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  • Profile photo of RWRW
    Participant
    @rawi
    Join Date: 2019
    Post Count: 0

    Hi :)

    I’m fairly new to real estate investing and would like some advice on an idea I’ve been rolling around.

    I am interested in purchasing a property but require some assistance with funding, and research has led me to the idea of crowd funded property finance.

    My goal is not to make millions, but secure a specific property for our family, which suits our needs. I also wish to create a good return for investors so that it’s a win-win situation for everyone involved.

    My idea is to offer 12x 800m2 blocks of said property at around 60% of current retail price, with a 2 year settlement term. By this time, based on recent sales and projected growth forecast, each block will be worth at least double what was paid for them.
    Funding will cover property purchase, re-zoning (Already approved for 2000m2 blocks in 2009), roads, sewerage and power to each block.

    These blocks are a 2 minute walk to one of Australia’s most pristine beaches.

    Does this sound viable, and are there are any major floors in this idea?

    Thanks for any constructive and factual advice.

    Profile photo of RWRW
    Participant
    @rawi
    Join Date: 2019
    Post Count: 0
    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    why would someone sell something for 60% retail price?
    When you sell property there is generally a 10% deposit and the rest is paid at settlement. And you cannot get access to the deposit generally.

    It sounds like you are wanting people to pay up front, but not get legal title until 2 years later. Don’t think many would be prepared to risk that.

    You could set up some sort of managed investment scheme where the client lends you money and you develop with them taking a mortgage over property. But you would need to own it outright.
    If you are raising money from the public this will be very costly to set up.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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