Hi all,
This is my first post and I don't want to get banned, blackballed or otherwise told off for doing the wrong thing. If I am putting together a joint venture landbanking deal and looking for investors to join me, am I allowed to post details of the deal here?
And if so, which forum area should it go in? This one, or 'general property' or somewhere else?
Thanks!
Cath.
Margaret River, Western Australia.Given the size of the funds you are looking to raise I would very careful about breaching the Managed Investments Act.
Richard Taylor | Australia's leading private lender
Sorry Cath but you cannot advertise for funds here. Even this post is a veiled ad and will be removed later on.
However don't take this as being negative and we would love to see you posting on a regular basis.
Cheers,
'A veiled ad', chuckle chuckle. Seeing my blog URL listed under my name like that, I can see what you mean.
Although I am obviously searching for investors, I honestly do not want to get into trouble for doing the wrong thing, because I would like to become a regular contributor of this forum, the existence of which I did not know about until today. So I'd rather ask the right question, which is not a veiled ad, than the alternative.
Perhaps I should have asked this question – "How do I find investors to do joint venture deals?"
That's the crux of it. I have done a couple of small joint venture deals already and the people I JV'ed with were people I knew. But what do people do when they want to start putting together bigger deals, and they need more (and bigger) investors?
Cath.
PS Richard, I'm pretty sure that with a maximum of 10 people joint venturing together, it's not a managed investment – do you know something different? That's the advice I've had to date, anyway.
Please excuse my ignorance, but what is land banking I have not heard of this term before,
I didn't know either. This webpage gave me an idea: http://www.abc.net.au/news/australia/qld/cairns/200610/s1776530.htm
Another site defined it something along the lines of "Buying and holding large blocks of predeveloped land in the path of progress". I take that to mean that a strategy is to see which boundaries civilization is pushing and buy as much cheap land in that area as you can, then wait until it appreciates as the suburbs expand around your holdings.
Cath
were you featured on a Current affiars a few weeks back ?
Looking for people to buy your dream land in W.A
and build a circus training camp or some such thing ?
Hi Tysonboss and Else,
Landbanking as I understand it, and as I am using it, is buying land with the intention of subdividing it later. In my case, the land I am looking at is zoned rural, but when I look at its location and what is happening in the rest of the area, I believe that this will change in the future. So if I were to buy the land right now, which is what I am attempting to do, I could not do anything with it other than graze some cows and live in the house. However, in a few years time I could apply to the shire to have it rezoned, and if I were successful, suddenly I would have a whole different scenario on my hands. If I were to buy the land after it had been rezoned, it would be a lot more expensive.
As a real estate strategy, it has an element of risk. Will the land be rezoned? And if so, how long will that take? On the flipside of course, the rewards are high if the strategy pays off.
The basic premise is – buy acreage on the outskirts of town, and wait for it to become part of the town.
Nucopia – You're almost right – I was featured on Today Tonight about 2 months ago (time flies…). At that stage I was looking to raise the funds to buy the land myself, and was looking to borrow $100 each from 27 500 people. And yes, I want to build a circus training facility for our local youth circus school so they have a proper place to train. It was a pretty crazy idea and I had a huge response from the tv appearance, but I only had 90 days to do it and at Day 40 it looked a lot to me like Day 90 was on target to arrive before the money. So at that point I thought "right, I'd better drop the idea of buying the whole thing myself, and get some other people in to buy with me."
I still want to build the circus school there, and it is my feeling that when the consortium goes to the shire seeking approval to subdivide, we'll be able to get kudos points for a) making a contribution to the community by providing land to the circus school, and b) protecting a large portion of high quality forest on the block by donating it to the government to add to the adjoining national park, or retaining it as public open space, or whatever.
Like most shires I think, ours is very reluctant to convert rural land into more housing, and environmental concerns are paramount. I have never done a subdivision project before so no doubt there is plenty to learn ahead, but it seems to me, from conversations I've had with all sorts of professionals and otherwise, that creating solutions with multiple wins is much better than just barrelling in with a "we want to chop up this land and make squillions" request.
I'm trying so hard to answer your questions without being a veiled ad – how am I doing, do you think?
Cath.
Cath
Im glad your now taking the more conventional route to fund this deal,
the $100 from 27,000 people giving a gift idea made you seem a bit out there.
and the way it was portrayed by 2day 2night was not to your advantage, to be honest with you
I remember thinking It would be a good plot for a movie Lol
Any way I wish you luck and if you pull this off it will be a dream come true.
if not never mind keep dreaming and doing and eventually you will get there.
At least you will have learned a whole lot of leasons from this experience that will be invaluable for future investments.Dream Believe ..and Achieve !Cath
What documentation do you need to give potential investors when raising funds?
As a general rule, if you are a public company offering securities for sale (for example shares or debentures) then you must provide a disclosure document of some sort to potential investors.A disclosure document is the broad term used to describe all regulated fundraising documents for the issue of securities (for example shares or debentures).
There are three types of disclosure document:
All companies entitled to fundraise can use a prospectus. You may also be able to use an offer information statement or a profile statement depending on the type of fundraising you intend to do and whether you satisfy the restrictions imposed on using those documents. The type of information you'll be required to provide in each of these disclosure documents is different in certain respects.
