multiple tenants which they are extra $74,000 now generates an extra $44,784 in not always able to provide; extra rent from the unit alone every year. It represents an exceptional return on investment. 3. Most disabled people (and their families) The property is now able to generate double-digit have a clear preference for living alone or investment yields, and offers returns that are 4x with an able-bodied friend / family member, higher than the average rental yield for a property rather than strangers. In a recent tenant in residential Sydney. survey (May 2021), almost 71% of people searching for SDA properties to move into Prospective investors should note that the expressed their preference was to live alone property has even greater income potential if the (47%) or with a family member (24%). 4-bedroom home was also offered to NDIS, tenants rather than able-bodied tenants. It is our professional view and experience that securing three NDIS tenants for the property is possible but carries considerable extra risk in terms of delays, vacancies and income loss. While a 13.99% gross yield is something we fully intend to strive for, our professional view is that the greatest return for the lowest risk sits with the hybrid model of a single NDIS tenant in the unit and a mainstream tenant for the main dwelling. In summary, through careful due diligence and identification of unmet demand in the market, we have been able to create a property that delivers a double-digit income yield. Through value-add investing, an additional investment of $216,000 (for the unit and full NDIS upgrade) gives us the capacity to earn an extra $98,072 rent every year with the majority of the rent income originating from the Commonwealth Government.


This Section provides details of the following The following assumptions have been applied: financial information assuming the sale of 9,000 bricks for the sum of $877,500 by the closing • Main dwelling rent of $31,850 based on date of this Offer. local expert appraisals for the property In consideration of ASIC Policy Statement 170 • SDA dwelling rent of $60,714 derived from Prospective Financial Information, this Offer does Pricing Arrangements for Specialist not contain financial forecasts. This Offer Disability Accommodation 2021-2022 Document does however contain forward looking statements and best-estimate assumptions. • Vacancy rate of 2% and 4% respectively These forward looking statements have been have been applied to projected incomes predicated on certain material facts that the company expects to take place. No assurance is • Property management fees set at 7.7% for given that the results, performance or main dwelling and 11.0% for SDA dwelling achievements expressed or implied in the forward looking statements will actually occur • Letting fees set at 1 weeks’ gross rent and investors are cautioned not to place undue reliance on these statements. • Rates and utilities are best estimates based on Wollondilly Council current charges Projected Income Statement • Insurance provision includes building Detailed below is the Projected Income insurance and landlord protection insurance Statement for the first full year of performance. • Pest control pertains to the owner slab maintenance requirements • Returns based on 10,000 bricks issued Projected Income Statement (@ Full Subscription) Rental Revenue - Main Dwelling 31,850 92,564 Rental Revenue - Secondary Unit (SDA Robust) 60,714 92,564 Estimated Gross Rental 16,845 Less Cash Expenses 2,452 75,719 Property Management - Main Dwelling 6,678 Property Management - SDA Dwelling 1,780 75,719 Letting Fees (both dwellings) 2,980 10,000 Provision for Rates and Utilities Provision for Insurance Protection 950 7.57 Provision for Property Maintenance 500 Cleaning 400 7.77% pa Pest Control 180 Project Management administrative 925 Projected Net Income Projected Net Income for Distribution to Owners Number of Bricks Issued Projected Net Income per Brick Projected Net Cash Income Return


