Page 1

INVESTMENT PROPERTY DISCLOSURE STATEMENT (PART A)

CONCEPT PLAN FOR

Lots 42 Pumicestone Park Estate, Caboolture QLD, Australia, 4510

ABN: 57 078 963 336


TABLE OF CONTENTS PART A a. Introduction

0

- Compliant Investment Properties - Richardson and Wrench Investment Properties Australia 1. Preamble

3

2. Information Contained in this IPDS

4

3. Characteristics

4

4. Benefits

6

5. Fees

11

6. Risks

13

7. Authorisation of Statement

17

PART B 9. Supporting Documentation -

Annexure A Annexure B Annexure C Annexure D Annexure E Annexure F Annexure G Annexure H Annexure I

Property Photos Site Plan Floor Plan Schedule of Finishes Valuation Capital Gains Rental Income Depreciation Schedules and Estimates Miscellaneous Additional location photos

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18 20 22 24 26 30 31 32 36 39


1. Preamble The objective of the Compliant Investment Properties Disclosure Statement (IPDS) is to provide its clients with sufficient information at the point of investment to make informed decisions in relation to the acquisition of their investment in a way that enables them to compare a range of products1. The Complaint Investment Properties’ IPDS is a document based upon ASIC’s recommendations for the content of a Product Disclosure Statement (PDS). The Document is not an ASIC approved document and in no way purports to be. A PDS is a means by which the disclosure requirements of the Corporations Act 2001 can be put into effect. The Complaint Investment Properties’ IPDS is an application of the approach required by the Corporations Act to investment property even though such an investment falls beyond the strict definition of a financial product. The reasons for this include: Many of the principles of investment are the same for investment property and financial products. Advice made with respect to investment property may influence a client’s decisions with respect to other classes of investments. As a result, clients might: o Forego investments in other classes of investments to take up investment properties. o Sell other classes of investments to take up investment properties. o Acquire other classes of investments rather than investment properties. o Sell investment properties in order to acquire other classes of investment. The Complaint Investment Properties’ IPDS and the process by which it is delivered to its clients are based on six “Good Disclosure Principles”. These may be found in ASIC’s policy Statement 168 (PS 168). They are: Disclosure should be timely. Disclosure should be relevant and complete. Disclosure should promote product understanding. Disclosure should promote comparison. Disclosure should highlight important information. Disclosure should have regard to consumer’s needs.

1

This reflects approach developed by ASIC to achieve the broad objective of consumer protection contained in the Corporations Act 2001, and in particular as interpreted by paragraph 14.28 of the Explanatory Memorandum to the Financial Services Reform Bill 2001.

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 3


2. Information Contained in this IPDS As a result of reading this IPDS the clients of Compliant Investment Properties will be able to explain: • Characteristics of this investment property. • Benefits of this investment property; and • Fees payable in respect of this investment property; • Risks associated with this investment property;

3. Characteristics “An Off The Plan” Duplex House and Land Package Purchase Price

$595,000

Lot No.

Lot Size (sq/m)

Home Design

External Treatment

Home Size (sq/m)

Land Price

House Cost (incl. Site Costs)

Package Price

24

679

Duplex

Standard

340.00

$260,000

$366,180

$626,180

65

748

Duplex

Standard

296.60

$260,000

$335,000

$595,000

80

633

Duplex

Standard

301.30

$260,000

$339,565

$599,565

3.1 Address Lot ##, Pumicestone Park Estate, Caboolture 4510 QLD 3.1.1 Title details Title: Freehold Further information regarding title references are on the contract of sale and is available on request. 3.1.2 Zoning Zoned Residential Further details of permitted usage under this zoning and proof of zoning are included in the contract for sale and available on request. 3.1.3 Property details –

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This Duplex House and Land Package includes 6 bedrooms, 4 bathrooms, 2 car auto garage. House size’s on average are 300sqm on land blocks ranging from 600 sqm to 700 sqm blocks of land.

3.1.4 Construction details Construction details are attached – Construction details indicate a detached brick and tile house. 3.1.5 Dimensions LAND The dimensions for the Land is as follows: Total size: 708 sqm. HOUSE The dimensions for the Home are as follows: Approximate Floor Areas Average Internal Area External

297 m2

Sub-Total

297 m2

Total

297 m2

Approximate Total floor area size: 297 sqm. 3.1.6 Age The House is yet to be constructed and as such, will be brand new. Construction is expected to be completed within 16 – 26 weeks of settlement of land. 3.1.7 Special features This property is planned to have the following special features: Medium sized duplex home containing 6 bedrooms, 4 bathrooms. Dining and family rooms. Double Lock up Garage with auto opener to single panel door. It also includes built-in wardrobes. The kitchen is equipped with stainless steel appliances cook-top, oven, and rangehood. Covered alfresco patio, safety screens to doors and windows, Split system Air-con and quality ceramic tiles and carpet. The homes are designed for Investors to gain maximum return and have minimal maintenance.

