What is your average investment amount?
The current average investment across our developments is $50,000 per investor. The spread of investment amounts range from $5,000 to $1,000,000.
What is your minimum investment amount?
This is dependant on the investment you choose. Generally our projects have a $5,000 minimum, whereas the Development Income Fund has a $20,000 minimum.
What is your maximum investment amount?
The maximum investment in a particular development is determined by the maximum subscription amount. This information is available in each developments PDS Part 2.
Is your investment structure suitable for a SMSF (Self Managed Super Fund)?
Yes. The managed fund structure is appropriate for SMSF investors. SMSF investors should check that their deed allows this kind of investment.
The investment structure is an unlisted, registered managed investment scheme.
Can I invest in your development offers if I don’t have an SMSF?
Yes. The managed investment scheme structure allows investment from a variety of sources, including SMSFs, individuals, trusts, corporations, partnerships etc.
Do you set up Self Managed Super Funds?
No – we can provide a referral to several different service providers if requested.
Are your results and accounts audited?
Yes – the SMSF Property Fund, set up and maintained by Guardian Securities Ltd. is audited on an annual basis and the results published. You can find this information on our performance page.
What does a no debt model mean?
No Bank Debt means that we don’t borrow from banks.
This means that investors are first in line to receive the proceeds of a development as (via a custodian) they own the land and cash at bank (and build once complete). This decreases risk as no third party can come and demand they want their money back.
What if a development takes longer than you have indicated in your documentation?
Because we do not use bank debt in our developments, the opportunity for a lending party (a bank) to take the asset away from investors is eliminated.
Therefore the key risk for investors is time. The impact of the development taking longer is that any profit made by investors is spread over a longer period of time, and the annualised or internal rate of return is less.
Of course the key point is the reason for the extension of time. The following reasons are possible:
- The building has been delayed.
- The sales have been delayed.
Neither of these cases are welcome news for any investor. The impact of either case on investors will depend on the detail of the particular development. Under the managed fund structure, and without bank debt, there are two crucial factors involved in the delay scenario.
Firstly, the investors are empowered by the constitution of the fund to decide the direction the investment should go, and secondly the asset remains with the investors and cannot be taken away by a third party.
How do you prevent the development’s build cost from exceeding estimated budget and therefore reducing investor profits?
The agreement with our builders are based on a fixed price contract (for civil works and the build). Within this fixed price contract is a reasonable and fair margin allowing the builder to do an outstanding job. We review the cash flow and financial position of the builder on a weekly basis to prevent unwanted surprises.
All cost information is shared with investors, prior to the fund capital raising closing, via the feasibility and information website.
What happens if the builder goes broke?
If the builder goes broke or ceases work for an unforeseen reason, the Funds Manager (e.g. Guardian Securities Ltd) is empowered to appoint another builder to complete the development.
Are the investor profits calculated before or after the development manager’s fees?
Profit figures to the investor are calculated after all costs. All costs for the development are clearly indicated in Product Disclosure Statement (PDS) and a detailed breakdown of those costs is in the feasibility document provided to all investors. The profit returned to investors is net of all the costs of building and selling the development.
Once I invest how do I know what is going on with my money?
We develop a website page for each of our developments where we provide monthly updates to investors about the progress of their development.
Each financial year the Funds Manager provides audited account information and investment unit information necessary for investor tax preparations.
How do I invest?
The steps for investing in a particular development are very simple:
- You make an enquiry.
- We speak with you to make sure that what we provide an investment solution which you are after.
- We send you detailed information and answer any questions you might have.
- You make your decision to invest or not.
If you do decide to invest:
- We send you the links to the on-line Application Form (takes 5 minutes to complete)
- You send your investment money and provide ID to the Funds Manager
- You receive a receipt and Unit Certificate to confirm your investment details.
Can I invest in more than one development offer?
Yes. Many of our investors consider more than one development offer as a way of diversifying their investment portfolio.
How long have you been in business?
Our value stream in its current form has been in existence since 2014. Our team has decades of experience in building, civil works, development, asset sales and financial services. We are the first to offer no-bank-debt property investment in developments to retail investors.
It looks like most of your developments are in Queensland. Why?
We are based in Brisbane and are focused on doing profitable developments for our investors in a market and area we know well. At this time the Queensland market provides us with many opportunities. Should a development in other states present itself that is attractive and meets the criteria of our Opportunity Assessment Team we are ready to take action, but will make sure that we have clear access to local knowledge to ensure the decision is well informed. After all, our customers eventually decide if a developments gets off the ground or not by making the decision to invest.
Can you explain more about this Value Stream on your website?