Combined Capital Growth and Cash depreciation schedule on completion of the Income Yields property so deductions can be claimed. As owners of the property, each investor will also The table below shows the projected financial get to share equally in the capital appreciation performance if the property were to rise in value and rise in value that the property enjoys over by the 10-year average for Tahmoor and rents time. continued increasing in line with inflation. These gains can be realised at any time by Investors can see that in the early years of the selling bricks or waiting until the decision is investment, the total return (cash and equity) is made to sell the whole property. projected to be in excess of 15% a year. On this basis, both the net income that is paid Taking a longer term view, the projected monthly and the capital appreciation need to be investment yield rises to 19.00% per annum and considered when assessing the likely overall the property would still have a number of years investment return. As noted elsewhere in this remaining with the Government Guaranteed rate document, median house prices in Tahmoor are of rental payments. rising at a rate 2.5x faster than the average for Sydney overall. Across the last ten years, the The strategic advantage of buying bricks can average capital growth rate for houses in also be seen. On these numbers, by 2026 an Tahmoor is 7.05% per annum. investor could sell 50% of their bricks and still earn over 22% return on the remaining money. Year Property Brick Gross Net Growth Total Value Price Income Yield Rate Yield Initial 2023 $933,500 $97.50 $98,125 8.25% 7.05% 15.30% 2024 $1,070,000 $107.00 $100,578 8.46% 7.05% 15.51% 2025 $1,145,000 $114.50 $103,093 8.68% 7.05% 15.73% 2026 $1,226,000 $122.60 $105,670 8.89% 7.05% 15.94% 2027 $1,312,000 $131.20 $108,312 9.34% 7.05% 16.39% 2032 $1,405,000 $140.50 $122,545 10.56% 7.05% 17.61% 2037 $1,975,000 $197.50 $116,529 11.95% 7.05% 19.00% $2,777,000 $277.70 Projected Tax Advantages Allocation of Monies Prospective investors should note that there are On full subscription, it is projected the monies will significant tax advantages (in the form of be allocated on the following basis: depreciation) available on all brand new properties constructed for income producing • Purchase of land $375,000 purposes. Due to the additional works and specifications required for NDIS registered • Closing costs $ 15,000 dwellings, the tax advantages are materially greater. As owners, each investor will have the • Construction Costs $546,675 opportunity to apply their share of depreciation benefits directly against their personal tax liability, • SDA enrolment $ 3,000 thus reducing the amount of tax they are required to pay. Each investor will be supplied with a full • Offer compliance & legal $ 26,325 • Capital raising costs $ 9,000 TOTAL $975,000


The National Disability Insurance Scheme (the Specialist Disability Accommodation (“SDA”) is a “NDIS”) is Australia’s largest social capital key feature of the NDIS and provides appropriate program and is easily the biggest health initiative housing to severely disabled Australians since the introduction of universal health care according to each individual’s special needs. It (Medicare) in the 1980’s. The NDIS currently is all paid for by the NDIS. supports more than 449,000 Australians; more than 250,000 of whom have never previously When it comes to SDA funding, the received financial support for their disability. Commonwealth Government’s mandate is clear: When you examine individual NDIS case studies every eligible person will receive funding for you quickly realise we live in one of the best and accommodation. There are no limits on the most generous countries on earth. number of people who can be approved. For some NDIS participants, the level of financial support they receive from Government tallies into The rent payments come from the Australian the hundreds of thousands of dollars each year. Government’s funds, and the payment rates for SDA dwellings is guaranteed by the Government Sadly, the prospect of recovery for many people for at least the next 20 years. at this level of disability is zero. This is a financial support that they will need every year for the rest Currently, some 15,240 Australians receive SDA of their lives. Unlike many Government funding funding in their NDIS support plan and it is initiatives where there is a future “return on estimated that there are another 33,200 disabled investment”, this level of NDIS funding outcome Australians who are eligible for the funding and is based purely on giving disabled Australians need accommodation. the best life quality possible. (see example in the support funding table below) The Property Council of Australia estimates that $5bn of new SDA housing is needed just to meet the current demand. The present SDA shortfall is estimated at more than 7,700 properties nationally, without any allowance for new cases. Disability Approved Housing can deliver 6X greater investment returns Because the accommodation provided under the NDIS needs to meet specific criteria, depending on the category of disability support required, SDA housing can deliver rent payments that are 3 - 6 times the normal market rents. The rental rates paid are governed by the type of housing and the NDIS assessed needs of the tenant and carers.


