Your opinion on this joint venture proposal please.

The attached is a proposal I have received regarding a joint venture. I would appreciate your comments and opinions.

Hi Neil,

It was great meeting with you and to talk about some possibilities.

I’ve completed several renovations to increase the valuations of the properties.
Some properties belong to my son’s and others belonged to clients.

I have the ability to know how to spend with the least amount of outlay which brings about the greatest amount of return.

There are in 2 ways in which I operate;

1. Borrow funds privately. The return is 2% per month either paid monthly after the first 3 months or to be negotiated. I pay all fees and charges. Some clients prefer this and don’t want to get involved. They just want a return on their investment.

2. The second is client participation and splitting the work load.

I charge 3% to find the right property after a strategy has been worked out.

I take out the loan and the client pays all settlement fees, monthly fees etc. Once the project is completed all costs are deducted and the profits shared on a 50/50 basis.

There are clearly set out rules on what is expected again depending on the client’s interest and ability.

The finders fee is not applicable on the 1st step. This is straight lending and interest is payable.

With the second step a feasibility will be supplied to outline costs and profits as much as possible. This obviously can’t be completely accurately but close to it.

The type of properties I look for would entail;

➢ Blocks of land over 900m2 with a minimum 20m frontage
➢ Double blocks at a good price
➢ LMR zoned land
➢ Land that can be subdivided in a minimum of 4 lots
➢ Removal homes
➢ Land that can be purchased with a long settlement.

I also use several types of contracts. Some I don’t settle on for perhaps 6 months but have access and use of in the meantime. This is just one example.

Let me know what it is you may like to venture into and I’ll be happy to help.
 
Hi Mam,

What is your objective?

I take it this is not a long term strategy? Do you intend to flick the property?

What if their is no Capital Gain? In this market, you have to expect that in the short term, and what provisions are there for a loss?

Sounds like this guy is on the ball!

ALL GAIN NO PAIN!

Regards JO
 
Thanks for your comments Jo,

I think my strategy is different from his. It was just a proposal that came to me via a mortgage broker. I tend to agree with you.

Neil
 
Hes offering 24% pa interest on an unsecured loan? And the odds of you getting your money back are?

Alternatively you pay 3% upfront plus all hold costs but only get half the profit? And the odds of a profit are?

I wouldnt do it.
 
I wouldn't go for it, there are better JV's out there, I think you need to have the same goal which it does not sound like the two of you have.
 
i personally would like to view the several contracts that he has said to have used and personal references from some of his so called previous clients, i think this is a first try one off con.
 
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