Good morning guys.
I thought I’d give you a quick update about my current 25-lot project.
You probably know that about six weeks ago, I extended an invitation to my database for people who wanted to join a slam dunk project.
We had a couple of webinars where I explained the opportunity, and also did a lot of teaching about how you can find similar deals on your own. How to assess them. Etc.
First of all, I want to say thanks to all those who came on to webinars. You asked a lot of good questions there, which created a lot of value for everyone.
The Results (AKA “How to raise $1.6 million dollars without calling the bank!”)
Initially, I put it out there that I was looking for “call it $2 million bucks”. In reality, I only needed $1.6 million.
And in effect, that’s what we’ve been fully subscribed to.
I’m more than happy with that.
Thanks for those who came on board!
So a bit of a rundown because I know some of you are out there funding your own projects, looking for investors for yourselves as well.
I you want to get your head around how this works and how I do it, keep reading!
Here are my results for this project:
- We ended up getting 6-7 investors
- I was looking for a minimum $200k each as the benchmark
- One investor put in $400k (she was one of the earlier ones that came on)
- One of our final investors was $500k
I’m really excited to have those investors on board and I’ll keep you updated about how the project progresses.
Where should you be looking for projects?
If you missed the webinars and aren’t aware of the situation, it’s a project in Deception Bay, just over 20,000 square meters.
At the time, when I was doing the fundraising, we were still pending for the Development Approval.
We actually had an approval for the 25 Lots back in May 2022, which was a few months ago but it had one clause that we were definitely not happy with that we went back and pushed back.
So it took 5 or 6 months to get that 25 Lot Initial Approval, but it took another 4 months to get that one clause amended. So I’m really glad that it got done.
Bit of back and forth. Bit of “argy bargy” with the council (not unusual.)
That was with Moreton Bay Regional Council. And they’re actually quite good to deal with.
For those of you who haven’t dealt with Moreton Bay or general councils in general, some councils can be more difficult than others. I’d say Brisbane City Council is quite difficult in certain areas. If you don’t tick the box and you want to really push the envelope. Or the zoning is quite grey – like Emerging Community.
Emerging Community Zoning is a very difficult zoning. So if you’re a beginner, I’d definitely suggest you leave that one alone.
Redlands, Logan, Ipswich –– not easy either. But I think part of the challenge is also that because there’s a lot of developers out there and a lot of sites being swooped on and being developed. A lot of the easier ones with less trees, less flooding issues, less overlays. A lot of them have either been developed or have currently been purchased. The ones that are left are more difficult.
I wouldn’t say they’re the dregs, but they are more difficult.
Just because of the way the industry works… all the low-hanging fruit… If anyone’s got half a brain or we’ve got the resources, got a team, and the money to be able to go and door knock them letterbox drop them, approach them, then it allows a lot of the sites to have been taken.
But that doesn’t mean there are no deals out there.
Absolutely not. If you’re open to being open-minded and solving problems, it’s really cool.
So a couple of other things.
First, I want to say thanks to a couple of people who invested with me.
Steve, he definitely won the award for the most questions there. Being an accountant and auditor in his past life, I definitely got the third degree there 🙂 But Steve’s been a client of mine for about a year, and I was more than happy to hear answer those questions in good faith.
Gary and Brian gave me a good ride legally in terms of going through the legal loopholes with multiple back and forth with solicitor. But I’m more than happy to play that game and go through the ups and downs because it’s their first project with me.
I understand when you haven’t done lending or borrowing before with people, you got to understand the process. So I’m glad we’re able to tick all those boxes and proceed forth from there.
Next steps with this particular project? I had to be very quiet about this information until NOW
So one of the next steps with this particular project I have been very quiet about, simply because there is some sensitive information in there. But we are settling the purchase in less than four weeks.
So that’s due to be settled by the 10th of October.
That’s the contract settlement date, I had a 12-month settlement from last year 8th of October last year, and the 8th of October this year. Turns out to be a Saturday, so it’s the 10th of October 2022. And it’s amazing how quickly time flies.
But since then, we’ve achieved a lot of things.
- We’ve been able to obviously get the council approval in the last week or so
- We’ve been able to get bank finance. (On a $3.2 million dollar purchase, we’re able to get the bank finance from a “big four” for $1.6 million)
- So we’re just doing a 50% LVR.
For a couple of reasons, by the way. One, it’s a lot easier to borrow 50% LVR, as opposed to 75% or 80%.
Two, being a commercial purchase and a development site purchase, having the approval made it a lot easier for us to get valuations that were very, very strong.
The $3.2 million purchase came with a valuation of $3.7 million based on the approval of 25 lots here, which is excellent. And they gave us some more manpower and firepower to reassure the investors that our site had value.
Plus, we had a committed buyer on the other end to buy the site off us as well, which I will share in a couple of weeks after we’ve settled the purchase itself.
So I really just don’t want to spoil the ointment at this point in time.
There are just some cool things happening in the background where I was able to find a buyer literally two months after we contracted the site last year. Anyway, once again, thanks to those of you who’ve been listening over the last few weeks and months. Especially to my general updates on Facebook and the investors who came on board over the next 6 and 12 months.
I’m going to look at various other models to bring investors on board, as well as roll out funding into other people’s projects as well.
Let’s keep in touch and I look forward to catching up with you soon.
Have a great weekend for those who are enjoying the sunshine and join the blue skies. Everyone’s talking about the bad weather coming later this year. But enjoy blue skies while we got them.
PS We do have the Brisbane Property Adventure coming up soon… plus various other opportunities for you to come on-site next year.