Important Announcement from CEO Neil Lewis
Today I want to make an important announcement about the way we offer property deals to our members.
Our number one aim is always to hammer out the very best Below Market Price (BMV) with a developer. We then pass that on to our investors.
That will never change. That's our business model.
In return for that BMV price, of course, we charge investors a simple fee.
But we've noticed that in some markets - those that have perhaps become more sophisticated or where large developers are using sophisticated financing models - some developers are building margins into their costs and they expect to pay us a fee.
This can be the case even when the developer is also prepared to offer BMV! Often it's because they want simply to sell quickly and build momentum for the later phases of their development, rather than to maximise profits in those phases. That's the way their business model works.
Now, if we can negotiate the best below market value deals with these guys, we have an option to collect our fee from you our client or direct from the developer.
In some cases the deal stacks up best for you when we take a fee from our clients (as is typical when we have to re-negotiate onerous contracts or nasty payment terms in newly emerging markets) and in other cases the deal is the same whichever way we run it – except that if we take a fee from the developer, you – our client – can mortgage the cost of the fee as the fee is effectively built into the price of the property.
So, in future, we're going to look at each deal we negotiate and, depending on how the best BMV price can be achieved for our investors, we'll offer the deal in one of two ways.
We'll either collect our fee from you, the investor, in the usual way and take nothing from the developer, OR we'll collect a fee from the developer and charge you, the investor nothing!
The main advantage of the developer paying the fee - which will effectively be included in the overall price of a property - is that the investor can include the cost of the fee in their mortgage, therefore reducing the total amount you need to invest.
But here I want to stress something very important.
And it's this - we will NEVER negotiate a BMV price and turn it into a lousy price by simply slapping on a big developer fee and passing it on to you, as so many property investment companies do. This is my personal guarantee.
Here's the bottom line.
We are committed to securing the very best deals that are in the market. That won't change. But we need to recognise that there are an increasing number of different ways of cutting a deal and we want to be able to take advantage of that so that you, the investor, can take advantage of more options. Our commitment will be to always judge matters on a deal by deal basis in order to deliver best value to our clients.
I know our deals and our prices are the best in the business – by a heck of a long way!
So, I invite you always to judge our deals by the overall price relative to the market. Look at our comparables. Look at the independent valuations we always provide. These are the crucial factors. Let them do the talking. Then make your decision – once you've done your due diligence.
These are changing times, for sure, but one thing is clear – there are some fantastic property investment opportunities out there. And we don't intend to pass them up!
Cheers
Chief Executive Officer
Property Secrets
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