Our projects offer the opportunity to invest with mortgage security on a loan to equity ratio of 1:2, returning 10% per annum for a fixed term of 1 to 5 years.
Working Together
- Monopoly Property Group (MPG) specialises in establishing special purpose investment vehicles for international investors.
- MPG has a proven track record of success with high net worth international investors (references available upon request).
- Minimum cash investment AUD 2,000,000.00
Investment Vehicle
- MPG establishes a new investment vehicle to carry out each Project so that individual investors can be certain the investment vehicle has no prior history or undisclosed liabilities.
- The investment vehicle is usually a Fixed Unit Trust with a newly incorporated company as the trustee.
- The company trustee is entitled to the profits of each Project.
Why a Unit Trust?
- Unlike a Company, a Unit Trust pays no Australian tax on its profits.
- All profits made by the Unit Trust flow directly to the Unitholder in proportion to their Unitholding.
- All Unitholders pay tax based on their personal tax position.
Unit Trust Structure
- A Unit Trust Deed appoints a new company as trustee to do the Project, and a Unitholder’s Deed (similar to a Shareholder’s agreement) is signed by all Unitholders.
- No changes can be made without the agreement of all Unitholders – each Unitholder’s percentage is fixed and cannot change without the agreement of all Unitholders.
- The Unit Trust is serviced by the company trustee with Unitholders having shares in the same proportion as their Unitholdings.
- Each Unitholder has a right to appoint and remove a Director to the company trustee.
Project Structure
- MPG negotiates Project Development Agreements (PDA) with Land owners rather than an outright purchase of the Project Land.
- A PDA is an agreement under which the land stays in the name of the Owner but gives full control of the development to the investment vehicle.
- The investment vehicle develops the Project Land under a management agreement with MPG and sells the completed land allotments on behalf of the Owner.
- Subject to negotiation, there may be an opportunity for a nominee of an investor to be employed by the investment vehicle on a full or part time basis.
PDA Benefits
This structure provides several key benefits:
- Significantly less capital required;
- Land is used as security to fund the Project;
- No acquisition fees such as legal or stamp duty (a transfer tax of up to 5.5% of the purchase price of land); and
- Dramatically reduces Government taxes such as land tax and council rates based on the increased land value resulting from rezoning.
Comparison Chart
Project Funding
The Project is funded by:
- Land Owner
- Investors
- Bank
Land Owner Funding
MPG negotiates a PDA with the Land Owner under which a “purchase price” (Minimum Return) is agreed at bank valuation or below. The Minimum Return is an “all up” sum which is interest free
- The Owner is paid part of the Minimum Return “up front” on signing the PDA;
- The remainder of the Minimum Return is paid from Lot sales on completion of the Project.
Investor Funding
Investors lend funds to the investment vehicle:
- To make the initial upfront payment to the Land Owner;
- To meet Australian Bank Funding Equity requirements; and
- Pay “soft” Project costs not covered by Bank funding.
Investor Loan Terms:
- 10% interest accruing and paid on completion of the Project; and
- Initially secured by a 1st Mortgage over the Project Land becoming a 2nd Mortgage after bank funding is obtained.
Bank Funding
- MPG arranges Bank finance to complete the Project at the
best available Australian Bank Rates. - The Bank will take a 1st Mortgage to secure it’s loans.
Follow us