Thanks for the heads up... The beckenham project have potential as far as I can see. True the 2 year delay and high interest rates are not an investors dream. I don't expect to invest with them unless they can resolve those two issues. I do plan to approach mgmt and find out if they have resolved these issues. Coincidentally I believe I may have just the solution to fix this problem for them. I gave Derek a call this morning but he was in a meeting. Will try him again tomorrow.
My "Armchair Development" Experience
- Thread starter Crido
- Start date
BTW, I am not related to anyone in this forum or with the Armchair group. I am more of a builder and do many multi-unit projects building for small developers. THis is my first foray into a property development forum to seek out any good investment opportunities that may be out there.
Not sure how it's possible for you OR them to "fix" these problems, short of:
- refunding all the extra money people have put in;
- convincing the banks to change their lending policies; and
- somehow turning back time and regaining the two lost years.....?
Or do you mean that despite all these past/current clusters, you'd got a good idea on how to make the next one work and you'd be willing to give them another chance?? While I think you'd be completely nuts to even consider them, I am curious about your solution. Perhaps does it involve your own building business becoming involved?
This company model is not one.
I suggest you do some more research, I bet you wont find one successful completed project. They missed the boat North West, again I believe investors lost money.
Hi guys,
*before you read my post please let me know if I am out of line for this post. I am certainly not looking to advertise my business. We are already turning away a couple of requests from developers for our services so finding work for our company is not on the agenda*
the reason for my being here is to seek out investment opportunities so that I may grow my hard earn money...with this said...
Yes I would not put my money into any projects unless I know I can have a direct impact on the project. The Beckenham project had good potential according to my own research. The area and demand are there for this project. I did a quick analysis with this project and could easily cut their construction time in half, lower their construction cost by 10-20% and achieve an 8+ star rating for an even higher market valuation. The reduced construction time would effectively cut the loan expense by half. This does not solve ALL of their problems but it would solve most of them.
Sadly I have just got off the phone with EOS and they are fully subscribed for the Beckenham Project. Tender stage is over and they have already contracted a building company.
*before you read my post please let me know if I am out of line for this post. I am certainly not looking to advertise my business. We are already turning away a couple of requests from developers for our services so finding work for our company is not on the agenda*
the reason for my being here is to seek out investment opportunities so that I may grow my hard earn money...with this said...
Yes I would not put my money into any projects unless I know I can have a direct impact on the project. The Beckenham project had good potential according to my own research. The area and demand are there for this project. I did a quick analysis with this project and could easily cut their construction time in half, lower their construction cost by 10-20% and achieve an 8+ star rating for an even higher market valuation. The reduced construction time would effectively cut the loan expense by half. This does not solve ALL of their problems but it would solve most of them.
Sadly I have just got off the phone with EOS and they are fully subscribed for the Beckenham Project. Tender stage is over and they have already contracted a building company.
Yet, I see your numbers they look great, but I just had one look at properties listed in Beckenham, all I see is high risk, lots of listings, new product, not a market I would play in at this stage of the cycle. Even if the numbers look great, when you have an oversupply the end product can continue to drop that's the problem.
Not sure how long EOS has been working on the Beckenham project?? but even if they buy when the market is rising they seem to have a pattern of missing the boat at the end.
Its unfortunate that the investors who jumped into these deals some 2-3 years ago would have made money in the Perth market pretty much just buying something 10 km from the city, no stress/no risk. I have learnt a lot from this thread, I think I just go solo with my deals, at least I have control, and if I stuff up got no one to blame but myself.
MTR
it really isn't that far out and is close to cannington which is a sizeable hub. For reference, it's only 15km to cbd, 10km to vic park and has easy access to Tonkin, Albany and roe highways
I wouldn't discount it as a place for multi developments, I looked at some sites there myself. the time to do it would have been 2 years ago though, with potential oversupply looming, prices starting to drop for some end product and an increase in prices for site acquisition and construction I thinj the margins would be too tight.
Hi all,
Sorry for not updating my thread since November - life got in the way!
Anyway, construction continues and is sort-of on schedule ... "essentially we are not behind schedule but rather have rearranged the order in which things get done" (EOS).
We have a "practical completion date" from the builder of 31st July 2015, but then we have been told to expect - no, not expect, but have been told "don't be surprised by" - further delays while the hurdles surrounding granting individual titles and organising body corporate gets sorted.
I REALLY hope we have a tenant in place before Christmas!
Our interest rate has been 12.95% (+ 1% admin fee), but rises to 17.95% for the final two months - why, I'm not sure, but I will ask the question!
The original figures on the investment (as can be seen on the EOS website) were:
"Project overview
Two Bedroom Apartment
Initial deposit $138,500
Construction costs $426,000
Total outlay to investor $426,000
Expected final market value $525,000
Expected capital gain $99,000
Expected Rent return unfurnished $570/week
Expected rent furnished $755/week.
One Bedroom Apartment
Initial deposit $114,000
Construction costs $236,000
Total outlay to investor $350,000
Expected final market value $430,000
Expected capital gain $80,000
Expected Rent return unfurnished $475/week"
(eosproperty.com.au)
As investors, we were told last week that if we invested in one of the one bedders we need to put in an extra ~$18K (so the above "Construction costs" that we need to borrow and invest on completion have increased to $253,560), or if we invested in a two bedder, an extra ~$22K is now needed on completion. The extra funds are because the project managers couldn't get the less expensive finance they had hoped for (and this was partly because they had so many projects already financed and uncompleted).