Prospectuses
A prospectus is the standard disclosure document and has the broadest information requirements. If your prospectus offers securities listed on a stock exchange it may not need to contain as much information as others because much of the information will already have been provided to the public through the exchange.Offer information statements
An offer information statement (OIS) has lower disclosure requirements but can only be used for fundraising up to $5 million in aggregate, that is, including any earlier fundraising under an OIS. If you want to use an OIS you must be able to include with it a copy of an audited financial report with a balance date within the last six months.Profile statements
A profile statement is a document setting out limited key information about the company and the offer. Companies can only use profile statements where ASIC has approved their use. There are currently no approved uses for profile statements.Lodging prospectuses and other disclosure documents
You must lodge your disclosure document with ASIC before it can be used to raise funds.When you have completed the preparation of an offer document:
- use OFFERlist Entry to record summary information about your offer for display on OFFERlist. This summary information will be stored and not published on OFFERlist until the disclosure document has been physically lodged with ASIC.
- If you plan to distribute the disclosure document electronically you must also lodge an electronic version of the disclosure document via OFFERlist Entry.
- Lodge your disclosure document with the appropriate fee as follows:
- If by courier or post, to your state or territory's ASIC Regional Office
- If by hand delivery, to your state or territory's ASIC Service Centre, unless you are based in NSW. NSW documents should be hand delivered to the NSW Regional Office
Under what circumstances can you fundraise without a disclosure document?
There are a number of circumstances when we will give an exemption from the requirement to provide a disclosure document when fundraising. It is important that you get legal advice about whether they apply to you. A general summary of the exemptions is provided here.In summary, a disclosure document is not required when:
- an offer is a personal offer, and if:
- offers or invitations have been made to fewer than 20 persons in the previous 12 months, and
- the new offer will not result in more than $2 million being raised in that 12 months;
Note: you must not advertise the offer when you rely on this exemption
- the offers are made to specified people who are presumed not to need disclosure because of their financial capacity, experience, or wholesale status;
- the offers are made to current holders of the securities;
- no money or other form of payment is payable for the securities;
- other disclosure regimes under the Corporations Act apply
If in doubt check with ASIC as the penalties are quiet high.
Richard Taylor | Australia's leading private lender
Hi Nucopia,
And there you have hit the nail on the head. I said I wanted to borrow the money from all those people, but Today Tonight said I was asking people to 'give' me money. Which is quite different. What I was aiming to do was borrow from individuals rather than banks, but I suspect it didn't make quite as good a story.
Unfortunately, this subtle change was not to my advantage, as you quite rightly point out.
I have indeed learned a lot of lessons from this journey, and continue to learn. I could never have foreseen some of the experiences I've had! I don't mind having been a bit mental, one thing I'm learning as I go along is that sometimes doing things a bit differently works. The other thing is that I'm not going to be right all the time. I'm looking for that quote about success being what happens once a person continues past a series of 'failures', or learning opportunities. These ones sum up the same idea:
It doesn’t matter how many times you fail. It doesn’t matter how many times you almost get it right. No one is going to know or care about your failures, and neither should you. All you have to do is learn from them and those around you because… All that matters in business is that you get it right once. Then everyone can tell you how lucky you are.
Mark CubanWe all have to decide how we are going to fail.. by not going far enough or by going too far.
Sumner RedstoneSuccess is not built on success. It's built on failure. It's built on frustration. Sometimes its built on catastrophe.
Sumner Redstone
Failure is the opportunity to begin again, more intelligently.
Henry FordHi Richard,
Thanks for the info. This is food for thought – I have been advised that if I am putting together a joint venture deal with just 10 people, I didn't need to worry about the prospectus thing.
But this information casts some doubt on that. Did you copy it from the ASIC website?
I don't have a lot of confidence in phoning ASIC direct – they sent me a letter about something on my website in the last couple of months and when I phoned them the advice I got was inadequate, to say the least. They were not able to answer questions about the very thing they had raised themselves as a potential issue.
Their modus operandi in that instance was: 1) They sent me a letter alerting me to a potential problem. 2) I phoned them for clarification of the issue, and to clarify what I was doing. 3) They asked me to send them a letter outlining my position. 4) They wrote back and told me that they couldn't tell me if what I was doing was ok or not.
So it was basically "you might be doing something wrong for which we might penalise you, but you'll have to figure out for yourself whether or not you're doing something wrong, because we're not going to tell you." It seems to me a bit like a football game where the players have to kick the ball into goals that are not marked.
Cath.
I have been involved in raising funds for both our own projects and on behalf of other investors over the last 10 years so am aware of the Managed Investment Requirment
Richard Taylor | Australia's leading private lender
Hi Cath,
I also know a little about ASIC requirements and agree with Richard, you are likely to run into some trouble from ASIC with what you are attempting. Also, you really should get some experience with this kind of deal before you go risking other people's money, it seems from what you have written that the process of rezoning and subdividing land is new to you.
Regards
Alistair
Dream Believe ..and Achieve !
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