eastern suburbs - around clovelly
Opinion on Metropole
- Thread starter preacher_naric
- Start date
eastern suburbs - around clovelly
I had couple of very detailed meetings with Metropole's Buyer Agency Manager as well as one from Prop Development.
Went through very thorough analysis on the white board and what if sccenarios.
In the end, the bottom line for the development side was that I needed to come up with around 28% equity inc fees, deposit etc and I was supposed to get a 20% profit on the development (2 townhouse devlop) at the end in about 18-24 months time, if all went well.
I thought thats something I was able to achieve myself rather easily and didnt think it was a great return on investment (considering the length of time).
Similar was the case with using Buyers Agent from Metropole. The long and short of using a BA is the ability to leverage their expertise in knowing the market in detail and then using their negotiation skill set to attain a great price.
For someone who is not scared or acutely time poor to do the research and is reasonably capable to negotiate a price (though almost all prop in the BA's recommended area go to auction discounting negotiation leverage), I think BA does not offer any value.
I wanted to talk about my preferred investment area currently, Frankston - however told both by develop guy and the BA that it has a looong way to go and does not offer solid short - medium term opportunities..! I am happy that I did not act on that advice and chose to do my own research and happily reaping rewards now.
Havind said all that, I found Metropole people to be more knowledgable than other Buyers Agents that I met in Melbourne as well as generally nice and professional - no pressure tactics, no buy-my-service-now factor - and for someone who is either very new to prop investing or is a remote investor/ time poor investor, it might still be a worthwhile option.
Good luck
Harris
Went through very thorough analysis on the white board and what if sccenarios.
In the end, the bottom line for the development side was that I needed to come up with around 28% equity inc fees, deposit etc and I was supposed to get a 20% profit on the development (2 townhouse devlop) at the end in about 18-24 months time, if all went well.
I thought thats something I was able to achieve myself rather easily and didnt think it was a great return on investment (considering the length of time).
Similar was the case with using Buyers Agent from Metropole. The long and short of using a BA is the ability to leverage their expertise in knowing the market in detail and then using their negotiation skill set to attain a great price.
For someone who is not scared or acutely time poor to do the research and is reasonably capable to negotiate a price (though almost all prop in the BA's recommended area go to auction discounting negotiation leverage), I think BA does not offer any value.
I wanted to talk about my preferred investment area currently, Frankston - however told both by develop guy and the BA that it has a looong way to go and does not offer solid short - medium term opportunities..! I am happy that I did not act on that advice and chose to do my own research and happily reaping rewards now.
Havind said all that, I found Metropole people to be more knowledgable than other Buyers Agents that I met in Melbourne as well as generally nice and professional - no pressure tactics, no buy-my-service-now factor - and for someone who is either very new to prop investing or is a remote investor/ time poor investor, it might still be a worthwhile option.
Good luck
Harris
I lost 30k through a devolpment at Metropole in BoxHill in 1993
Not just me but 5 others also
It was a joint venture
I thought I was an experienced property invester and doing a devolpment was my next step
I dont want anything to do with that company again
I learnt a lot from that experience and am now semi retired
The lesson here is never believe the projections and the profits with devolpments there are always blowouts in costs and Metropole still recieved all there fees and still made money from this devolpment
Bill
Not just me but 5 others also
It was a joint venture
I thought I was an experienced property invester and doing a devolpment was my next step
I dont want anything to do with that company again
I learnt a lot from that experience and am now semi retired
The lesson here is never believe the projections and the profits with devolpments there are always blowouts in costs and Metropole still recieved all there fees and still made money from this devolpment
Bill
If you were 'actively' promoting your services on a site such as this one, then you would be silly not to respond to any valid criticism as to the services you provide ??
Especially when the result was less than positive.
If it was me, I would try and balance it out with some results of the number of successes vs the number of failures.
Sure there is risk in any venture, but if the stats showed that the service you promote tends to provide more failures than successes, I for one would want to know about it.
kp
Especially when the result was less than positive.
If it was me, I would try and balance it out with some results of the number of successes vs the number of failures.
