Co-Developer/Co-Investor

Dec 6, 2011 | Global Property

The Co-Developer and Co-Investor strategies have been designed to help you acquire property at wholesale rates and in the process save on acquisition costs and improve your return on investment. The strategies bring together a group of investors to purchase a new development site or an existing multi-dwelling site, which could include apartments or units, so as to purchase at wholesale rates and benefit from the increased collective acquisition power.

Co-Developer Strategy

In Co-Developer, United Global Capital helps to connect you with the right people from acquisition through to completion and investment. We bring you together with our network of investors so that we can “bulk purchasedevelopment sites so that you are paying less than retail. From there, a portfolio of plans is developed which have been specifically developed for the investor market so that they drive the best rental and capital growth returns. The plans are then tendered with builders to get the best price for value and building contracts are then signed. Your property is then built.

The outcomes this strategy aims to deliver include:

  • Reducing acquisition costs such as stamp duty, as the stamp duty value is typically assessed on the land content of the acquisition, not the end value of the developed property.
  • Lower entry costs, as investors benefit from the wholesale negotiating power of multiple investors buying as one.
  • A higher rental yield as the initial investment is lowered, thus improving cash flow returns.
  • Lower annual maintenance costs, as new buildings should inherently require less maintenance.
  • Higher depreciation allowances, which improve the tax effectiveness of your investment.
  • A high quality, lower cost, higher yielding and tax effective property investment.

Co-Investor Strategy

The Co-Investor Strategy is a variation on the Co-Developer Strategy, but involves the same basic principles, that being, using the power of co-investment to lower acquisition costs and increase cash flow. This strategy typically involves introducing clients to established apartments and unit sites. These sites are typically older established sites which require some value add. We aim to negotiate the purchase of these sites at wholesale values because of the bulk buying power co-investors can deliver. Once purchased, a program of value up lift through small but effective renovations and redesigns occurs.

The outcomes this strategy aims to deliver include:

  • Lower entry costs as sites are purchased in bulk by co-investors.
  • Lower renovation costs as bulk renovations allow for greater negotiation power.
  • Short term capital value increases, as the renovations typically take less time to complete than a new development which needs to be built from the ground up.
  • Higher rental yields as the lower acquisition costs and capital improvements increase the rental income which can be generated from the property.
  • Improved depreciation allowances as the new renovations can increase the depreciations afforded in the property.
  • Opportunity to trade in and out of each investment in quick succession as the time required to realise the capital value improvements is shortened compared to Co-Developer.
<a href="https://ugc.net.au/author/brett/" target="_self">Brett Dickinson</a>

Brett Dickinson

Brett is a Licensed Real Estate Agent and manages United Global Capital's property projects and client acquisitions.

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