How to Get a Discount on Real Estate

Aug 26, 2016 | Global Property

United Global Capital (UGC) have worked closely with builders, developers, architects, town planners and a range of other finance and real estate professionals to devise a strategy where regular investors can own quality investment property at a cost far less than buying on the open market.  In fact, you can own the property for less than if you were buying directly from the developer because – you are the developer!

That doesn’t mean you need to know any more than you do now and you don’t need to do any additional work, it simply means your investing in the property at the development stage rather than later when it’s for sale off-the-plan or offered on realestate.com.au.

By investing early – you are assisting the developer to complete the project and in return you get a share of the project profit to put toward owning the completed property you were involved in developing and building.

And it gets better! Because you own a quality new property that attracts quality tenants and you are owning it for 10% – 15% less than market value, your ongoing returns are boosted in perpetuity.  The property will still receive market rate rents yet you paid less to own it. Rather than getting 3 – 4% yields on your investment property, using this strategy you can achieve 6% – 9% yields on your true cost of purchasing.

These returns are possible for all investors with the ability to invest $100,000.

Here’s how it works:

CoDeveloper Graphic Model 2

Participants in the CoDeveloper Strategy retain the development profits and use those profits to own one of the completed properties, thereby securing a significant discount to market value.  UGC have prepared a comprehensive presentation explaining the strategy in detail.

CoDeveloper Example – Murarrie Queensland

UGC have secured a development site for 6 townhouses in Murrarie to implement the CoDeveloper Strategy.  UGC clients have invested in the project that will see them owning a Townhouse with a guaranteed $48,400 discount to market value plus additional profit to be distributed at completion.  A summary of this project is outlined here:

Location – Why Murarrie?

  • In the early phase of its gentrification cycle. The big money has only just started to be invested in the area
  • A quality suburb, that represents value and is in the early phase of a new price uptrend
  • Located next to proven investment suburbs like Cannon Hill and Morningside allowing us to take advantage of the ripple effect
  • Significantly higher cash flow than Melbourne and Sydney’s average cash flow generation
  • Conveniently located to many desirable public amenities

Key features of the project:

  • Estimated Total Return of 63% in 14 months on $110,000 invested (Before tax and transaction costs)
  • Estimated Annualised Rate of Return – between 37% to 52.5% on $110,000 invested (Before tax and transaction costs)
  • Required $110,000 investment in development
  • 6 townhouses to be constructed on Murarrie Road, Murarrie QLD (12km drive from Brisbane CBD)
  • $525,000 estimated market value and contract price. Investors purchase at a guaranteed discount of $48,400 with potential increase to $70,000+ within 14 months
  • Priced $100,000+ cheaper than similar townhouses within 100 meters and approximately $150,000+ cheaper based on settlement capital required
  • 14 month estimated timeline – Completion date expected June 2017
  • 6-7% estimated rental yield on settlement amount
  • CoDeveloper townhouses are 3 bedroom, 3 bathroom, 1 car space with 133 square meter internal living space
  • CoDeveloper townhouses have been designed to allow for conversion into dual occupancy for greater returns (1 x 2 bed, 2 bath & 1 x 1 bed, 1 bath)
  • All townhouses built to a high level of finish by experienced and reputable builder
  • Located within 1 km of Murarrie Train Station, Parkland, Cannon Hill Shopping Centre, East Village Shopping Precinct Development, Multiple Bus Stops and Bus Routes

We are extremely excited by this opportunity and believe our disciplined investment selection process has identified a terrific investment opportunity.

If you or anyone you know is looking to invest in real estate and would be interested in exploring the merits of UGC’s CoDeveloper property investment strategy, book a discussion with an advisor by completing the form here

<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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