My "Armchair Development" Experience

Discussion in 'Property Investment - Other' started by Crido, 26th Jan, 2013.

  1. Crido

    Crido Member

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    Hi all,

    I've been reading these forums for the last 6 months and they have (YOU have!) played a big part in my property investing education - it really is an excellent resource ... and, although I'm familiar with online forums, and do post in various others, this will be my first post here!

    My wife and I are about to embark on our first property investment in EOS Property's latest "Armchair Development" at 33 Windsor St, Perth, 6000 (link below).

    http://eosproperty.com.au/properties/latest-release-33-windsor-st-north-perth-2

    We're very excited about the venture and are impressed with results of our due diligence on the investment so far. We've researched the area and the demands and trends, and run the numbers through various scenarios (best to worst case) and because of the 20% "buffer" in the deal they seem to stack-up!

    We're also impressed with the individuals and companies behind the deal:

    - Marketing and Investor Coordinator: EOS Property Group
    http://eosproperty.com.au/
    - Development Manager: Bird Property Group
    http://birdpropertygroup.com.au/

    We plan for this investment to "kick-start" our journey into property investment and have goals to grow a portfolio over the next 12-15 years with this property as the secure base and foundation for this!

    I'm hoping that some of you on the forum might like to read about how this "Armchair" development (and our investment) unfolds over the coming 18 months, and I plan to use this forum to keep those who are interested informed!

    Would be interested to hear your thoughts!

    Like I said ... we're excited!

    THINK BIG!

    Cheers,
    Crido
     
  2. sanj

    sanj Member

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    Thanks Crido, looking forward to the regular updates. FYI Boods who posts on here is part of Bird Property Group
     
  3. Crido

    Crido Member

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    Thanks sanj! Yes, I have sent a msg to Boods and am waiting to hear back. :)
     
  4. sanj

    sanj Member

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    ive got a smaller development going up around 100m away from this one so im certainly hoping those expected sale prices eventuate, will be great for the area.
     
  5. westminster

    westminster P Plate Developer

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    Crido
    Very exciting. I think the development looks great and I'll be following with interest too as mine is close by too but on a smaller scale.
     
  6. redwing

    redwing Progress Not Perfection

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    I think Derek (TIC) is also part of EOS?

    I had a look at the website but about us doesn't say much

    A number of groups started looking at WA again a year or so ago...I'm happy :D
     
  7. Crido

    Crido Member

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    Thanks Westminster and Redwing!

    Latest ... Joint Venture and Development Management Agreements are with a Perth Solicitor I have employed to make sure everything is appropriate for this type of investment, before I sign-off and deposit the initial funds.

    He as assured me (verbally) that the docs are good (with nothing that seems out of the ordinary) and so doesn't suggest we change anything with the Agreements - great!

    I was a bit concerned with the "Memorandum" he originally provided me, as it was simply a few sentences in a word doc (stating what he had told me verbally). I asked (politely) if he wouldn't mind redoing this and including a letterhead with his business name and contact details and his name and signature. He obliged, but ... I have now asked him to edit out the (many) grammatical errors. I am waiting to hear.

    I must admit, I'm a bit of a grammar freak and I like documents worded correctly, particularly when I'm paying big bucks for the advice/document.

    What do you reckon? Fair enough ... or should I just lower my standards?

    Cheers,
    Crido
     
  8. westminster

    westminster P Plate Developer

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    Crido - I make my poor Builder's pre start assistant fix all grammar and spelling in the Addenda she makes. Then she kept on sending me emails referring to Addenda's so I taught her Addenda vs Addendum and that ' are not for plurals :)

    Good to hear everything is going well. Do you need to wait for xxx more investors to go forward or will they start at a certain time.
     
  9. Crido

    Crido Member

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    Addenda vs Addendum ... Awesome! LOL

    The Joint Venture is now "fully subscribed" and we're good to go. Just finalising the signing of contracts and the transfer of the initial funds required!

    I keep reading great things about the growth of the Perth property market also, so we're obviously aiming high and thinking big and very excited about the potential outcome of our investment!

    Cheers,
    Crido
     
  10. Aaron Sice

    Aaron Sice Seldom Seen Kid

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    well done, Crido.

    I've been following this development since it was first put up to the DAC and it's great to finally have contact with the people involved.

    i'm following this with interest for reasons that will become apparent after a bit more forum reading.
     
  11. Crido

    Crido Member

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    Thanks Aaron! :D
     
  12. AndyM

    AndyM Newbie, be kind.

