Oyster Funds

[sidinz]

Anyone have any experience with this crowd or know anything more than is in the article?

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11602002

[Bob Kane]

I wish they would stop sending me invitations to purchase interests in their latest offerings.

[Wayne]

I wish they would stop sending me invitations to purchase interests in their latest offerings.

The email should have an 'opt out' at the bottom.

[Bob Kane]

*sigh*
They mail me - glossy in an envelope which arrives in my letterbox.
Rather quaint and old fashioned.

[Wayne]

*sigh*
They mail me - glossy in an envelope which arrives in my letterbox.
Rather quaint and old fashioned.

I always collect the mail via the garage.
On the way back in this sort of stuff (and all the advertising rubbish) goes straight into the paper recycling bag.

[Beano]

Anyone have any comments about Cider 4 Williamson Ave Ponsonby Auckland

[Bobsyouruncle]

Expensive.

[Beano]

Expensive.

I thought 6.7pc was a good yield in ponsonby

[Bobsyouruncle]

Yield is only 1 factor it's the value they put on the development that is concerning. Your million dollars could do much better elsewhere. Good for truly passive investors maybe.

[PC]

What sort of oysters do you get for $1m?
Pacific? Bluff?
Yum num num.

[Wayne]

Bluff of course - only the best for $1m

[deepu]

more on this here http://www.interest.co.nz/property/8...least-7?page=1

agree with alot of what has been said, but every time I look at these syndicates I can't help but think they are too good to be true...
For instance they are all generally 50% lvr, the 50% loan is generally interest only,the rent is usually high enough to cover the interest,the mgmt fees,and the rest goes as monthly distributions to the investors.this part I don't mind. It's the initial or setup fee that gets me!


some other thoughts:
-alot of the funds are existing, but there should be some charge for the new fund setup, in this case its around 7%, so for every $1 you put in you are $0.07 down already. Although they do mention that this will be spread over 5 years, so it might be less. As they plan to grow the fund to 100 Mil, it will initially be 17 Mil. here they will need more investors to get it to that point, so that is not a certainty that the fees would be reduced.
-there is a performance fee but the fund has to be growing by >9%(including distributions) to come into affect, this seems fair enough
-the fund carries 0.5% of the fund so people can exit the fund. You would not want much demand for this else you might have to get in a queue, so this would be a liquidity issue. Also you can't cash out until June 2017, they call them redemptions.
- Oyster have 4000 investors on their database with 800 invested.
- there will be the option to reinvest as they plan to grow the fund going forward from 17 Mil to 100 Mil
- they mentioned somethiing about owning it outright so that would be no loans which would be great from my perspective, but not sure what he meant by that exactly.
- there is 9 properties initially(and its only a part share in as some of these properties are already in their own fund with investors e.g. cider house one is 6 Mil share, its worth 92 Mil). This 6 Mil, I believe, is the 6mil in equity oyster bought into cider house, when it was offered to investers and they are putting it in this fund. They say they know these properties well.
- the average walt across the 9 properties is 10 years
- its a PIE investment for tax purposes which is 28% v 33% for some

[Re@der]

I dont like the way that Oyster gets a capital gain.(Success fee) Capital gains are for investors, not managers who should be paid a fee for what they do. We assume that it will be successful or we wouldnt invest. I note no return of capital fee for unsuccessful investments