Because SDA properties can give such high As the table shows, the rent premium paid is investment returns and it is the Australian extremely significant. With Government Government funding the rent payments, the incentives guaranteed for 20 years, a new question we hear most from investors is “What if property can earn over $500,000 in extra rent. the Government changes policy and no longer supports the NDIS?” The Australian Government does this for one reason only - to create enough appropriate The NDIS has bipartisan support from all major housing to meet demand. parties and is mandated by law. The NDIS is a legislated commitment of all Commonwealth, The Government has made an enormous State and Territory Governments under the NDIS commitment. Already SDA rents are around Act (2013) and the NDIS SDA Rules (2016). On $188m a year, an amount that is expected to top of this, the NDIS is largely funded by our increase four-fold before the SDA program taxes. In 2014 the Medicare levy was increased reaches maturity. from 1.5% to 2.0% and placed in a fund to pay for NDIS expenditure. Prospective investors should also be aware that the Government is especially motivated to boost With SDA, the Australian Government has made housing supply so young Australians do not a 20-year commitment to investment incentives need to live in aged care facilities. Following the designed to attract the investors needed to meet Royal Commission into Disability, the Australian demand for disability housing. These incentives Government decreed that no Australian under the take the form of guaranteed rent payment levels age of 65 would be in aged care by 2023. that are 50%-100% more than standard, Despite efforts to date, the number of young applicable for the next 20 years. Australians in aged care facilities has not fallen substantially. Under the SDA Price Guide, one of the factors that determines how much rent the Government 4,500 will pay is whether the dwelling is categorised as a “New Build” or “Existing”. 4,000 3,538 3,596 3,700 3,755 3,711 3,612 3,483 3,500 3,341 The potential rent difference between the two is 3,000 simply massive. 2,500 3,084 2,000 2,781 To meet the “New Build” criteria a dwelling must 2,457 have been issued a certificate of occupancy after 2,179 1 April 2016, be for no more than 5 residents and comply with the SDA design/density standards. 1,841 On that basis the dwelling will be considered a “New Build” for a period of 20 years from the 1,500 date the certificate of occupancy is issued. 1,000 Compare the rent difference between identical properties in Tahmoor: 500 0 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Participants in residential aged care (under 65) A measure of the shortage of appropriate housing can be seen from the fact that some 75% of young Australians in aged care have SDA -funding approved and in place but are still unable to move because there is nowhere for them to live. This issue remains a significant driver of Government commitment to the NDIS overall and SDA housing in particular.


Project Delivery Team Rick has post-graduate qualifications in Applied Finance, an Honours degree in Law, and Masters The following table sets out the consulting degree in Law with a double major in Property, professionals that are part of the project’s Superannuation & Estate Planning combined delivery team. The team has been carefully with his undergraduate degree in Business. selected on their track record of similar projects. He is also an award-winning qualified builder and Project Manager Details Liveable House Designer who understands SDA and the NDIS. Rick designed and built Established in 2019, Equityville Pty Ltd provides Australia’s Best Energy Efficient Home (as expert advice in the areas of real estate projects, recognised by the Housing Industry Association) property due diligence, data modelling and and has also personally built a number of homes investment strategy. to the Liveable House Design criteria (Gold & The managing director of Equityville is Rick Platinum levels) Leighton. Rick has a professional background in property, finance and corporate compliance. The other significant value Rick brings to this He has elite level skills in number-crunching, project is his role as a Client Manager to NDIS data analysis, finance modelling and due providers, building strategic relationships and a diligence, particularly with regard to property pipeline of SDA funded tenants for the projects development projects, real estate sales and financing. The Investment Committee Each member of the Investment Committee is an acknowledged expert in their respective field and the combination of their skills and experience can provide assurance that the has been reviewed to the highest standards of governance and ethics. Craig Seymour is a corporate advisory consultant, specialising in strategy and commercialization. He qualified as a Chartered Accountant in 1997 Michael Birch is one of Australia’s leading equity finance professionals, having held senior executive roles at Macquarie Bank, Mason Stevens and was named Emerging Hedge Fund Manager of the Year in 2006. Melinda Cooper is a leading occupational therapist with more than 25 years’ experience in Australia, UK and the USA, including the NDIS.


