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Lion Property Group FAQs

Investment FAQs

When a client invests in a project, they receive shares in a controlling entity responsible for the purchase and development of the land: a Special Purpose Vehicle. The special purpose vehicle (also known as an SPV) is a registered proprietary limited company which is incorporated for the purpose of the property developments completion. The SPV functions as a legal entity which collectively represents all investors in a project. Investors also have voting rights in this Company, which for example can be exercised should the management agreement require major changes.

The Joint Venture agreement to undertake a project is between Lion Property Group and the Proprietary Limited Company.

The development site for the project is purchased by the Company which represents the investors, using investor capital. As the investors are shareholders, they are entitled to the assets of the Company to recoup their investment in the unlikely event of an insolvency or other failure. This means that investor capital is secured against the value of the development site itself. If the worst-case happens, investors can sell the site to get their capital back, or take another course of action, depending on what the shareholders vote to do.

While the land is collectively owned by the investors, they don’t want to be doing the work of actually undertaking the development. Which is why the Company appoints Lion Property Group as the Development Manager via the management agreement. This agreement also outlines the plan and overall intended process for the development, including the type and number of properties to be constructed.

As the Development Manager, Lion Property Group is responsible for completing the development on behalf of the Company and the investors. This involves, but is not limited to:

  • overseeing all administrative tasks required to complete the project;
  • appointing and collaborating with town planners, architects, land surveyors, and engineers to complete development plans;
  • submitting the plans to Council and obtaining all relevant approvals as required by the jurisdiction of the development site;
  • representing the investors at civil tribunals relating to the project, if required;
  • obtaining financing from a lender to fund construction;
  • selling the developed properties in-house, or appointing a realtor to assist with sales.

This investment structure is utilised because it ensures that investors are protected, but grants us the ability to undertake the development in a timely and efficient manner in line with investor expectations.

Each investment opportunity offers a different return to investors based on the feasibility study we have conducted for that project. Some projects feature contractually-fixed minimum returns, and some include delay compensation, providing investors with additional returns if the project runs over the listed investment term. Not all opportunities include these features, so carefully review each opportunity’s Information Memorandum and Investment Agreement to understand what is offered.

We accept any investment over $250,000. Smaller investments may be accepted at Management’s discretion based on availability within a project. The legal structure we use to undertake a project has a limit on the number of parties that may participate in the project, and so we may only accept a small number of investors who meet the capital requirements.

No. You are investing capital to fund a property development project and you receive returns upon completion. You do not receive ownership of any of the properties constructed in the project unless you choose to buy a property as a separate transaction. See ‘How are these investments structured?’ for more information.

Yes. Each project is an independent entity and is unrelated to any other projects currently being managed by Lion Property Group. Monies from one project are not used in other projects. You may invest in multiple investment opportunities depending on the amount of capital you have to invest and our current availability.

Yes. To ensure that your SMSF investment is compliant with ATO regulations, we recommend engaging the services of licensed professionals to assist if you have not already done so.

We provide our investors with regular updates on the progress of all projects via this website, direct email, and a private Facebook group.

Our investor community is a diverse group of Australian and international investors united by their need for a reliable investment model that provides them financial freedom and flexibility.

Security & Profitability FAQs

See ‘How are these investments structured?’

It depends. Some projects are simply not suitable to be sold off-the-plan, and so lenders will not require them. Other projects that involve a large of properties usually do, but ultimately it comes down to the individual lender and what their requirements are.

We endeavour to sell our projects off-the-plan anyway, prioritising those that require pre-sales for the lender to release finance.

All investments have an element of risk; for property development one of these risks is the possibility of the project being delayed. We cannot fully alleviate the possibility of a project running over schedule as some factors (such as Council approval and construction) are outside of our direct control.

However, this is where our experience and strategies for risk mitigation come into play. Our practical experience from managing nearly twenty property development projects has taught us realistic timeframes for each stage of the development process as well as likely obstacles that may arise. Outside of our own experience, we also utilise the services of trusted external experts such as town planners and construction managers to assist where required and provide realistic timeframes.

In the event that a project is delayed we may provide investors with additional returns as a form of delay compensation. See each offer for specific details.

We can never be certain that a project will be profitable; all investments have an element of risk. However, before proceeding with any development we conduct a thorough feasibility study to ensure that the site meets our criteria and standards. We also obtain advice and valuations during the design phase based on comparable property sales to ensure that our expected sales prices and subsequent calculations are realistic. We also add a contingency into the budget, typically 5% but varying based on the level of risk involved in the project, to ensure that it will be completed and sufficiently profitable.

Unlike a traditional buy-and-hold property investment strategy, our ability to achieve a profit as a property developer is not inherently tied to market performance; as long as the combined sales price of the developed properties is higher than the cost to build them, we still achieve a profit. There are a variety of factors other than final sales price that also influence how much profit a particular development will generate, such as the purchase price of the land, construction costs, and loan interest. This allows us to achieve a profit from the lucrative property market without being completely dependent on the performance of the market.

Are you eligible?

Some of our investment offers are restricted to investors who meet certain criteria. Please complete a quick eligibility test so we can offer you the appropriate investment options for your financial situation.

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