Joint Venture Discounted Purchase

[Peter Mac]

I am currently selling one of our projects in a coastal Sth East Suburb of Melbourne. This is a six unit project and will be completed in 12 months time. I am looking to put together a belated type of Joint Venture arrangement and am open to suggestions on the best way to do this.

My thoughts on the deal are as follows:

A purchaser would still get the usual stamp duty savings as normal but if they were to contribute $50K to a joint venture fund they could by way of return get a 5% discount off the purchase price of their Unit at settlement.

Eg
$400,000 Purchase price
$ 50,000 Joint Venture Contribution
$350,000 Balance

$ 20,000 Price Discount @ Settlement
$330,000 Balance payable to settle

The alternative available is simply $50K in for a 20% investment return with no purchase involved but I feel the discounted purchase is better for all involved.

Interested in your thoughts.
PS This is a real deal (except the figures are slightly different and there are some 'extras' like boat moorings available)
There are still three Units left if anyone is interested in a genuinely unique investment property. Each Unit is accessed via secure lift and all six have exclusive access to a rooftop entertainment and recreational area complete with Spa, BBQ area and 360 degree views. If interested you are welcome to Email me at [email protected]

 

[Mrs Bird]

Hi Peter,
I am very surprised that no one has asked you for more details on this JV

I assume the project is the one at Patterson Lakes from your previous thread


A few questions

How big are the apartments, number of beds, bathrooms
Body Corp fees for both the building and/or marina
Are all owners required to pay for the added security eg if it has security gates it might have security guards
Is there a good rental market for this type of investment or is it mostly owner/occupiers as it sounds like it is marketed towards the baby boomers and retirees.

It is in a beautiful location and wish you all the best .


Mrs Bird

 

[Peter Mac]

Hello Mrs Bird

Firstly I must apologise for taking so long to respond to you. I have been having trouble with my computer as usual.

Yes you are correct about the project from my previous thread. It is the one on North Shore Drive in Patterson Lakes. I am amazed that you drew a connection given the time lag between my posts.

The apartments are all two bedroom apartments of approximately 10 squares each with balconies and lift access to the rooftop recreation and entertainment area of approx. 20 squares. The room sizes are generous with built in robes and then the usual open plan kitchen living and meals, bathroom, laundry and separate toilet.

The property is not separately rated yet but when it is the total Body Corporate fees and rates for the building are not expected to exceed $3,500.

The security Gates have a coded entry but no guards and as far as I am aware there are no plans for the posting of a guard.

Our Building will have separate security in as much as the lift utilises a ‘smart card’ that is required like a key to activate the lift and will then take the occupants to their apartment level (or the rooftop). The lift will not work without the use of one of these cards.

The Rental market is generally good but we have aimed to strengthen our position with the inclusion of the only lift within the complex. This was done to make the project an attractive option to the baby boomers and retirees but equally any owner occupier or tenants. They would all lose excitement fairly quickly when the reality of climbing four flights of stairs with their shopping each week kicked in. There is a good mixture of Owner/ Occupiers within the complex. Our apartments have been aimed at an affordable entry level to the whole lifestyle amongst the million dollar properties within this whole complex.

I thank you for your comments and agree with your observations. It is in a beautiful location with a lifestyle that is unique. Perhaps you would like to buy one?