Project Management Engagement behalf of the owners and recover these costs from the owners from the next available rental A Project Management Agreement will be income and include in this sum reasonable entered into with Equityville Pty Ltd at or prior to interest and holding costs. the registration of ownership interests on the Property Title. Because the project manager (or a related party of the project manager) is also an owner in this The project management will be ongoing with the investment project, these project works will be project manager having responsibilities for the undertaken at below commercial rates. Prior to continued performance of the investment. The completion of the project, the project Project Manager will be engaged to provide the management will be conducted without any fee following services: to the owners. Once the project is completed and rental income is being received, the full • To provide initial and ongoing day to day scope of works will be undertaken at the rate of management of the project through to 1% of gross annual rent (paid monthly) plus completion of construction and issue of reasonable out of pocket costs and certificate of occupancy reimbursements as noted above. • To confirm all necessary approvals and Covenant the Property Remains consents are obtained for the project Without Debt and Free of Mortgage including NDIS compliance It is a condition of entering this investment that all • To engage suitably qualified contractors investors understand and agree to comply with and consultants to construct the project in a the requirement that the property is to remain proper and workmanlike fashion free of any debt, mortgage or financial encumbrance at all times. • To allow variations to the project as required and subject to approval The reasoning for this is simple - the protection of all owners against being jointly liable for a debt • To provide monthly updates to owners on that is not of their undertaking or responsibility. the status of the project Mortgages in Australia are almost exclusively • To ensure that sufficient funds are in place issued on a full recourse basis and each owner to complete the project and fund any of the property is jointly and severally liable for ongoing obligations the full debt. • Manage the letting of the completed project In plain terms, if you and your spouse take out a including ongoing liaison with NDIS home loan for $500,000, you are both liable to registered providers and applicants with pay back the $500,000. If for some reason one SDA-funding in their support plans of you could not pay the loan, the bank is fully within their rights to pursue you for the full debt. • Arrange for the monthly incomes to be paid to each owner’s nominated bank account This type of situation will not be permitted in this including account of reconciliation for same. investment under any circumstances. A covenant will be registered preventing the Under the agreement, the project manager is property being used as security for any debt or entitled to be reimbursed from the owners for all mortgage. Each investor is required to costs properly paid on incurred by the project acknowledge the covenant and provide their manager in relation to providing the services agreement prior to be accepted as an owner in under this agreement. The project manager this project. may, at its election, for purposes of administrative simplicity or to support any short term funding needs of the owners pay costs on


Offer Details property that is recorded on the Property Title so your interest is legally recognised and protected. This is a Personal Offer to buy residential real Each person is free to do whatever they wish to estate at 160 Dalrymple Drive in Tahmoor New do with their ownership interest and as an South Wales. The offer is available to a additional safeguard, the property will always maximum of 15 investors. Places are allocated remain debt free so you can never be to successful applicants on a “first-in-best- responsible for someone else’s debt. dressed” basis. Why the Offer is structured this way Under the terms of the offer, 10,000 bricks or ownership interests are available in the property. Sydney property is expensive and becoming Each brick sells for $97.50. increasingly so. The average house price in Sydney is now more than $1,309,000. Many An associated company of Rick Leighton has people who want to invest in property can’t afford already acquired 1,000 bricks with the remaining to pay this much money and even if they can, 9,000 bricks available for public offer. they are concerned about the risk of taking on such an enormous amount of debt. Purpose of the Offer Buying a fractional ownership or part-interest in a The purpose of the offer is to raise investment property is the best way to overcome this funds sufficient to complete the successful massive problem. You can keep your investment completion of a brand new dual-income dwelling at a value that is manageable and comfortable for at 160 Dalrymple Drive Tahmoor. The property you. In this case, the minimum investment for includes 450m2 of land and a dual-income property in Sydney is $58,500. dwelling of 6 bedrooms, 3 living areas, garage and a host of inclusions designed to meet the In our professional view, buying a share of a needs of disabled tenants. quality property is a better strategy for anyone who is concerned about taking on excess debt Minimum Capital to be Raised with a bank or lender. By buying bricks in a property you get all the benefits you would from The minimum capital to be raised is 8,700 bricks owning a property outright but only need to at $97.50 per brick ($848,250) and the maximum invest a fraction of what is normally needed. is 9,000 bricks ($877,500). Applying for your Bricks What is a “Brick” or “Ownership Share”? Applications must be made for a minimum amount of $58,500 for 600 bricks and thereafter Under the Australian property ownership system in increments of $5,850(60 bricks). Prospective (the “Torrens Title” system) you can buy a investors are advised to note that the Offeror will property in your own name or together with other only accept the first applications equal to or people. If you have already purchased property exceeding the minimum issue capital amount. with a partner or spouse you would have been registered as the legal owners either as “Joint Treatment of Investment Monies Tenants” or “Tenants-in-Common”. Funds invested prior to the close of applications If you were in a family of four and bought a will be deposited in an interest-bearing account property together, then all four of you would be and held in trust until settlement. If this Offer listed on the Property Title as legal owners. does not proceed, investors will receive a full refund of their monies together with interest This opportunity is exactly the same except there (currently estimated to be 3.25% per annum) are slightly more people involved. Each brick payable upon full refund of the monies. represents a percentage of ownership in the