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4. Benefits – Recent Sales

Street

Suburb

Bed

Bath Car Date Sold Price

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1

11 McKavanagh Street

CABOOLTURE

4

2

2

21-Jul2010

$412,500

2

10 21 Mortimer Street

CABOOLTURE

2

1

1

21-Jul2010

$170,000

3

134 Elof

CABOOLTURE

4

2

0

16-Jul2010

$415,000

4

8 Broadway Ct

CABOOLTURE

4

2

2

14-Jul2010

$325,000

5

152-160 Old Gympie Rd

CABOOLTURE

4

3

2

2-Jul-2010 $500,000

6

152-160 Old Gympie Road

CABOOLTURE

4

3

2

2-Jul-2010 $500,000

7

10 Connor Crescent

CABOOLTURE

4

2

2

28-Jun2010

$318,000

8

8 3-May Mary Street

CABOOLTURE

2

2

1

28-Jun2010

$289,000

9

22 Christine Street

CABOOLTURE

3

1

2

18-Jun2010

$269,900

5 Canon Court

CABOOLTURE

4

2

2

15-Jun2010

$450,000

10

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 7


4.1 Valuation – Single Side Duplex $325,000

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4.2 Capital gains related 4.2.1 Past performance of area. The tables below reflects capital growth movements for units in the property’s postcode.

Caboolture

Caboolture Area

period

% Change

% Change

2010 2009 2008 2007 2006

3.9% 0.0% 8.8% 20.5% 3.7%

6.5% −0.7% 8.0% 14.6% 2.1%

Source: RP Data

(Refer to Annexure F)

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 9


4.2.2 Amenity and environment Location Brisbane CBD Centre Gold Coast – (Surfers Paradise) Bruce Hwy Maroochydore Bribie Island

54 km South 133 km South <1 km West 54kms North 30kms East

Schools and University Schools < 3kms University (QUT) < 2kms TAFE < 2kms 1. The Caboolture campus is located on the corner of Manley Street and Tallon Street, Caboolture Child Care Centre Various Centres

1 – 6kms

Shopping Centre (2 Centres)

1 - 3 km

Public Transport Train Station

<3 km

Medical Hospital – Mckean Street Caboolture Local Doctors Chemist

<5 km 3 km 3 km

Recreation Brisbane CBD Parks Sports Clubs Social Clubs Community Centre

54 km 1 km 3 km 2.5 km 2.5 km

Local Infrastructure Restaurants(16) Movies Fast food Police station Fire Station North Harbour Business Park

4 km 8 km 1 km 3 km 3 kms 6 kms

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 10


4.2.3 Income related Estimated rental income: $640 per week. (Refer to Annexure G)

4.2.4 Taxation related Preliminary Tax Depreciation Schedule. Building Write â&#x20AC;&#x201C; Off Allowance Plant & Equipment Total

$270,000 (To be confirmed) $ 35000 (To be confirmed) $

(To be confirmed)

(Refer to Annexure H)

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5. Fees Investment Property Disclosure Statement Fees Disclosure Table 1 Purchasing Fees This table shows fees that you may be charged in the purchase of this property. Unlike financial products, no such fees may be deducted from your account balance or from the returns on your investment. You should read all of the information about fees and charges, as it is important to understand their impact on your investment .

Purchasing fees, Amount, How & when paid Purchasing Fees

Amount

How and When Paid

Establishment fee: This is the fee to set up your account in a fund. Contribution fee: This is the fee for the initial and every subsequent investment you make to a fund (or that may be made on your behalf, eg by an employer). Withdrawal fee: This is the fee charged for each withdrawal you make from a fund (including any instalment payments and your final payment). Termination fee: This is the fee when you close your account with the fund. Ongoing fees: This is the total of all ongoing administration, investment management, expense recovery and other fees charged by a fund. Investment property, does however have ongoing costs, these are detailed in the following table. Switching fee: This is the fee charged when you switch between investment options offered by a fund. Adviser service fee: This is the fee charged by your adviser for advice about your investment(s). (An adviser may also receive other amounts as commission: this is disclosed in the Statement of Advice that should accompany this disclosure statement.) Stamp Duty This is a tax levied by State Governments on Real Estate transactions. Conveyancing Costs These are the charges that the professionals who arrange for the complex processes involved in the change of title involved in Real Estate transactions.

Depreciation Schedule Cost This is the cost of a schedule constructed by a quantity surveyor to enable depreciation claims to be made against tax according to Australian Tax Office guidelines.

Not applicable to Real Estate investment

Adviser service fees vary according to the level of service.