Sure there is risk in any venture, but if the stats showed that the service you promote tends to provide more failures than successes, I for one would want to know about it.
kp
Thank you very much guys for all your responses. I'm from Sydney and as I understand it , Metropole build only in Melbourne. So I would fall in the column of remote investor, oh and also Time Poor investor and am considering giving them a call.
MY has been more than forthcoming when individuals' have had issues with Metropole in the past. This thread is one example http://www.somersoft.com/forums/showthread.php?t=7959&page=4&highlight=metropole
Hi BillC,
Did the development started or finished in 2003?. I'm just saying this because 2003 was the year when residential property market in Melbourne fall off the pick. So, if feasibility studies and development started before 2003 the outcome you got is understandable since no one could predict the future. I guess that we all have to understand that development as everyting else has its risks.
BTW, I'm just trying to be objective here.
Rgds,
James.
Hi James,
My understanding is that the development potential (final $ value) is calculated based on market conditions / prop prices at the time of buying the develop block, hence feasibility should return the proposed margins (in Metropole's case 20%). If the market then increases during develop phase, then it is purely considered as additional bonus, however if the market stays stagnant then the returns in theory should still be there.
Metropole's busines model is based upon perfecting the development side of things and hence the value proposition they offer is a system that when adhered to should result in decent margins.
Risks are attributed to anything investing, however if a business model is based and promoted upon getting a (conservative) return of 20% over the development timeframe, then something seriously wrong has to happen for someone to lose money on such a venture.
BillC might want to elaborate the cirumstances which lead to such a poor result for the benefit of everyone.
Thanks
Harris
My understanding is that the development potential (final $ value) is calculated based on market conditions / prop prices at the time of buying the develop block, hence feasibility should return the proposed margins (in Metropole's case 20%). If the market then increases during develop phase, then it is purely considered as additional bonus, however if the market stays stagnant then the returns in theory should still be there.
Metropole's busines model is based upon perfecting the development side of things and hence the value proposition they offer is a system that when adhered to should result in decent margins.
Risks are attributed to anything investing, however if a business model is based and promoted upon getting a (conservative) return of 20% over the development timeframe, then something seriously wrong has to happen for someone to lose money on such a venture.
BillC might want to elaborate the cirumstances which lead to such a poor result for the benefit of everyone.
Thanks
Harris
Hi Harry, I understand your point however, I'm not aware that Metropole is promoting a 20% return (I'm happy to be corrected).
Another thing I want to add is that one needs to understand what's Metropole's role in the development- They are just the PM (no more no less) and we're the developer. We take the profit if any but, we also take the risks (lost). It is our responsibility (no excuses), to do all due diligencies and command the boat. The part of the task "outsourced" to Metropole or any one else, is just the PM tasks (nothing else).
IMHO and to answer the question that opened this thread, I reckon that Metropole has a lot of experience managing these type of projects however, IMO again, they are charging much than they should for what they're doing. Specially, when I believe that MY is not at the front of these projects anymore since, he seems to be busy with his seminars and workshops all over the country and Internationally (happy to be proven wrong again).
Rgds,
James
A nice way to word this little arrangement to cover one's own a**e! Unfortunately for you, as the 'commander', you wouldn't have a legal leg to stand on if things went pear-shaped!
GSJ
The devolpment was for 6 townhouses to be built in Whitehorse Rd Boxhill in 2003
Metropole set up a joint venture and I bought into the JV
Metropole had already bought the land for 800k with plans and council approval and we would pay Metropole for managing the project
We got a business loan for the project which was approved and left it to Metropole to manage it
A few months later Metropole called a meeting and it was regarding getting
quotes for building the 6 townhouses
They said that all the quotes were way over the projected amount and the cheapest building quote would still make the devolpment not profitable
The JVs got together and it was decided to cut our losses and sell
We did sell at a substantial loss
I had a choice to walk away from the JV in the first place and thought the land price Metropole paid was to high as we were nearing the end of a property boom
I was nieve and so were 5 other parties
I felt sorry for one young couple who bought into the project as it would have hurt them financialy more than the rest
Bill
Metropole set up a joint venture and I bought into the JV
Metropole had already bought the land for 800k with plans and council approval and we would pay Metropole for managing the project
We got a business loan for the project which was approved and left it to Metropole to manage it
A few months later Metropole called a meeting and it was regarding getting
quotes for building the 6 townhouses
They said that all the quotes were way over the projected amount and the cheapest building quote would still make the devolpment not profitable
The JVs got together and it was decided to cut our losses and sell
We did sell at a substantial loss
I had a choice to walk away from the JV in the first place and thought the land price Metropole paid was to high as we were nearing the end of a property boom
I was nieve and so were 5 other parties
I felt sorry for one young couple who bought into the project as it would have hurt them financialy more than the rest
Bill
Hi BillC, thank you for the detail explanation. This would change my perception and what I wrote doesn't applies to it any more.