Opening and Closing Dates Offer Opening Date: 22 July 2021 Offer Closing Date: 06 August 2021 Please note: The above dates are indicative only and are subject to change without notice. The Offeror reserves the right to close the Offer at any time before the Closing Date and to extend the Offer without prior notice. Prospective investors are therefore encouraged to submit their applications as soon as possible after the Offer opens to avoid disappointment. How to apply for your Bricks Due to the limited number of available places on offer, applying for your Bricks is a two-step process. The first step is to complete an Expression of Interest which reserves your place in this Investment Offer. A 1% Reservation Fee is required to be submitted with the Expression of Interest (1% on the minimum investment of $58,500 is $585). The Reservation Fee is fully refundable should the investor decide not to proceed prior to application being accepted. The Expression of Interest form is contained within this Offer Document. The application form at the back of this document contains detailed instructions on how it is to be completed. Prospective investors are welcome to contact Rick Leighton anytime during office hours for additional assistance and information. An associated company of Rick Leighton has already acquired 1,000 bricks with the remaining 9,000 bricks available for public offer.


The basis of this investment offer is the The dwelling is an uncomplicated design, single opportunity to invest directly in a specific property storey and is the type of dwelling the nominated and be legally recognised as an owner of that builder has successfully completed on time and property. As such, investors should consider all on budget on numerous previous occasions. the usual investment risks that are associated with residential property investment in a major 3. COVID-19 Risk metropolitan market. The Covid pandemic continues to have a material The following principal risks have been identified impact on the overall business and investment with corresponding strategies put in place to climate although it appears that the increasing mitigate such risks and manage them within rates of vaccination may mitigate any ongoing commercially acceptable risk-to-return impact. In light of the unprecedented impact parameters. Covid-19 has had globally, the impact on this project is difficult to predict at this stage. It is important to note that this does not make the investment “risk free” in any way. Investments in That said, the strategy is to design a project that any form of real estate can be considered is simple and fast to complete so that the window speculative to some degree and subject to of potential disruption is as small as possible. variances in performance returns and dilution of capital. 4. Valuation Risk Investors should carefully consider whether this Valuations ascribed to the property are influenced investment is appropriate for them and should by a range of ongoing factors including changes appreciate that the value of real estate can fall as in market conditions, competing properties, well as rise. tenancy performance and changes to local demand. 1. Changes to economic and business conditions As noted elsewhere in this document, the property has been upgraded at a cost of Changing economic conditions may impact upon $216,000 in order to potentially gain an extra the project and the ability to meet scheduled $98,000 gross rent each year. The extra capital completion dates, cost containment and investment could well impact on the valuation profitability. Factors such as inflation, interest outcome of the property. rates, government policy, employment rates, consumer spending, social trends, overall 5. Tenancy Risks housing affordability and other various economic measures may come into play and materially The investment outcomes outlined in this affect the financial outcome of the project. document are contingent upon the property securing tenants on an ongoing basis. 2. Project Risk There is a risk that the property may sit below full As with any construction project, there is a risk occupancy for some periods. A vacancy rate that that the completion of the project will be impacted is greater than that allowed for in the forward or delayed by uncertain events including looking statements could have an impact on the unexpected weather conditions, government investment returns generated. measures in response to COVID-19, operational problems, delays in scheduling or supply issues. That said, the current vacancy rate is extremely low at 0.52% and property experts in the area That said, the dwelling does not need indicate there is extremely strong demand for Development Approval (“DA”) and will be quality rental properties. compliant with the NSW fast-track CDC system.


