Real Estate Investments
Targeting up and coming areas can create more profits and stable markets than staying or investing in Vancouver for more money. Some areas are great retirement destinations or better commute options like Squamish for North Vancouver Residents.
Presale developments: How do you get one?
Why was it that the only way to do it was to go the traditional pre-sale development route. Where the developer requires you to put down 5% to 20% of the purchase price down, they hold onto your money until the construction project is completed, (in some cases this could be up to 4 years) making interest on your money, while you make virtually nothing on your money?
Here at Evest we want make home ownership more accessible and worked out a model where an investors money could be placed into a project, make healthy returns and then at the time of completion use these funds towards the purchase.
We caucused with our lawyers as we knew that people do not want to be at risk with construction loans and created process where people could invest their dollars, make interest but not be at risk for liability on construction loans. Investors can make a healthy profit along the way with 50/50% profit sharing with the developer, our lawyers called it a limited Partnership with the sole risk being the funds deposited. Knowing our numbers gives comfort for people to invest. The security is in the land and the developer wants to make a profit.
“We hit it out of the park!!”, Evest Management said this week, “over the last 12 months we have been working on our signature project in Kelowna. It’s a 120 unit townhouse project where prices are going way up.
The Model at Work
The Promontory, Uptown Kelowna Townhome Development Project
The Promontory is a site in Uptown Kelowna with now an issued development permit for 120 townhouse/stacked townhouses adjacent the prestigious High Pointe neighbourhood facing Knox Mountain Park, (6.5 km from Kelowna City Beach). After working through all of the numbers and vetting them we decided on a townhomes showcasing a sleek modern design 500-1500 sq. ft. at an entry level price – $299 to $468K.
Home Ownership Can Be a Reality
We huddled with our accountants, costing and market experts and settled on a model where an investor could became a Limited Partner (LP) with $25k. When legally able we would give the opportunity to buy a unit with a 5% discount off of the listing price, and investors would have first option to buy.
Investors who decided to purchase and move into a townhouse upon project completion can receive a potential 5% discount off the price on a first come first serve basis. A savings of $14,950 on the low end $299K units and $23,400 on the high end $468K units.
Here is a hypothetical Investor/Home Buyer Scenario:
$100,000 investment = projected Rate of Return (RRI) of 29% per annum*
(12% preferred & 50% Profit Share)
Interest: $29,000 per year for 2 years (completion of development)
$100,000 + $58,000 interest + $23,400 discount = $81,400 you can use towards your townhome
Maximizing your RRSP Returns
Investors can use their RRSP or TFSA funds to invest, and if they moved in their gain could be tax free if planning to be a principal residence, but investors need to chat with their accountants about converting their RRSP’s into the project. Young buyers may be able to use a first time home buyers process for RRSPs. Profit for RRSP’s can be kept in RRSPs with no tax implications, but taking the profit out should be discussed with private tax consultants.
Offering to the Public
At Evest Funds we give investors comfort by adding additional protection through way of Exempt Market Dealer. “EMDs” are regulated by the Securities Commission and are responsible to inform and present such offerings to the public. Their mandate is an investor disclosure and ensuring that they are protected. Smart idea and an important value add for our investors.
Instead of presales, our Kelowna project is using this investor model. We began 4 months ago and have completed half our raise.
We have had so much interest in this new model that we are negotiating other great smart locations for upcoming products!
Please visit https://investinkelowna.com/ for more information on the Promontory real estate development project.
For added investor protection Capital Street Group Investment Services Inc. is our exclusive Exempt Market Dealer. https://www.capitalstreetgroup.com/
*This disclosure contains forward-looking information that is not complete and complete forward-looking information is included in the Issuer’s current offering memorandum. The forward-looking information are management’s projections based on project planning and analysis using industry accepted assumptions and analysis techniques for the real estate market for the markets we operate in and the project area in particular. While management believes its assumptions and analysis are valid and reasonable, actual results may vary from the forward-looking information and there are a number of inherent risk factors, such as variability in real estate pricing, prices for construction materials, and government policy that could have a negative impact on the Issuers and could cause actual results to differ materially from the forward-looking information. The Issuers undertake no responsibility to update their forward-looking information. The reader is directed to the Issuer’s current offering memorandum for a more full consideration of the risks, assumptions and forward-looking information.