Mt Waverley Townhouse Development

The funds are being raised for the purpose of construction of two architecturally designed townhouses at 38 Price Avenue, Mount Waverley, Victoria.


Days Left


$2,000

Min Invest

18

Months

20%

Expected Return
$521,000 raised of $500,000

Funding Closed
* Note that this is a No Obligation Expression of interest, you get to review the Prospectus before making any decisions
** The information provided on this webpage is only a summary of the offer and may not contain all the information needed to determine if this offer is right for you. You should read the Prospectus in its entirety which can be downloaded in the Downloads section below as well as on the Project application page once you press the Interest button.

Downloads





EXPLAINER VIDEO


Project Summary


for whom

Summary

Zhengjiu Li is the current owner of the property situated at 38 Price Avenue Mount Waverley Victoria (Land) which was purchased for $1,050,000 inc. GST. The Land currently comprises an older dwelling which will be demolished.

The Developer proposes to construct on the Land 2x5 bedroom townhouses for resale on completion (Project). Net sale proceeds of the Project (after GST & selling costs) on completion will be firstly used to repay the construction loan and secondly for repayment of investor capital and distributions raised under this Part 2 PDS. Balance of surplus funds remaining from the net sale proceeds will be for the benefit of the Developer.


security_long

Security

Guardian as Responsible Entity of the Fund will establish a Special Purpose Vehicle (SPV) company for the sole purpose of holding Investors Interests. Ordinary shares in this SPV company will be held by the Custodian of the Fund (Australian Executor Trustees Limited) which will correspond with the number of Interests issued by the Fund to Investors in this Class of Interests.

This SPV will enter into a Construction & Development Agreement with the Developer to develop the Project as set out in this Part 2 PDS. In addition the SPV will lodge a caveat over the Land to protect the rights of Investors.

Application Money will be held by the Responsible Entity and released to the Developer on the following conditions:

1. Once the final Development Approval and Building Approvals have been received by Council and deemed satisfactory to the Responsible Entity.

2. Upon receipt of a fixed price building contract from a reputable builder.

3. Approval of the construction loan from the Construction Lender on their normal terms and conditions. Such funding to be sufficient to complete the Project.

4. All payments to the Developer to be against approved invoices for costs incurred for the Project.


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Investor Distribution

On completion the townhouses will be sold on the open market and investors will get their returns paid our before the Developer makes any returns.


Suburb Profile




38 Price Avenue, Mount Waverley, Melbourne, 3149, Australia



for whom

Marketability

The 38 Price Avenue Mount Waverley Townhouse Development is a simple small sized Melbourne eastern suburb development bringing 2 high quality 5 bedroom townhouses to market. Each townhouse will have an area of 276.3 sq. metres and 244.5 sq. metres respectively and the total land area of the development is 701 sq. metres. Each townhouse has 5 bedrooms plus study over two levels. Each of them has a basement car park to allow parking of two vehicles respectively.

The Developer will use reasonably standard construction techniques incorporating a fixed price building contract. The site is well within the prestigious Mount Waverley Public Secondary College which ranks as one of the best public colleges in Victoria and surrounding properties have been known to achieve a significant premium among overseas investors due to its desirable school zone location. The site is close to two railway stations and is surrounded by various parks with all services connected.

Marketability

residents

Residents

With its large houses and plentiful schools, families are the main demographic in Mount Waverley – you’ll find a mix of older and middle-aged families, either with kids still at home or without, as well as some younger people living an independent life.

