Originally posted by Mrs Bird
Thank you so much AL for all the information you have posted so far about Metropole Properties.
There are a few general questions I would like to ask you, Michael, or anybody else on the forum who can help.
1. Did you find your own property to develop with their recommendations or did they source the property first with you having to buy it of them. Otherwords are you able to negiotate the best deal yourself or was the price fixed?
At the heart of metropole is not a development company that builds and sells properties to you the investor, Metropole is a services company ie. for me they are a project management company, ie I pay them to manage a property development. In my case metropole located an existing property with development permits, however it was up to me to buy it or not, it was not owned by Metropole. If you have a property you think could be developed again they will manage the development for you. Again Metropole does not profit from anything except the fees they charge you. If I had found any evidence that they take kick-backs etc, ie. if they made money from my development in any other way except for the money they charged me I would have never have proceeded with Metropole.
2. What type of loan/finance was required for you to take out in order to complete the development side. We are seeing our bank on Tuesday about this but I am interested in how other people go about it. For example is a development loan different to a housing loan?
In my case development was fully funded from my LOC (against other IPs) plus selling shares, there is no finance on the development. However development finance is the normal course of action. I know metropole has contacts at a few banks eg. NAB that specialize in this process would make life easy.
3. You mentioned in your posts that there was delays in the building process. Did you factor this into your costs?
No, I am just "sucking it up" It not huge money, but every $1K extra comes straight out of the profit margin.
4. Are you planning to Hold all 3 Townhouses?
Actually in my case it is more complicated. My friend will own one and he was always part of the development process, I will sell one (Mr AL orders), and I hope keep one. Naturally I didnt do this to make a loss, however the real reason is to understand the process and see for a smallish project if I would trust them with a larger projects. For me this project was planned to be the begining of many!
Sorry for all the questions but I find this thread so valuable and have graded it accordingly.
Thanks Mrs Bird