Hi everyone,
Michael Fuller here from hotspotcentral.com.au.
I thought I'd shed some light on how this works.
Hotspotcentral are first and foremost a property research company. We write on the subject of research for both YIP and SPI magazine and our DSR data (dsrscore.com.au) is referenced by many thousands of people each month via the yip website, our app (boomapp.com.au) and in the back of the property magazines.
In response to our data subscribers asking for our help in getting them into opportunities we would endorse, we investigated a number of builders, developers and other entities brought to us through our network and settled on Mainz as one option (there is another very compelling one in the pipeline).
Our research helps us pinpoint strong locations based on a scan of over 15,000 suburbs and we then put word out to our partners that we are interested in a project in this area. The majority of Mainz' projects do not meet these criteria but when they do we lock it down and secure exclusivity for our subscribers.
I've had a number of prospective investors look at their projects that we do not endorse (to save $10k as Brian/captkirk) below suggests and then subsequently come back to us. The builder looks at the paper profit upfront , we look at this AND the potential for ongoing capital growth. This is crucial and far outways our fee.
We're also offering a new service under an AFSL whereby investors will be able to acquire a property at cost but without the (current) personal guarantees required on construction funding. There are other fundamental additions we're making to this model which I am happy to discuss outside this forum on a personal basis (mob: 0435 918 136). This revised model removes much of the risk, albeit it quite small, on these boutique townhouse projects.
With regards the $85,000 cost, there is always a risk this can happen. In this case the investors will still be getting a brand new property at substantially less than market value in a solid growth location. This cost was nothing to do with the builder or could not possibly have been foreseen and may impact the final profit margin by a fe percent. Not a train smash given the profit left on the table.
That said, these projects are not for everyone. We're very selective over who we allow into our projects and limit our investors to 30 per annum across a select few projects. Given we have 10,000+ subscribers on our database we can be and should be.
If you want to read what we have said about this model and our research methodologies in our various articles and columns in the property magazines then please visit hotspotcentrel.com.au/about-us/media-room/
Just for the record, Rich Harvey is not involved in these projects or hotspotcentral as mentioned above.
Hope this info helps a bit.
Regards
Michael Fuller