Who is Sterling First Projects?
Sterling First Projects (SFP) is the partner company of Rental Management Australia. SFP is responsible for securing new property investment opportunities for clients of the group. This includes house and land packages, additional dwellings, apartments etc.
Why is SFP offering this land opportunity?
To construct new houses, land suitable for constructing a new dwelling must be identified. As there is a shortage of available land in WA, SFP has decided to secure a number of suitable land plots. It is planned in due course to develop these into new housing units for the residential rental market.
What are the main features of the Rights?
Acquire Rights in multiples of $21,000
Refundable deposit of $1,000
Right relates to a right to acquire a residential land lot
The Residential Property Investment Trust (RPIT) may acquire the Right for $42,000 from the Investor by the payment of $42,000 in cash of which $21,000 is to be invested in units in the RPIT.
If the Residential Property Investment Trust does not purchase a lot, SFP has allocated 21,000 units into a reserve account, which will be transferred to the investor.
What is the Residential Property Investment Trust?
The Residential Property Investment Trust (RPIT) is a new investment trust that will buy property suitable for residential rental. This may include existing houses or new developments.
Why is the RPIT prepared to offer a 100% return on each Right?
The RPIT is only offering the 100% return to a limited number of people who acquire the Rights that allow the RPIT to secure the initial lots. . On average the total cost of buying a lot and building a house for the RPIT will be approximately $500,000. The $21,000 profit paid to the Rights holder represents only 4.2% of the total cost.
Why is the SWPR offer potentially for the RPIT units?
The Rights are being issued to assist in the establishment and initial stages of the RPIT by securing the lots it needs. If the RPIT acquires the lot instead of the Rights holder the RPIT will pay the Rights holder $41,000 in cash, of which $21,000 is to invested into RPIT units, so you can participate in the Trust you have helped to establish. Subject to the terms of the RPIT you will be able to redeem the $21,000 units six months after issue.
What happens to my investment if the RPIT is not established?
In this instance, investors will be offered the option of either:
i) Completing the purchase of the land for which they hold the Right; or
ii) Exchanging the Right for Units in the Rental Management Investment Trust (RMIT).
What is the Rental Management Investment Trust?
The Rental Management Investment Trust is an investment trust that holds income rights to property management agreements and has consistently paid a distribution yield of 9.25% pa since inception. The RMIT has applied for listing on the Australian Securities Exchange.