Investment Profile


type

Type


Units in a Registered Retail Managed investment Scheme


security

Security


Investors get paid before Developer gets paid. Caveat on Property. Developer can be removed from the project if investor returns are imperiled. If funding goals are not met investors get their money back without any deductions. If construction loan is not obtained, investors get their money back without any deductions. If plans are not approved within a reasonable duration of time, If funding goals are not met investors get their money back without any deductions. Less


expected returns

Expected Returns

20% on invested amount over 18 months

returns paid as

Return Paid As

Returns will be remitted to nominated bank account at the completion of the project Less

Taxation

Taxation


Likely to be treated similar to Redeemable Preferred Shares, which means you pay your own tax. But this will be confirmed later. Less

Project Profile


proposer

Developer


Zhengjiu Li. Zhengjiu Li is a cofounder at Doyen Property Group Pty Ltd and leads the sales team. Doyen Property Group is a full service real estate company and is focused primarily on servicing overseas investors looking to invest in Australia. In 2015 alone he made sales of 13M AUD and the group made sales in excess of 100M AUD


duration

Duration


18 Months


current_status

Current Status


Land has been acquired by Developer and plans for subdivision are filed in Monash Council

rationale

Rationale


The site is located at 38 Price Avenue, Mount Waverley which is an upmarket Melbourne suburb to the south east of the CBD. The site is well within the prestigious Mount Waverley Public Secondary College which ranks as one of the best public colleges in Victoria and surrounding properties have been known to achieve a significant premium among overseas investors due to its desirable school zone location.
The site is close to two railway stations and is surrounded by various parks with all services connected.

risk

Risk


Risk
The Construction Lender will take a registered first mortgage over the Land to allow the Project to be completed. They rank ahead of any Interests issued by the Fund and will have the right to sell the Land should the loan fall into default.

Should the Project incur cost overruns, not be completed, and generally fall into disrepair, the Construction Lender will be entitled to sell the Land as mortgagee in possession to recover its debt. Should this occur some or all of funds invested under this Part 2 PDS may be lost.

The Project may fail to be completed on time and within budget. The builder appointed to the Project may default in which case a new builder will be required to complete the Project, incurring additional costs.

The Developer will undertake development of the Project and as such will be required to comply with a number of statutory authorities including council approvals and consents, taxation issues, building contracts, project managers, Construction Lenders and the like.

There is a risk that the end value of the townhouses may be less than current market value and the projected profits as shown in this Part 2 PDS may not be achieved in part or in full.

There is no established secondary market (e.g. stock exchange) for these Interests. You should treat your investment as illiquid and being in place for the full term.





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How To Invest


1. Express interest using the button above. It will open online application form and give PDS Download option
2. Read the PDS/Offer document carefully.
3. Enter the amount and details as you deem fit.
4. Sign the document.
5. Complete any AML/CTF obligations (Driver license copies)
6. Make a Bank transfer to

BankNAB Pitt St Sydney
Account Name
BSB 082067
Account No
ReferencePrice St < Investor Name >

Funding Closed
* Note that this is a No Obligation Expression of interest, you get to review the Prospectus before making any decisions

Project FAQs


What happens if the funding goals are not met?

All monies raised will be returned to investors without any deductions or fees and with any bank interest if applicable.

What happens if plans dont get approved or dont come in within a certain period of time delaying the project substantially?

All monies raised will be returned to investors without any deductions or fees and with any bank interest if applicable.

What happens if Developer does not get a construction loan for the expected amount?

All monies raised will be returned to investors without any deductions or fees and with any bank interest if applicable.

What happens if the project makes less than 20% profit?

Investors will get their returns out first at the agreed upon rate of 20%. What remains (if anything) goes to investors.

Are investors taking on the project debt?

No, the debt is the responsibility of the Developer only. You as an investor have no more liability beyond your investment capital.

Who is the Builder?

Yet to be decided, a reputable builder will be appointed once planning permits come through.

Why is the Developer doing this? He is making only a small amount of money?

Top up capital in form of equity is usually expensive. Access to this capital makes the project possible and hence the Developer is doing this. Secondly although the valuation states 1.3M and 1.25M the Developer believes he will be able to sell at a much higher price in the overseas investor market. Anything beyond the investors 20% return goes to the Developer and he has confidence in the viability of the deal.

Is Estate Baron investing in the deal?