We're in for the long-run with this investment, and so we're hoping the position and the fact that it's a smaller development, will see it grow in the years ahead! It's certainly not as attractive now as it once was though!
Onwards and upwards ... we just need it finished so we can put a tenant in place!
Cheers,
Crido
Sorry for not updating my thread since November - life got in the way!
Anyway, construction continues and is sort-of on schedule ... "essentially we are not behind schedule but rather have rearranged the order in which things get done" (EOS).
We have a "practical completion date" from the builder of 31st July 2015, but then we have been told to expect - no, not expect, but have been told "don't be surprised by" - further delays while the hurdles surrounding granting individual titles and organising body corporate gets sorted.
I REALLY hope we have a tenant in place before Christmas!
Our interest rate has been 12.95% (+ 1% admin fee), but rises to 17.95% for the final two months - why, I'm not sure, but I will ask the question!
The original figures on the investment (as can be seen on the EOS website) were:
"Project overview
Two Bedroom Apartment
Initial deposit $138,500
Construction costs $426,000
Total outlay to investor $426,000
Expected final market value $525,000
Expected capital gain $99,000
Expected Rent return unfurnished $570/week
Expected rent furnished $755/week.
One Bedroom Apartment
Initial deposit $114,000
Construction costs $236,000
Total outlay to investor $350,000
Expected final market value $430,000
Expected capital gain $80,000
Expected Rent return unfurnished $475/week"
(eosproperty.com.au)
As investors, we were told last week that if we invested in one of the one bedders we need to put in an extra ~$18K (so the above "Construction costs" that we need to borrow and invest on completion have increased to $253,560), or if we invested in a two bedder, an extra ~$22K is now needed on completion. The extra funds are because the project managers couldn't get the less expensive finance they had hoped for (and this was partly because they had so many projects already financed and uncompleted).
We're in for the long-run with this investment, and so we're hoping the position and the fact that it's a smaller development, will see it grow in the years ahead! It's certainly not as attractive now as it once was though!
Onwards and upwards ... we just need it finished so we can put a tenant in place!
Cheers,
Crido
Hi Crido
OK, I must be missing something FIDO said investors had to cough up $100K each, is this another one of their projects, confused??
Sounds like you are holding these, I have mentioned a number of times that I would personally make sure that the end values quoted are about right, its been a long time between drinks, if not and they are lower then I would make sure I have the funds needed to settle. Just keep tabs on those values and rents, and possibly ways of increasing rent if it works, such as fully furnished??
All the best with the project, hopefully you can move forward.
MTR
OK, I must be missing something FIDO said investors had to cough up $100K each, is this another one of their projects, confused??
Sounds like you are holding these, I have mentioned a number of times that I would personally make sure that the end values quoted are about right, its been a long time between drinks, if not and they are lower then I would make sure I have the funds needed to settle. Just keep tabs on those values and rents, and possibly ways of increasing rent if it works, such as fully furnished??
All the best with the project, hopefully you can move forward.
MTR
Hi MTR,
If you see the figures above (from the EOS website), you'll see that each investor had to invest an initial deposit of $100K+.
Yes, I agree, however a valuation and rental appraisal is somewhat arbitrary at this stage, as we're in this till the end anyway.
We are hoping that both the value and rental return hasn't softened from the original figures quoted by EOS using the commercial valuations we received (from Hegney's, iirc) before we threw our hats in the ring (some 2.5+ years ago by the time we put a tenant in there!).
EOS has been saying all along that we shouldn't worry about the delays to the project, because we are still effectively enjoying any growth in the market, as we had a fixed purhase price from the start.
I believe this is somewhat eroded now though, as that fixed price as gone up by around 5% for each investor!
I wonder if the cost and associated dramas with the organisation of furniture (as I'm in another State) to make it a furnished unit, would be worth it in terms of an increase in rental returns?
Anyway, thanks for your tips!
Cheers,
Crido
Thanks very much for the offer sanj!
We get weekly updates and pics sent through every so often.
It's great to see the progress this way!
If they stop coming for any reason, I'll take you up on your offer, for sure!
Thanks again!
Crido
Hi Crido
OK, I must be missing something FIDO said investors had to cough up $100K each, is this another one of their projects, confused??
Sounds like you are holding these, I have mentioned a number of times that I would personally make sure that the end values quoted are about right, its been a long time between drinks, if not and they are lower then I would make sure I have the funds needed to settle. Just keep tabs on those values and rents, and possibly ways of increasing rent if it works, such as fully furnished??
All the best with the project, hopefully you can move forward.
MTR
I believe the site that Fido was talking about was another, I think Vincent or Loftus St. It wasn't the one that Crido is in.
Fido may also be scaremongering offering enough fact (like the interest rate) but not the full story that it's only for the last 2mths.
Not a problem, let me know if ever needed.
Re furniture - at the moment it isn't wise to furnish apartments imo as there is a surplus of them, especially in east perth and rents have really dropped for them.
In some cases furnished apartments with nice furniture (say 20-25k worth) are renting for the same price as unfurnished.
I've seen 2 particular apartment go from asking 1500 a week in December 2013, getting 1200 a week and now being renewed recently at 950 a Week. Th3 executive market is dead
Ok really, strang Fido has not posted again
