Residential Property Funds

[Slim]

Came across this website the other day which may be of interest.

www.mercatorfunds.com.au

They are starting a residential real estate fund and have a high income fund which I think is investing in mezzanine lending.

I have no involvement with this group except as a potenetial investor


Chris

 

[Aceyducey]

Slim,

Why invest in a fund when you can buy property yourself

With a fund you give up control over the specific investment decisions, do not own the property & are trusting others to manage your money in your best interests.

Sorry, I don't think most people on this forum would like this approach.

Cheers,

Aceyducey

 

[Slim]

Theres always got to be one

You can buy your own shares but there is quite a discussion going on about Steves share fund.

The high income area may be somewhere you could park money on a short term basis also for those who dont have enough for a deposit both these funds have regular saving plans

In addition both these funds have an incentive based mangement fee similar to Steves

Next time read the prospectus before you take it on yourself to answer for the whole forum.


Chris

 

[bundy1964]

Hi

If I have read it right you invest in the fund, then the fund lends the money to investors or home buyers.

No CG posiable with the chance of CL ( Capital Loss ), no benifits from gearing, no depreciation and not for me thanks.

I may have it all wrong since it is aftermidnight

bundy

 

[Aceyducey]

Originally posted by Slim
Theres always got to be one

Slim,

Who are you referring to?

If it is I, I read the prospectus for Mercator long before you posted & it is very clear that the fund is not a vehicle most property investors I know would choose.

If you are considering the fund as a short-term parking spot, you didn't mention this in your post. Looking at it in this sense & just now rereviewing the prospectus, well it still has few merits - there are many alternatives which would provide more reliable returns.

And as to pricing similar to Steve's fund (Navra) - well Mercator do charge an entry fee of 5% (and take this even if the financial planner charges you nothing) & charge monthly management fees of 1.4% regardless of how well the fund performs PLUS trailing commissions of 0.4% to fin planners and custodial fees of 0.2%.

On top of that it charges a performance fee of 20% if the fund does better than 9% - which is lower growth than I would expect from one of my self-selected residential properties.

Oh, and there's a withdrawal fee as well.

Steve's only charges for outperformance of the ASX200 and trailing commissions are absorbed into its own costs (see his prospectus from www.navrainvest.com.au).


No contest in my humble opinion.

So Slim, I don't understand why you would consider Mercator a good investment vehicle.

Perhaps you could explain it to us?


Cheers,

Aceyducey

 

[XBenX]

Maybe someone is saving a deposit for an IP

Maybe the ASX200 looks dodgy atm and the investor thinks the property market will outperform it for their timeframe

no need to shoot the guy down because he made a suggestion you didnt consider to be a good one.

 

[Aceyducey]

XBenX,

If it looks like I'm shooting Slim down, I'm sorry - that was not the intention.

My first response was purely on the basis of considering the fund versus an IP purchase. Slim did not indicate that his idea was, and I did not think of, using the fund as a forced savings plan.


My second post was in reference to him shooting me down
I wanted to get all the key financial info for the fund in the open so people can consider it equitably. The fund does not compare well with Steve's fund and it made me question whether Slim had actually read the Navra prospectus.

Anyone who wants to consider Mercator's fund is always free to do so, and I doubt that my posts have enough influence to have people not consider the fund on my comments.

There is always the possibility that there are elements of Mercator's fund that I have not understood or have missed, which is why I have invited Slim to respond with why he believes the fund would have merit.

BTW: right now I wouldn't advise people to use Steve's fund for the short-term while building an IP deposit either - fundamentally it's sound but the share market sucks right now if looking at a cross-section like Navra's fund does. In the mid-long term it's a different matter.

Cheers,

Aceyducey