Estate Baron as a company is not investing in the deal as it is a technology platform service provider. However Estate Baron team members are investing in their private capacity and will be treated exactly the same as any other investor in the deal without any special preferences.

What is my security?

The SPV puts a caveat on the land on behalf of the investors. The investor nominated Directors can fire the Developer and take control of the Development in case of project running in trouble. The SPV has all Development rights to the project and can buy out the land at cost as per the terms of the agreement. Investors get paid out before the developer make any money.

Is the 20% rate annualized?

The 20% is for the duration of the project and is an absolute return. We expect the project to be completed in 12 to 18 months.

What happens if the project takes longer than 18 months?

The project is a very small 2 townhouse construction and should ideally take no more than 8 to 9 months. However every Development project has risks. In the PDS we have disclosed all possible risks we could envision. In case of delays, we have the right to fire the Developer and step in.

Is it possible that I could loose my money?

Yes. While we do significant due diligence and Estate Baron team members are investing in their personal capacity you should treat this similar to investing in the share market. The project could run into a loss in a worst case scenario. However you are not liable for any of the debt borne by the Developer.

Can I make more than 20% in the project?

If you are looking to invest a substantial amount (more than 250K) Estate Baron can consider rebating a portion of its fees in order to give you a larger return. Please get in touch if you are serious about a larger commitment. For any amounts smaller than that your returns will be fixed to 20%.

My account shows bonus credits? How do I get those?

You will be able to submit the bonus amount for rebates once you have invested in a particular project and the funding goals of the project are achieved. We will either give you a gift card for the amount or remit the amount to your bank account.

How will I be updated about the projects progress?

We will send you regular updates via email, including photos and videos.

Will I be able to participate in the Development actively?

No, your role is of a silent investor. While you can pose questions and concerns about the projects progress, you will not be playing a role in the management of the project.

Can I visit the site during Development?

May be, it depends upon whether the construction site is considered safe for your visit according to the project manager. Also if your visit interferes with the progress of the project then we will not be able to facilitate an entry within the site. You can however observe from a safe distance.

I am interested in buying the townhouses, what do I do?

Excellent, get in touch with us at info@estatebaron.com. You could save on stamp duty, sales commissions, and also save 20% by investing in this project.

Where can I see the feasibility of the project?

The feasibility and all the numbers are detailed in the PDS/Offer Document which can be accessed by expressing interest in the project using the blue button at the top of this page.

Can I get my money back earlier if I run into an emergency, before the project completes?

We cannot offer you liquidity before the project completes. However if you find a buyer for your units, we will help facilitate the transfer of your units. You should however in everybody's best interest plan your investment in such a manner that does not place you in duress. You should expect to stay invested for the duration of the project.

What are the Legal structures underlying this? What am I investing in?

You are investing a Registered Retail Managed Investment Scheme called The Guardian Investment fund whose scheme number is ARSN 168 048 057 set up by Guardian Securities Ltd (ACN 106 187 731) (‘Guardian’) which holds Australian Financial Services Licence (AFSL) No. 240506. Estate Baron is a Corporate Authorized Rep (no. 001239306) of Guardian and is authorized to provide general advise only in interests of the Guardian investment fund. The custodian is Australian Execution Trustees and they will hold shares in the SPV on behalf of the investors. You will get units for this class (Mount Waverley Development) in the Guardian investment fund which will acknowledge your investments.

Are there any fees associated with my investment?

The returns of 20% are net of all costs, which means there are no fees for you to invest in the project. For instance if you invest $2000 then your expected return would be $400 and you should be paid back $2000 + $400 = $2400 on completion of this project. You may have to pay taxes to the ATO as per your marginal rates and other personal circumstance.

Where does the money go?

Estate Baron never touches any of the funds raised. The money is held by the Custodian, Australian Execution Trustees on behalf of the investors. They will release the funds to the developer only for invoices for the project related work.


More questions/comments/concerns? You can post them here