AVOIDING A BAD INVESTMENT lemon-16374270.png

We largely protect you from the chance of a bad property investment in two distinct ways.

  1. THE CONTRACT ITSELF: We sell you property(s) on an investment basis. The price you pay is therefore calculated according to what the properties actually earn NOT what they might earn. For example if the net income for the property(s) is $75,000 and we have agreed on a 15% ROI, your purchase price will be $500,000 - Request the detailed cash flow statements for our properties using the form below.

    Purchasing an 'investment basis' will spare you the often risky and time consuming process of local market research, cross-checking related market values, estimating typical rents, taxes, management, insurances, bank loan repayments (assuming you qualify) etc to eventually calculate the possible return on your investment. (ROI)

  2. BANK LOAN PROTECTION: We arrange a non-recourse* US bank loan for 70-80% of the property(s) purchase price and by protecting themselves, the bank largely protects all of us against the possibility of paying too much or buying bad property(s).                   *non-recourse means no personal guarantees


    How our US bank loans protect you:  

    Property Value Guarantee: Loans are only offered in accordance with the banks own independent valuations. This avoids the possibility of sales based on inflated property values.

    Good Area & Economic Outlook Guarantee: The banks have sophisticated cross-checks for economic data within a given area and cities. Loans are therefore only given for property(s) that have a strong economic outlook with a stable/growing employment and population.

    Building Code & Occupancy Guarantee: All loans are conditional upon buildings and building work meeting all relevant building codes and passing all inspections. All buildings require a CO (certificate of occupancy) to be issued by the City. Without a CO there cannot be any tenants and unless the building is 90-100% tenanted, the bank won't close the loan. Therefore having a loan in place signifies 90-100% occupancy, CO's have been obtained and building codes have been complied with.

    DSCR & Property(s) Income Guarantee: The bank requires a DSCR (debt service coverage ratio) of at least 1.25 or better before placing the loan. This ensures that   a) the properties really are earning money and   b) there is plenty of free board to cover loan costs with actual income.

    Property Manager Background Check: The bank will perform a very thorough background check on the Property Managers before loan approval is given. In addition to looking carefully at their money handling protocols, they will run a criminal background check on all personnel who have access to the money. This significantly lessens the chance that the property management company will steal from you via fraudulent claims for vacancy and/or maintenance repairs which occurs more than it should.

    Clear Property Title & Ownership Guarantee: The bank use their own title attorneys to ensure the properties have clear title but just to be sure, they also require we take out title insurance to further guarantee clear title and ownership of the properties.
     

    Finally, here's a curiosity for you to think about

    If you were offered two similar property investments to choose from, the first offering a 15% ROI and the second 20% which would normally be the safer investment?

    Higher returns normally mean higher risk, right?

    Surprisingly, our properties are mostly the other way round, meaning if we offer you a 20% ROI's it's arguably a safer investment than a 15%.

    And this is because the 20% ROI is based on a lower interest loan from our bank/lender and (as you know),banks use the interest rates to price their perceived investment risk.

DISCLAIMERS & QUALIFICATIONSdisclaimer-24173069_m.png

Due Diligence:- Nothing within this document constitutes legal, tax, or financial advice. Prospective Investors should seek their own professional advice on the consequences of investing. No representation is made that any further information will be given, other than is required by law. Furthermore, the information contained within this document is not comprehensive and is selective. This information and/or further documents we provide do not contain all the information that a prospective Investor may require to evaluate a decision to invest and the risks associated with that investment. In making a decision to invest, prospective Investors must rely on their own examination of the information contained within this document as well as all other information as they may consider relevant.

NZ Securities Laws:- The investment products described within this document do not constitute an offer of securities to the public or an advertisement for any such public offer in New Zealand nor in any other country.
Before the company (Estero LLC) can accept your application it must be satisfied that you are an ‘eligible investor' and/or 'eligible person' as defined by the Financial Markets Conduct Act 2013. 

US Securities Laws:- The investment products described within this document do not constitute an offer of securities to the public or an advertisement for any such public offer in the United States nor in any other country.
Before the company (Estero LLC) can accept your application it must be satisfied that you are an ‘accredited investor’ in terms of the United States Securities Act of 1933 defined by ‘Rule 501’ of regulation D.

Bank Approval:- Whilst the loans we put in place are ‘assumable’, the bank nevertheless needs to approve our investors (ie being the person who will assume the loan). We therefore cannot finalize or enter a formal Investment Agreement with an investor until we are confident they will be loan approved.