In a typical scenario where multiple companies are building a development, parties involved have different interests and drivers. Although the companies in our value stream are separate entities (for licensing, legal and practical purposes), we work in the same office environment and focus on maximising cooperation and building in efficiency, which decreases waste and increases return to investors.
Do I need to have a Bare Trust set up before I can invest in an SMSF Property development?
No. To invest in the SMSF Property Fund, an SMSF does not need a Bare Trust. If an SMSF chooses to invest in one of the houses or townhouses built in a particular development, and if they borrow to make that purchase inside their SMSF, they will need a Bare Trust under current SIS regulations. We do not provide that service to our investors — investors would procure that service from their accountant, financial advisor or a licensed provider of their choice.
If the managed fund for a particular development does not fill, what happens to the money I have put in to the fund?
If in raising capital for a particular development we do not succeed in meeting the minimum subscription level indicated in the PDS, the investment money is returned to each investor plus the interest earned in the Custodian’s account.
If the minimum level of investment is reached and the option on the land is taken up, and then we fail to reach the maximum investment level indicated in the PDS, then the investors, who now own an asset (the land) must decide what is the most financially advantageous route to take. These options are outlined in the PDS and the constitution of the SMSF Property Fund.
Isn’t it better to include debt in your developments so that you can leverage the funds raised and make more money?
Yes….. if the development goes well! Leverage is a double edge sword. Using debt in a development allows investors to invest a smaller amount to create the same development, therefore increasing return on investment. In a strong and buoyant market, with stable build prices, predictable interest rates and no unforeseen circumstances, this structure can be very profitable for investors and developers alike.
However, this model takes the strong position of protecting investors capital above all else.
Our investors too are all very aware of the other side of the bank leverage coin. When markets experience downturns, when interest rates rise, when unforeseen events happen, many highly leveraged investments collapse, banks want their funds back and investors lose.
With our no bank debt structure, there is no guarantee that markets and conditions will not change, but there is a guarantee that no third party can take the assets away from investors.
If I invest $100,000 and projected profit is 24%, and all aspects such as time and end sale price of the asset perform as expected, what do I get at the end of the development?
$124,000 – this is net of all fees.
What is the tax treatment of the distribution of profits on units invested?
It is important that each investor researches their own advice regarding their unique tax position.
SMSF Property Fund
The funds are taxed as a public trading trust and therefore pay unfranked returns. Most of our customers invest via an SMSF so this structure makes the investment quite attractive.
For you or your tax advisor to understand this in more detail go HERE
The Guardian Investment Fund – Development Income Fund Class of Interests
The aim of the Development Income Fund (DIF) Class of Interests is to provide Investors with regular unfranked distributions at a Target Floating Rate of Return.
For you or your tax advisor to understand this in more detail go HERE
How does SMSF Property Capital make money?
We make our money through fee for service. In our value stream each of the companies involved makes a profit based on the service they provide. These fees are all clearly outlined in the Product Disclosure Statement and in detail in the feasibility documents provided to investors as a part of their due diligence.
These fees are all clearly outlined in the Product Disclosure Statement for each development and in detail in the feasibility documents provided to investors as part of their due diligence.
Why do you provide monthly video updates?
Many of our investors have told us that they are tired of the only communication coming to them about their investments coming in the form of a glossy document once or perhaps twice a year using language and financial data that seems designed to confuse. We work to do the opposite, providing frequent, straight forward communication.
Why is transparency a significant part of your model?
We have designed an investment model with separate companies working closely together to maximise cooperation and improve efficiency. We work across the whole landscape of a development, starting with finding the development, completing due diligence, raising the capital, provide the development management and design services, building the development and selling the final products. The only way that investors can build confidence in the relationships between these companies is through transparency.
What is an FSG (Financial Services Guide)?
A financial services guide explains information about the company providing the financial services (e.g. SMSF Property Capital). It will explain the offers, fees charged and how the company providing the services will deal with other companies.
Has SMSF Property Capital ever been fined by ASIC?
In 2013 SMSF Property Capital recieved a $10,200 fine from ASIC for non-compliant advertising.
This was in relation to advertising in which stated we were “ASIC Approved”. As soon as we were made aware of this non-compliant advertising by ASIC we took steps immediatley to remove this. We are very sorry this incident occured and it was not our intention to mislead any prospective investors.
We would like to ensure it is made clear we are not, and have never been approved by ASIC. The investments reffered to in the advertising were merely registered with ASIC, but this does not consistent an approval by ASIC.
Since this incident we have taken many steps to ensure we maintain compliance with all ASIC regulations frequently undertake further compliance audits with our Funds Managers to ensure this does not happen again.
You are able to view a news article on the matter HERE.