$11,000 Estimate Only $1,500 Estimate only

For time of payment refer to your conveyancer. Conveyancing costs vary according to the level of service. Refer to your conveyancer.

Payment upon ordering report.. $700

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Investment Property Disclosure Statement Fees Disclosure Table 2 Breakdown of Ongoing Costs This table contains a breakdown of the ongoing costs involved in holding an investment property. These fees are additional to those involved in purchasing the property. Purchasing Fees

Amount

How and When Paid

Administration fee: This is the fee to cover the general administration of the fund. Investment management fee: This is the fee for managing the fund’s investments. (The amount you pay for specific investment options is shown in [insert cross reference].) Issuer fee: This is the fee for the product issuer's services in overseeing the fund’s operations and/or for providing access to the fund's investment options.

Not applicable to Real Estate investment

Expense recoveries: This is an estimate of the out-of-pocket expenses the trustee is entitled to recover from the fund. Member fee: This is a member account keeping fee charged by the fund. Strata Fees These are fees charged by the Body Corporate of properties held under Strata Title. Owners are obliged to pay them. Such fees are set by a Body Corporate elected by the owners of each development.

Property Management Fees These are fees charged by real estate property managers to managed tenanting and rent collection. Such fees are negotiated between the owner and real estate management services. Water Rates These are charges related to water usage on the property. Sometimes collected by local councils, they are generally related to water usage. Council Rates These are taxes charges variously set by local councils. They are generally related to the value of the property. Land Tax These are taxes generally set by the State Government. They are related to the value of the property.

N/A Indicative Only

7.0% (plus GST) Average Industry Range 5-12%

Generally deducted from rental payments. Can vary from State to State.

A$100 per annum Indicative Only

Quarterly, Service and Usage charges differ from State to State. Indicative Only

A$1200 per annum Indicative Only

Generally Quarterly Determined by council policy

Not applicable

Not applicable

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6. Risks All investing involves risk. No assurances can, therefore, be given by advisers, agents or any other person about Future profitability, Receipt of returns, Capital gains. This investment, like all investments is subject to a number of risks that could have a materially adverse impact on its performance. Some of these risks may be beyond the control of any agent, adviser, investor or any other person involved. Prudent investing therefore requires that those risks that can be reduced are managed in an appropriate and prudent manner. The following information highlights some of the risks that potential investors should consider prior to making an investment. Investors must seek their own professional advice in relation to the risks and must make their own assessment. 6.1 Market Risk The performance of any investment property will be influenced by the general condition of the Australian economy and its investment and property markets. Both of these factors are cyclical and subject to change. 6.1.1 Property value movement Property value movement risk relates to the risk of the property failing to achieve growth expectations or declining in value. Investors should note that properties in Australian regional centres have gone through rise and fall cycles over an underlying increasing trend. These follow a pattern generally known as the property cycle. The property value movement recorded here is therefore subject to this cycle. Investors should therefore expect this movement to change in the short to medium term. The following table summarises median prices of both new and existing homes located in that postcode from July 2009 to June 2010.

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6.1.2 Tenancy demand Tenancy demand risk relates to the risk of the property failing to attract tenants at the rental rate factored into the income related benefits of the property. 6.2 National and Global Events Risk Wars, civil insurrections and other major unforseen events beyond the control of the Company could also have an effect on the operations of the Company. Sometime events such as these increase the likely performance of an asset at other times they impair performance. 6.3 Legislation Risk Changes in State or Federal legislation or policies may affect the returns to investors. 6.4 Government Risk Value determining policies such as zonings and the location of infrastructure such as roads, schools and shopping centres may be made and changed by the various levels of government or affected by some other government or semi-government department or authority. 6.5 Development Risk This applies to properties purchased before completion or off the plan properties. Throughout such projects the developing company may arrange finance facilities related to the land acquisition, and development of the project. Unforeseen circumstances may arise where successful completion of the development may not be possible upon the terms outlined in their forecasts. This may prevent the successful completion of the project. Purchasers may, therefore lose their deposits.

