How would you seek expressions of interest

[Peter Mac]

Hello to all,

We are seeking expressions of interest in an offer to participate with us in a unique development in an exclusive, security gated community on the Mariner in Patterson Lakes, Victoria. We are building a five storey structure that will include six luxury apartments with a lift servicing all floors including a rooftop entertainment/ recreational area and 360 degree unobscurred views. These views take in the City skyline, Port Phillip Bay, the Patterson River and Mariner, Mornington Peninsula and the Dandenong Mountains. This complex also comes with two Boat Moorings.

We are very flexible as to the terms and method of structuring this transaction with investors for mutual advantage. Options we would look at include:-
1/ being a true Joint Venture Partner and having the option of taking ownership of an apartment at completion (we are however looking to keep all of them ideally so any JV Partner ownership would be strictly limited);
2/ a straight-forward funds injection for a guaranteed percentage return
#2 is probably our preferred option.

This project will require investment for approx 12 months duration from commencement to completion. We anticipate commencement will be around May 2003.
Approx. funds required:- $450K to $500K guaranteed and secured against the property.

I am interested to hear the forum's thoughts on whether I should be looking to put together a syndicate type pooling of funds for this type of figure or should we look for one or two larger passive investors? I am open to any ideas.

PS This is a genuine and totally unique deal that we currently are getting organised to make available. This forum is my first test of how I might present this deal to ascertain expressions of interest. (and if there is any genuine interest please ring me anytime.)

Contact Peter on Mob:- 0418 526 646 anytime or email me - [email protected]

Looking forward to your thoughts.

Peter Mac

Inside every older person is a younger person wondering what happened.

 

[Mike]

Hi Peter,

I'd like to ask some questions:

1. When you refer to "We" who are you referring to?

2. What is your role in the development?

3. Are you also investing in this project?

4. What is the experience of the development team?

5. I assume these luxury apartments are designed for owner-occupiers rather than buy to hold investors. How easy will it be to onsell the apartments either off the plan or on completion?

6. Have you tried sourcing cheaper bank finance?

7. What sort of interest return are you offering on private investor finance?

Regards, Mike

 

[Peter Mac]

Gidday Mike

Re:- Your Queries. I will attempt to answer them as raised.
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1. When you refer to "We" who are you referring to?
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I refer to 'We' because I have two equal partners working with me on this project (along with other projects).
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2. What is your role in the development?
AND
3. Are you also investing in this project?
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We are the owners and builders/developers of this project and our approach is currently from an ‘owner-builder’ perspective as we ultimately want to keep them ourselves.
We are, therefore, currently investing in the project extensively with all the preliminary costs, building issues, consultants, legals etc.
My current interest is to establish the best approach for the benefit of the project. I am aware of plenty of money looking for good deals to invest in. The shortage is actually the ‘Good deals’, so I am feeling the water with this one but my aim is to arrange a ‘Good Deal’ for all involved.
Are you familiar with the Patterson Lakes Mariner? Exciting just to have a look if you get the chance. The dry dock boat shed within this complex is the largest in the southern hemisphere. The entire Mariner and surrounds is about to be upgraded.
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4. What is the experience of the development team?
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Our ‘team’ consists of three. Collectively we have all worked in the building industry for over 50 years on projects ranging from residential construction and renovations through to commercial. One of my partners has worked worldwide on major Civil and Marine projects as well as his own construction work and in recent years worked for a major construction company and was authorised to personally tender for projects to the value of US$500,000,000 worldwide. If the project value exceeded this he was required to seek further authorisation.
He is now looking to a more relaxing lifestyle and hence we are putting these smaller exclusive and enjoyable projects together.
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5. I assume these luxury apartments are designed for owner-occupiers rather than buy to hold investors. How easy will it be to onsell the apartments off the plan or on completion?
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Truly unique projects like this are in the lower percentage of options available to the market so if sales were to be sought I would expect significant interest and ease in achieving premium prices. Since we bought the site I actually have been approached on multiple occasions by various marketing arms wanting us to let them sell the project at premium prices and I had to reject 4 X apartment pre-sales because I wasn’t ready to sign contracts, so I believe there is a strong market there if we chose to go down that avenue.
Our neighbouring Townhouses within this complex have been selling in excess of $1,000,000 so we would be offering a very limited and achievable entry level for those who wanted the ‘Lifestyle’ and unique features (including a lift) that our project offers, in a totally unique environment with an ‘affordable’ price tag in comparison to these.
Sales are not, however, currently in line with our ultimate ownership plans. At or near completion any sales that may be sought could be made when the ‘showpiece’ would be tangible therefore achieving a better return than ‘off-the-plan’. Potential purchasers would be able to arrive in their boat, park in their potential Mariner Mooring, take a short ride in the lift to the door of their prospective apartment and walk through enjoying the views and it’s ‘feel’. A quick lift ride to the rooftop and they could take a hard earned rest in a deck chair beside the Spa while taking in the sunshine and making their purchase decision.
My experience to date indicates that these would sell ‘word-of mouth’ tomorrow if I would put them to the market. When complete they will be an even easier sell.
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6. Have you tried sourcing cheaper bank finance?
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I didn’t present the finance aspect very clearly. We will establish a construction loan for this project using bank finance as well. I am currently anticipating the LVR will be 75% from the Banks. We will have up to $200K invested by this stage and therefore I am looking for the rest (15% - 20%) of hard costs being about $300 - 400K. The Hard costs for this project are around $2million to build. So the funds I described are actually the ‘second mortgage’ or ‘mezzanine’ type funds required.
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7. What sort of interest return are you offering on private investor finance?
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I have not at this point decided on the interest return we would offer. It could be along the lines of 1% per month with a ‘balloon’ type bonus of 3 months interest at completion, or perhaps just an agreed percentage.

Again I am interested in the thoughts of the forum on what might be of interest to you if you were looking to invest in a deal like this.

Peter Mac

 

[XBenX]

is mariner meant to be marina ?

not being picky - just making sure ive got the right idea of what you are describing

 

[Peter Mac]

Mariner vs Marina?

Yes, I often make this mistake. It is a Marina, not a sailor.
Thank you

Peter Mac