6. NDIS Risk 8. Government Policy Risk Prospective investment returns from the property Any changes to existing Government policy, are also contingent upon receiving rental income particularly in relation to the NDIS could have an from NDIS-funded persons under the Specialist adverse impact on project performance. That Disability Accommodation regime. Investors said, political commitment to the NDIS is bi- should note that this is a specialist market that is partisan and there are long term provisions that not as certain nor as established as a mainstream are set in place by Government. residential rental market and as such is subject to greater uncertainties. 9. Investment Return Risk Because SDA properties are to some extent Ownership in this property does not carry any specialised construction designed to guarantee in respect to return of capital, return on accommodate certain disabilities, it may take investment, payment of rental income or the longer to match appropriate tenants for the future value of the property. If you are unsure as property. A vacancy rate that is greater than that to whether you should invest in this property, you allowed for in the forward looking statements should seek advice from appropriately qualified could have an impact on the investment returns investment advisors. generated. 10. Competition Risk That said, the SA4 region incorporating Tahmoor has the highest proportion of SDA-approved While professional due diligence has been tenants seeking properties to move into and local conducted wherein present and upcoming care organisations indicate there is extremely competition has been identified (in addition to strong demand for quality rental properties. normal market competition) if the level of competitive supply were to materially increase in 7. Finance Risk an unforeseen fashion then project revenues could be adversely affected. In the ordinary course of events, finance and debt risk is one of the biggest investment risks 11. Other Risk associated with property investing. The risks outlined above are not exhaustive and It is important to note that this property will be the project may face other unforeseen risks from debt-free with an enforceable covenant in place to time to time. prevent persons from borrowing money and offering the property as security. That said, some investors may intend to borrow funds to invest in this opportunity. While the investment amounts are substantially smaller than is the course for buying a whole property, any borrowings do involve investment risk of some degree. If any borrowings are undertaken, investors should consider carefully whether their chosen level of debt is appropriate to their circumstances and able to be comfortably managed in a prudent fashion.


By far the most common question investors have The three major fractional property platforms about buying a fraction of a property is operating in Australia are: “How easy is it to sell my share of a property if The secondary market for fractional property I need or want to?” interests is rapidly growing all the time as more and more Australians recognise the benefits of Selling property as a tenant-in-common is a investing in property with smaller sums of money. simple process and getting easier all the time. Bricklet reported a 350% increase in sales volume during COVID (July 2020) compared with sales There are no restrictions on your ability to sell. It levels in 2019. Domacom’s fund position more is not like being in a strata property where you than tripled between November 2016 when they need the permission of the other strata owners listed on the ASX and BrickX sales more than before you can do anything. doubled in 3 years (2018-2020) following the launch of their platform to investors. From day one of your investment, you can sell One of the major advantages of investing in part or all of your investment anytime you want, to fractional ownership is the ability to reach new anyone you wish to sell to and you make this buyers and sell your investment in ways that decision completely independent of other simply aren’t possible or aren’t available when property owners. The choice is entirely yours. selling a whole property. Prospective investors should be excited at the You are recognised as a legal owner in the size of the potential market of buyers should they property. The ownership interest is an asset that choose to sell. Plainly, there is only a small you can treat any way that you choose. In fact, number of people who are able or willing to buy a being the legal owner of a Tenant-in-Common property for $1,000,000. The number of potential property interest is the most flexible way to own investors who are willing to invest $100,000 is property in Australia. It even has big advantages substantially larger, and the number of potential over buying as a Joint Tenant. investors who are able to invest $20,000 is exponentially larger again. The advantages are: However there are other recently introduced strategies and innovations that make the pool of • You can own an ownership interest in any prospective buyers even larger. proportion you want (whereas Joint Tenants must own 50%) • You can sell any part of your interest at any time (whereas Joint Tenants are “all or nothing” and have to sell their entire share • You can leave your investment in a will to your children or anyone else you want to benefit (whereas Joint Tenant interests automatically pass to the other Joint Tenant and aren’t part of your estate.) There are now a number of fractional interest property platforms trading in Australia that operate in a similar way to how the Australian Stock Exchange (ASX) operates for shares. Just like on the stock market, the platform or exchange brings together buyers and sellers to conduct financial transactions. The only difference is that they are buying and selling interests in property rather than companies.