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    Subscibed. Very interested to see how this goes, looking at these guys in the future. Does anyone know about any of the people in charge?
     
  13. MTR

    MTR Bling Bling

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    I am also keen to see how these developments progress. Good work if investors can make 20% profit:)

    I think the Windsor units are only 58 sqm, 2x2, this is rather small (usually 1 bedders)?? I would want around 72 sqm, does this make the valuations a little on the high side, I really am not sure?? anyone know

    Looking forward to feedback on this.

    Cheers, MTR
     
  14. sanj

    sanj Member

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    It's a funny one, when danny psaros did 2 bedders in the mid 60s for his NB developments on stirling st in 2011 i thought there is no way they would be accepted by the market but they were.

    apartments are going smaller and smaller but so far market seems to be accepting it. having said that 58sqm 2x2 is pretty small imo although the design of the apartments is quite clever in maximising space. i guess maybe with the market being as hot as it is 58sqm 2x2 can be acceptable
     
  15. MTR

    MTR Bling Bling

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    Its just me then, I have a particular mind set, 1 bedders a minimum of 50 sqm and 2 bedders minimum of 70 sqm.
    I have not really looked closely at what has been happening as far as units/apartments go, interesting they are getting smaller.

    MTR
     
  16. westminster

    westminster P Plate Developer

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    Design definitely plays a part in it. I know my 2 x 2 is a bit bigger (I think its 65sqm) but in useable space is better than many apartments built over 70sqm as it it doesn't have a U shaped kitchen taking up lots of space and doesn't have much corridors. Inline kitchens save heaps of space and my living/dining is 5.5 x 4.7 which is quite big for a 'small' apartment.
     
    Last edited: 7th Feb, 2013
  17. MTR

    MTR Bling Bling

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    I see what you mean, design is very important. Smaller the space, will need to be more creative, gun designer working for you.

    Another point which I did not realise as never looked at OTP stuff, MB advised that there is different methodology with regards to valuations and that in Melb he has yet to see a value come in at the initial valuation quoted by the developer and this I believe was even prior to the Melb market falling back. :eek:

    Apparently banks will not look at new unit/apart comparable sales but at older units same sqm to determine value, this a real concern coz the older units end value would be lower making it higher risk proposition.

    Anyone had any experience with OTP stuff, of course if the market is rising/booming on completion why would there be a problem??

    Ausprop
    You have been involved in OTP, what's been your experience regarding this??

    MTR
     
  18. AndyM

    AndyM Newbie, be kind.

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    Crido,

    Would you mind explaining how the funding situation works in EOS?

    Having spoken with them my understanding is:
    You provide a deposit as part of the JV
    The JV (iaw EOS) obtains a loan through their broker for the land (and construction in some cases)
    A 100% construction loan is taken out by the JV once settled on the land (if step 2 didnt include)
    Each party in the JV then takes out a residential loan to purchase the property at cost price from EOS.

    Does this sound correct? And did you have to pay the deposit via cash and LOC or could you take out a separate loan using the land as security?

    Cheers
    AM
     
  19. Aaron Sice

    Aaron Sice Seldom Seen Kid

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    i have done a useable 1 bedder at 37sqm titled, plus balcony, carbay and store.

    it just depends on your thought process and your understanding of space and how it's used.

    for example, a 3x3 bedroom isn't a shoebox if it has 3m ceilings (or raking ceilings) - likewise a 5.5 x 3.5 living space feels like a good size if it has raking ceilings, with clerestory windows to view the sky above.

    i think when people buy OTP, it's very easy to forget that VOLUME makes a comfortable space, not just floor area.

    imagine it - a 1 bed unit with 40m² of space but 140m³ of volume (3.5m average ceiling height) , versus a "bigger" 50sqm 1bed with only 120m³ of volume (2.4m ceiling height).

    i know which one i would buy.
     
  20. Crido

    Crido Member

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    Hmmm ... I hadn't thought of the volume factor, so I'm unaware of the ceiling height they are planning for 33 Windsor St. I'll get back to you with this.

    Also, I've invested in one of the (two) one bedders in the block @ 40.1sqm of thoughtfully designed space, including a space-saving "galley" kitchen (+50sqm courtyard + storage room + car space) with the bedroom at a cosy (but functional) 3.11m x 2.8m. I'm very happy with the large courtyard too!

    Your thoughts, Aaron?

    Cheers,
    Crido