EOS property group - Karratha townhouses

Hi,

has anyone had any dealings with EOS property please?

I do not yet have an IP and am donig my research into what would be a good first IP.

They have a joint venture, 'The armchair developer program', pay 133,000 for the land, 262,000 for construction, total of 395,000.  Value at completion is 530,000 with rent at 1,100 per week. Bird Property Group will be the ones completing the project.

Their advice is to rent for two to three years, then sell before the rental market flatens out.

Any comments would be much appreciated.

Thank you.

Hi Bob,

Just going back through some old posts and caught this one.

Note - vested interests apply here. I am employed by Eos Property Group so take what I say with a grain of salt.

Just calrifying some of your numbers.

Intiial buy in figure is correct at $133K
Construction is correct at $262K
Total investment is $395K
Feasibility showed an estimated on completion value of $530K.

We have since had off the plan valuation done by Australian Valuation Services (http://www.avsproperty.net.au) which came in at $550k. We wanted to double check the feasibility prediction. Obvioulsy this valuation is no good for finance purposes and will need to be upodated when individuals refinance at project conclusion.

Local independent agent did not realise the units are being furnished and have reassessed the rent at $1300/$1400/week and not $1,100/week.

This gives rent return in excess of 17%.

Bird Property Group is employed as development manager by the investors and is employed by them to complete the project on their behalf. Website http://birdpropertygroup.com.au/

As Karratha is a 'mining town' it is important to monitor the market more closely than say, Perth metro area.

Whether Karratha suits you is ultimately your decision - Terry Ryder has just updated his Karartha report. This can be purchased for $30 and is available at http://www.hotspotting.com.au/report/107-karratha

Derek
North Perth Project coming up - est +$92K profit & rent returns ~9%+ - http://tinyurl.com/7untpjy
derek@eosproperty.com.au | www.eosproperty.com.au | 1300 558 114

Hi Derek,

thank you - much appreciated.

Further to Bob1's comments ...

This type of investing interests me , Karratha and North Perth investments seem to tick all the right boxes, good location, rental returns and capital appreciation.

This way of investing is very new to me and hope people here can answer the following questions.
(Derek hope you don't mind me asking these questions, this is all very new to me and just doing my due diligence).

What are the pitfalls in these type of investments? And how can you protect your money should something go wrong?

As these type of developments rely on something like 8 or 10 separate investors, what happens if one of these investors quits before the development is completed? Things that may happen ...
Losing their job.
Going bankrupt.
Divorce.
Becoming ill (or death).
100 + other reasons.

Also there may be council approval delays, or construction delays which would result in extra holding (interest) costs.
Any way that I can add a clause to contract, i.e. get a refund of money if development goes over time, over budget?
Or if the development goes belly-up?

EOS and the Bird Property Group seem to have a good track record, but what happens if for whatever reason they go under? Anyway of protecting your self?

Obviously I would have to run the contract and numbers with my own lawyer and accountant.
And ask local real-estate agents what the expected rental returns and value on completion might be.

Is there anything else anyone could add to help me with making right decision in regards to this type of investing?

Cheers
S

Hi S,

Just repeating vested interests still apply.

All good questions and the ones investors should be asking.

Estimated rents are all based on our research which is combined with rental assessments by agents independent of us and who have good local footprint in the area being looked at.

Estimated completed valuation are also based on market research and backed up by independent valuations by licensed and independent valuers. In Perth we use Hegneys to conduct OTP valuations for us. Pilbara valuations were done by AVS.

Note the valuations we obtain are only used to reinforce our research and would be no good for finance purposes.

Given the duration of time between start and finish of a project market conditions can change and estimated rents and on completion valuations can go both ways. This is something potential investors need to consider.

We endeavour to keep planning delays to an absolute minimum through long options, the property being zoned correctly to begin with and by having lots of discussions with planners before settlement so we know how the planners are thinking before any plans are submitted. For example we are due to settle on a block in South Hedland this week and the plans are almost ready for submission to council.

Having said that there is potential for delays for any number of reasons that are outside of our control and tnvestors need to consider this possibility too.
 
Accompanying each project are comprehensive legal documents which outline the obligations on all participants including instances such as those you outline. All investors are encouraged to have their legal advisors check the documentation out before being involved. These are all made available to investors before they commit themselves. Having said that we are not in the habit of throwing the documentation around to all and sundry due to the nature of the documents and the intellectual property involved.

Hope this helps - happy to chat on the phone if you want more details. 

Derek
North Perth Project coming up - est +$92K profit & rent returns ~9%+ - http://tinyurl.com/7untpjy
derek@eosproperty.com.au | www.eosproperty.com.au | 1300 558 114

Thanks for the reply Derek.
The webinar was very informative.