HOW TO SELL YOUR BRICKS IN THE FUTURE Ready to buy property now & pay later? Own property now. Pay for it with no interest.

Bricklet’s reported 350% increase in sales volume has been facilitated by their introduction of innovative strategies that make buying and selling as simple as possible. One indication of the additional liquidity the Buy Now Pay Later innovation brings to fractional ownership market can be seen that almost $1,000,000 worth of bricks were pre-sold in a Melbourne property in 48 hours. One of their biggest innovations is the Launched on 7 July, Bricklet reported that by 9 introduction of a “Buy Now Pay Later” finance July 90% of the bricklets had been pre-sold at a arrangement for investors on their platform. We price of $104 a brick with the offer expecting to be have all seen the incredible impact AfterPay has oversubscribed by the 14 July settlement date. had on boosting retail sales in Australia, and now the same is being done with property on Bricklet. In conjunction with Buy Now Pay Later and interest-free financing, Bricklet advise that there It’s an exciting idea that could have enormous are no less than seven key investment benefits if you choose to sell. Let’s say that some advantages associated with the strategy: time in the future you would like to sell part of your ownership in this property and you decide to sell $40,000 of your bricks. Any investor that has $4,000 cash available could buy your bricks on Buy Now Pay Later and you would get all of your money cleared into your bank account within 24 hours. There’s no waiting for the purchaser to get finance approval, no 60-day contracts, no waiting for settlement … the money lands in your bank account within 24 hours. That never happens when you sell a whole property. For the new investor, they pay their 10% deposit ($4,000) and the balance over 18 months interest- free. But it gets even easier … as the new owner, they start receiving the monthly rental income immediately. So they’re paying no interest but getting the full benefit of all the income. Imagine trying to do that with conventional property! It simply isn’t possible. Now imagine how large the potential market of buyers is for your investment in future when they can buy now and pay later?


While not possessing the same innovative sale The property settled in December 2020 with each options that Bricklet has in place, the BrickX brick selling for $32.00. Today (July 2021) the platform provides data that can give better lowest available brick price is $39.00. insights into the strength and liquidity of secondary markets when it comes to selling If the original investors sold at this price, they fractional property interests. would make a 21.86% profit in just six months! When you visit the website, the BrickX platform In addition, they are receiving net investment feels more like a stock exchange in the way income of more than 5% a year, paid monthly. property data is presented - there is information on each individual property for valuation, brick The investment offer has been very popular … in prices, price movements, investment yield, the only a few months 626 investors purchased bricks number of investors owning bricks in the property in this property. In the last 30 days, 410 bricks and importantly, the number of brick sales in the have been sold. This is a lower number than for last 30 days. many properties on the BrickX platform although it is reasonable to assume where investors are One example is the property located at 68 Smile making 21.86% profit in half a year, very few of Crescent Wyndham Vale, a suburb situated some them would be interested in selling, preferring to 35 kilometres south-west of Melbourne. enjoy ongoing capital growth.


EXPRESSION OF INTEREST Investor 1: Client Details Surname: First name: Middle Name: Name of Company: Street address: Middle Name: Surname: Phone: Email: Mobile: Investor 2 Proposed Purchase Details First name: Name of Company: Street address: Phone: Email: Lot Allocation: Property: Lot 11, 36 Greenacre Drive, Tahmoor, NSW, 2573 Special Conditions (if any) Subject to Finance Approval HOUSE Price: $ LAND Price: $ Deposit: $1000 Name: Clients Solicitor Mobile: Company: Sydney Property Conveyancing Name: Pat Sciarrone Mobile: 0403 109 070 Address: Suite 701/161 Walker St, North Sydney NSW 2060 Phone: 02 8920 0200 Fax: Email: Clients Finance Broker Company: PK Invest Email: [email protected] Phone: 03 5222 7357 Fax: 03 8669 4336



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