6.6 Building Risk

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Should, however, the builder become insolvent, liquidated or suspended, this could result in project becoming unable to settle or be occupied. This risk is managed by ensuring that the builder has appropriate insurance. In this case this risk is covered by Building Services Authority, Building Insurance, that all builders in Queensland are required to obtain prior to construction by law. 6.7 Warranty Risk Faults in construction may result in warranty claims. These risks are managed by the home warranty insurance taken out by the builder from Building Services Authority. Should, however, the insurer become insolvent, liquidated or suspended, this could result in the builder becoming unable to make good any deficiencies. 6.8 Estate Risks Estate risks rise from the way in which an asset is held. Estate risk issues impact greatly upon two main issues. These are taxation and inheritance. Three main considerations contribute to this area of risk. These relate to: • Whether or not the investor has a will. • What kind of tenancy will be involved if there is more than one owner (i.e. tenancy in common or joint tenancy)? • How will the assets be held (i.e. individual ownership, company or trust) Investors are therefore advised to seek professional advice in these areas before investing. 6.9 Title Risks Title risks relate to how freely title to a particular property can be gained. Encumbrances to title include caveats and covenants. Further details of encumbrances are included in the contract for sale and are available on request. 6.10 Tenant Risk Tenant risks relate to three things. These are: • The availability of tenants • The financial reliability of tenants • Care for the property by tenants Investors are therefore advised to take out appropriate insurances. 6.10.1 The Availability of Tenants An important part of the performance of any property investment will always relate to the rent that can be gained from tenants. Investors must therefore understand that the availability of tenants will depend upon demand. Factors that can affect tenant demand include matters dealt with under Tenancy Demand, Government Risk and Legislation Risk. 6.10.2 The Financial Reliability of Tenants Rentals depend not only upon the availability of tenants but also upon the financial reliability of the tenants. The risk in this area may not only involve loss of rental income. It may also involve legal costs involved with dispute and eviction processes. Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 16


Landlord Insurance should be considered. 6.10.3 Care for the Property by Tenants Tenants may damage a property beyond that which is normal wear and tear. Risk management in this area involves assessing the responsibility of tenants through such things as references before letting the property and inspections throughout the term of the lease. Landlord Insurance should be considered 6.11 Taxation Risks Many property investment strategies involve taxation related issues. Investors should be aware of the possibility of the performance of their investment being affected by changes in taxes such as income tax, capital gains tax and various property taxes such as land tax and rates. 6.12 Personal Risks Investment strategies often depend upon the income of the investor. This is particularly so whenever the investment is negatively geared. Such risk may be managed by taking out appropriate insurances. Such insurances include: • Life insurance • Trauma insurance • Income insurance 6.13 Property Risks Investors should be aware of the risk of loss of value to their investment arising from either of lack of maintenance or storm or other disaster. In the case of strata titles, ineffective body corporate may result in insufficient maintenance of the common areas of properties resulting in loss of value. The management of such risks involves the holding of storm and fire appropriate insurances and involvement in the body corporate by the investor or the investor’s delegate.

6.14 Public Liability Risk Investors should be aware that members of the public might be able to sue them for injuries received whilst on their properties. Management of this risk involves the taking out of appropriate public liability insurances.

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 17


7. Authorisation of Statement This is to certify that this Investment Property Disclosure Statement is a true, complete and accurate record of what was understood about this property at the time of signing.

Signature

Date

Print Name

Capacity

Address Postcode

Witness

Date

Print Name Address Postcode

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PART B SUPPORTING DOCUMENTATION Annexure A

Builders Product - Property Photos

Chara D

Chara G

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Annexure B

Site Plan

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Annexure C

Floor Plan

Artist Impression of 5 Bedroom floorplan

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Annexure D

Schedule of Finishes

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Annexure E

Valuation

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Annexure F

Capital Gains

Capital Growth in Median Prices Caboolture

Caboolture Area

period

% Change

% Change

2010 2009 2008 2007 2006

3.9% 0.0% 8.8% 20.5% 3.7%

6.5% â&#x2C6;&#x2019;0.7% 8.0% 14.6% 2.1%

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Recent median sale prices Caboolture

Caboolture Area

period

median price

median price

June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009

$ 335,000 $ 332,000 $ 325,000 $ 325,000 $ 309,000 $ 329,000 $ 316,000 $ 322,500 $ 340,000 $ 302,500 $ 320,000 $ 306,500

$ 395,000 $ 390,500 $ 372,500 $ 385,000 $ 380,000 $ 387,500 $ 370,000 $ 385,000 $ 375,000 $ 387,500 $ 367,750 $ 355,000

Annexure G

Rental Income

$300 per week per duplex side - $600 for dual side purchase.

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Annexure H

Depreciation, Schedules and Estimates

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Annexure I

Miscellaneous

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Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD ď Ź Page 40


- Additional location Maps and photos

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10Km Radius

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This Beach 14kms

Caboolture Train Station 3kms

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD ď Ź Page 44


Northeast Business Park – 6kms 13,600 new jobs

Investment Property Disclosure Statement for Lot ## Pumicestone Park Estate - Caboolture 4510 QLD  Page 45


Moreton Bay Regional Council Employment Centres

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Generic Assumption PIA for similar Duplex Single Side Purchase at $300,000 = $135 per week - Cash-flow positive from year 1

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Investment Property Disclosure Statement - Pumicestone NRAS Duplex  

The Investment Property Disclosure Statement for NRAS House & Land Packages in Caboolture Queensland Australia

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