Profit share from the comfort of your armchair

Smart investors are constantly seeking alternative and smarter ways to invest their money and grow their wealth, particularly in an era of difficult borrowing and an unpredictable share market.

For Paul Wilson (pictured), founder and CEO of We Find Houses Group, Armchair Development is the logical solution. 

“With Armchair Development, you’re able to tap into the skills of a team of independent experts who do all the hard work of identifying, analysing and ultimately overseeing projects through to completion,” says Wilson. 

KEY BENEFITS OF ARMCHAIR DEVELOPMENT

• High return potential – projected returns of 20% plus per annum
• Projected short time frames – Average time frames of between 12 and 24 months
• Measurable commercial risk – Strong security and investment structures backed by tangible assets
• Low entry point – Minimum investment from as low as $30,000 to $50,000, depending on the project
• Suitable for SMSF investors
• Transparency – An AFSL-regulated investment structure that provides all documents and data with every project prior to investing, as well as ongoing regular updates
• An option for investors looking for an innovative way to manufacture growth in the property market without having to do traditional ‘borrow, buy and hold’ investing

What is Armchair Development?

Armchair Development is an investment strategy which creates a regulated environment that allows investors to share in development profi ts without having to take on the associated commercial risk and obligations. A 2018 partnership with ISG Funds Management has given investors a clear pathway and exclusive access to participate in residential and commercial projects within an AFSL regulated environment.

Project capital comes from private funds, rather than solely from bank loans or internal revenue, says Wilson. A customised fund structure is then applied to ensure investment funds are independently managed, helping mitigate risk so the desired outcome can be achieved for investors.

“This reduces the holding costs, improves serviceability and ultimately maximises profi ts,” Wilson says. “In turn, the development company is able to share those profi ts with the investors.” 

This doesn’t mean that projects have no lending at all; just that they borrow less. 

“This combines the best of both worlds. Investors have reassurance through a stringent level of due diligence and robust risk assessment, both by the loaning bank and the framework provided by ISG and their specialist team of consultants,” he says.

Wilson points to flagship development Dakabin Crossing as an example – a seven-stage, 130-townhouse development that is on track to return investor capital by September 2019.

“Investors provided over $6m of equity in exchange for a fi xed return of 21% per annum, paid monthly,” he says.

In February 2019, East Estate at Tweed Heads in NSW, a 38-lot subdivision, also opened for investors. The land was purchased in 2013 for $150,000 per lot and is now selling for between $380,000 and $410,000 per lot. 

“This has provided an opportunity for investors to access returns of 30.47% per annum for a short 16-month project, on schedule for completion in May 2020,” Wilson says.

Carindale investment opportunity

Noble Retirement Living in Carindale, Queensland, is a luxury retirement living project. Upon completion, it will be operated by the awardwinning Noble Group, which has over 20 years’ experience in the over-50s retirement resort communities sector.

The investment term for Noble Retirement Living in Carindale is 28 months, offering fixed returns of 20% net per annum paid monthly, Wilson says.

“The demand for retirement accommodation has become the fastest-growing housing sector in Australia – ahead of hotels, industry and office sectors,” says Wilson. “Baby boomers are increasingly looking for homes where they can age comfortably.”These factors present an ideal opportunity for investors, he says.