rgds,
James.
We used Metropole as project manager for a 3 TH development on our site. I was to start a thread on it ... over a year ago ... but just haven't got around to it 
. Here are some points, I've put the bottom line at no.1.
1. Metropole are good guys - this point cannot be overstated.
2. Michael Yardney - is supremely experienced and helpful, a good guy.
3. Michael Yardney is a salesman to the core - a bit strong for some, but not under-handed.
4. You'd almost certainly not be dealing with Michael - he may communicate at times. he will always answer your emails - nice.
5. Metropole staff are generally on the ball and very approachable.
6. Their fee is certainly not cheap - but it's not hidden at all, so you decide with eyes open.
7. They only show feasabilities - don't work to a "budget", possibly wise risk management on their part.
8. The concept that they handle everything for you to be an armchair developer potentially numbs the client to the risk.
9. Understand that their contract ensures that the client will carry ALL the risk - this is probably how things should be - just be aware.
10. I thought that they would've had contigency plans for problems or unexpected delays by their sub-contracted professionals - once again their contract removes them from this responsibility.
11. Many of the people they sub to are virtually on Metropole payroll - guess this happens when you use someone who does a good job or charges a low price over time - it does however blur the independence and validity of the tender system or searches for best professional for your job. Some have said you are effectively dealing with a single building Co so the cost should be much lower. If Metropole were a total package building Co then they couldn't shift anywhere near as much responsibility and risk to you - an experienced and wise move by Michael.
12. Our project had its ups and downs, I assume all do - yes I had frustrations with Metropole at times, but the end result was good.
13. Assessing the result is dependent upon some market forces - well out of control of you or Metropole, especially when the end is more than a handful of months down the road - think years not months.
Hope this helps
. Here are some points, I've put the bottom line at no.1.1. Metropole are good guys - this point cannot be overstated.
2. Michael Yardney - is supremely experienced and helpful, a good guy.
3. Michael Yardney is a salesman to the core - a bit strong for some, but not under-handed.
4. You'd almost certainly not be dealing with Michael - he may communicate at times. he will always answer your emails - nice.
5. Metropole staff are generally on the ball and very approachable.
6. Their fee is certainly not cheap - but it's not hidden at all, so you decide with eyes open.
7. They only show feasabilities - don't work to a "budget", possibly wise risk management on their part.
8. The concept that they handle everything for you to be an armchair developer potentially numbs the client to the risk.
9. Understand that their contract ensures that the client will carry ALL the risk - this is probably how things should be - just be aware.
10. I thought that they would've had contigency plans for problems or unexpected delays by their sub-contracted professionals - once again their contract removes them from this responsibility.
11. Many of the people they sub to are virtually on Metropole payroll - guess this happens when you use someone who does a good job or charges a low price over time - it does however blur the independence and validity of the tender system or searches for best professional for your job. Some have said you are effectively dealing with a single building Co so the cost should be much lower. If Metropole were a total package building Co then they couldn't shift anywhere near as much responsibility and risk to you - an experienced and wise move by Michael.
12. Our project had its ups and downs, I assume all do - yes I had frustrations with Metropole at times, but the end result was good.
13. Assessing the result is dependent upon some market forces - well out of control of you or Metropole, especially when the end is more than a handful of months down the road - think years not months.
Hope this helps
