What is the investment for?

Our investors supply us with the capital to make house purchases. The investment will in most cases cover the difference between the bank loan taken out by 'That House Guy' and the full purchase price. In essence, the investor is covering the deposit. This is approximately 10-20% of the purchase price and will vary in each transaction.

Third party investment is only required where we choose to on-sell a house. This is generally done using a vendor finance strategy, where the new buyer purchases the house over a period of years. Around 3-4 years is the standard timeframe. At the end of this time, you are guaranteed the return of your initial capital investment. You will receive interest payments each month during this period.

What amount of investment is required?

In most cases each investment represents a single house/unit purchase. As most of the purchases we make are in the $250,000 to $500,000 range, we are looking at a 10-20% investment in each of these. This puts a standard investment amount required in the range of $25,000 to $100,000. 

How long is my money invested?

As noted above, we generally invest the money for a period of 3-4 years. This is because we on-sell the property using a vendor finance strategy which takes this length of time for the new buyer to purchase the house. Each transaction is different in length and you are informed of the agreed term BEFORE investing any money. If the period is too long for you, simply do not invest.

What is the return on my investment?

As we are holding your investment for a number of years, we wish to ensure you are paid well for it. As such we guarantee an annual interest rate 3% higher than the current 4 year term deposit rate with Commonwealth Bank. At present rates (with the Commonwealth Bank 4 year term deposit rate being 4.4% per annum) you would receive 7.4% per annum. You will be hard pressed to find this return in the property market.

How do you make such a strong return?

Our experience in selling houses with vendor finance strategies has proven time after time that it IS not just possible, but ensured to make these returns. As the buyer is paying a premium on both the price of the property and the weekly repayments, it enables us to make strong returns.

In simple terms, we sell a house in the same way a large retail store sells a sofa. There are always 2 prices on their sofa - a 'pay now' (cash) price and a 'pay later' (credit) price. For those who can pay cash, they buy at the cash price (or retail/market value). For those who pay over time with credit, they pay a premium on the retail/market value for the privilege of taking possession of the sofa there and then. This is exactly how we sell houses! It ensures our returns and provides a house for someone who would not be able to buy one using the standard 'pay now' (cash) system.

How is my investment protected?

Your investment is secured by placing a registered caveat on the title deed. This ensures that upon completion of the sale of the house in which your investment is involved, that you are paid. The 'First Mortgagee' (usually a bank) will be paid first and you as the caveat holder will be paid next and any amount remaining is then distributed to 'That House Guy'.

What legal instrument is used for this investment?

A legally binding Joint Venture agreement between yourself and 'That House Guy' as joint investors "for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill". - United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1

The following four points are included in the Joint Venture, ensuring that there is transparency and clarity for all parties in the investment:

1. the joint venture project (in this case, the purchase of a residential property)
2. the contributions by both parties (including monetary and skills)
3. the profit sharing (or % p.a. paid to you for your investment)
4. termination (the agreed point at which you receive your capital back)

Interested in being an investor?

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