Would you invest in this commercial property?

N

Nobleone

Hi All,

Any thoughts?

"As an existing and valued client of Positive Real Estate, I am delighted to present to you a rare opportunity in an exclusive investment product that has not yet been released to the general public of Australia.

• Commercial Property
• Available lots from $20,000
• Positively cash flowed from day one

We have been working very hard to find ways of locating property investments throughout Australia which are positively geared and through our latest relationship we have secured the opportunity to invest in strata titled self storage units.

The investment is managed by the industry experts, Storage King Management and offers an unbeatable return of 8% net pa guaranteed for 3 years. Yes, this investment has a positive cash flow with the opportunity for capital growth in Sydney!"

Cheers, Nobleone
:)
 
My short answer would have to be no, 'coz I binned it. :)

More seriously, my answer was no as I have too much on my hands already to do the necessary research and due diligence for an investment way outside my area of expertise. I do have one comment, however. Let us assume that as a commerical investment you can get a 70% loan at 8.5%
P&I. Even for a 30 year loan I make that out to be less revenue than expense.

Now assume that you and finance the rest through a 7% I/O LOC. And then pay stamp duty. And managers, and all the rest - rates, body corp, sinking fund etc.

I can't actually see where "cashflow positive" comes from...
 
They said 8% net not gross so it has to be cashflow positive if its an accurate net figure. The big question is what happens after 3 years?

MJK :)
 
I can get you positive cashflow in Sydney residential property. Even the inner suburbs. It's simple, just don't borrow any money :p
 
What exactly does the $20k get you besides 8% pa?. A lockup shed, land ???

What can you depreciate ?

Would it be better buying a serviced appartment where at least you get depreciation and a chance of capital growth ?
 
and offers an unbeatable return of 8% net pa guaranteed for 3 years
Click to expand...
Heads up. Whenever I hear of "guaranteed returns" it reminds me of the two-tiered marketeers who sell something at a premium rate, with the offer of a "guaranteed return". In many cases, this can be done because you (the purchaser) has paid above the money to allow the guarantee.

Note, I'm NOT saying this is a bad deal. Just do your due diligence.


Regards,

Caveat Emptor Moderator
 
RE
<snip>
Any thoughts?

"As an existing and valued client of Positive Real Estate, I am delighted to present to you a rare opportunity in an exclusive investment product that has not yet been released to the general public of Australia.

<snip>

It appears to be advertized on www.realestate.com.au - see the attachment - so their credability would appear to be ....

( I converted the www page to a the attached pdf file )
 

Attachments

  • SydneyCashFlowPositive.pdf
    41.7 KB · Views: 217
Yeah storage units are the next BIG THING to fleece greedy property investors.

Of course a certain % will make money....and then everyone will follow.

Best bet is to be the seller/leaser of storage units and let the investors take the ongoing risk :)

Cheers,

Aceyducey
 
One hazard you may not have thought of...

Just for those interested, heard a not funny story a year or two back. Some joker came in paid the first three months rent on a storage and was never heard from again. When they finally opened the storage to seek what was in it, with the intention of reletting, it was chockablock with asbestos, obviously taken from a demolition.
 
quiggles said:
Just for those interested, heard a not funny story a year or two back. Some joker came in paid the first three months rent on a storage and was never heard from again. When they finally opened the storage to seek what was in it, with the intention of reletting, it was chockablock with asbestos, obviously taken from a demolition.
Click to expand...
That's right- it was a story in the forum, from Jakk the slum lord (we haven't heard from him for a while)- http://www.somersoft.com/forums/showthread.php?t=3149
 
I'm impressed

geoffw said:
That's right- it was a story in the forum, from Jakk the slum lord (we haven't heard from him for a while)- http://www.somersoft.com/forums/showthread.php?t=3149
Click to expand...


I posted that over 3 years ago and it appears that at least 3 people on here have remembered reading it.

Whats even more impressive is that when my sister was down here from the Gold Coast over the new year break, she warned me to be aware of situations like this because one of her workmates had relayed this same story to her that supposedly happened to a mate of a mate.

My reply to her...."Don't worry sis, I'm too smart to fall for something like that"

What she don't know, wont hurt her.

regards
 
I'm getting very serious about a set of storage units but with a couple of big differences. See what you think.

Asking price $670k
Seller (a builder who did the reno) will rent back external space for $24k for a year's use. Obviously I would prefer to give him free use for a discount on purch price tho.
It's on 3036sqm of prime land in the dinky suburb and close to 100s of new units. Must be 100% land content!
Plenty of room for further development.
Close to the marina so the vacant land could be used as boat storage (How much does it cost to store a boat?)
Netting 9% return as is.
It has a nice little office from which I could run my existing biz.

I am willing to sell my IP (possibly $250K equity) to fund the 30% so I would have genuine income from it. It may be a good retirement vehicle for me and I do want to retire shortly.

Thommo
 
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