The Dubai Investment Coalition Planning Thread

[maximusprime]

Question:

Ok so now 20 people have bought a floor for example.
How would the next sales or cash in be handled. All investers are allowed to sell their part of the full floor at will or will this be regulated like e.g. the hold period will be discussed and mutually agreed case by case?

pyramid structure seems to be a good approach.

When the floor is purchased, we will make arrangements for the developer to sell it as individual units to the individual investors. Then each person is free to do what they want with their units. Cash is exchanged dirictly between the investor and the developer, the organisation will never handle money.

 

[AAPROP]

When the floor is purchased, we will make arrangements for the developer to sell it as individual units to the individual investors. Then each person is free to do what they want with their units. Cash is exchanged dirictly between the investor and the developer, the organisation will never handle money.

this sounds fair and will help maintain the investors' peace of mind. So when do we start guys??

 

[Design Architect]

Two stage concept

When the floor is purchased, we will make arrangements for the developer to sell it as individual units to the individual investors. Then each person is free to do what they want with their units. Cash is exchanged dirictly between the investor and the developer, the organisation will never handle money.

In my opinion - to try and combine difference between approaches, I came u with this one:

1 Level of investing - Investment groups acting as one, and buying off whole floors and buildings. We are offering to developer easiest way to sell without hassle

2 Level of investing - Same floors or building is offered to Community at discounted prices. This way, big investors get their share, and community still has better prices than market. We apply first-come-first-served bases for sea view and park view units

What do you think guys?

Reason - developer is not (in my opinion) going to sell to anyone if it too complicated. Market holds a LOT! of people and companies who will by whole buildings without hassle of coordinating 100 members.

 

[maximusprime]

In my opinion - to try and combine difference between approaches, I came u with this one:

1 Level of investing - Investment groups acting as one, and buying off whole floors and buildings. We are offering to developer easiest way to sell without hassle

2 Level of investing - Same floors or building is offered to Community at discounted prices. This way, big investors get their share, and community still has better prices than market. We apply first-come-first-served bases for sea view and park view units

What do you think guys?

Reason - developer is not (in my opinion) going to sell to anyone if it too complicated. Market holds a LOT! of people and companies who will by whole buildings without hassle of coordinating 100 members.

So are you saying the goup should pool the money, buy the floors, and "re-sell" the individual units to the members? Thats a possiblilty but it complicates things on our end iand introduces a new element of trust and liability. This would be something to discuss with a developer.

 

[Design Architect]

So are you saying the goup should pool the money, buy the floors, and "re-sell" the individual units to the members? Thats a possiblilty but it complicates things on our end iand introduces a new element of trust and liability. This would be something to discuss with a developer.

Basically, yes we are re-selling it to our members. As it may sound bad, it's not. And complications are avoided, because we can take our time and sell it slowly. To explain again:

1 LEVEL - Whom ever got the money - go as a group and buy floors or building. They act like one, and they bring their policies with them. They say for example - we are going to advertise this property for 100dhs more per sqft. We are going to sell individual units without 2% fee, and it's, again, going to be cheaper than market price. It's big investment and it's more risky. Returns are divided in equal parts, depending how much was initial investment.

2 LEVEL - Wider audience of members - can take their time and pick and choose whatever they like. It's going to be within community. It's going to be easy, and you can trust to people. Whoever comes first - snatches good views.

Max, I'm thinking out loud. No body is saying that this is best idea, but if you think it faulty somewhere, please give your comments, they are most welcome. We are here to come up with best idea.

Potential Problems with Community (as it is without 2 LEVELS)

- Are you going to have exact number of people who are willing to buy? Ever?
- What make you think that someone would rather sell something to 100 people than just 1???
- How is going to decide who picks first? If you come up in front of Developer and arguing start to who have first pick - what kind of image (of community) that going to create?

- From different perspective, you would need to go to developer and say "I have 1000 potential buyers" - what is he going to say???
- And if he agrees to 1000 buyers - and you have 400 of them back up, because it's not good for them, what should be the next step???

 

[maximusprime]

DA,
You are bringing up some very good points. The backing out problem it very real and could potentially mess everything up if the developer is expecting to sell 1000 and all of a sudden 400 change their minds. I think comming to the developer with a nice organized package sounds like a good idea and those who take the initial risk should be rewarded. We should talk to someone who works or has worked (sally) for a developer and see what they have to say about it.

 

[Design Architect]

Thing of it is - I don't have anything against community where everyone can buy something for them selves, and the developer is happy. But I think that it's too difficult to achieve that. We are talking about trust, and simply you can't trust 1000 people when they say something. Hell you can trust 100, or even 10 for that matter...

Community is a good place - for gathering like minded people and share information. Everything other than that, tend to be too complicated - as the number of involved parties is huge...

Again - we are talking and exchanging ideas - that's a positive side about community.

 

[sadiqnazir]

I think.....

I think that here we cant make up kind of pvt. ltd. company where all our investors become kind of shareholders in the company according to the money they are investing in or I think we can make it up project wise, Eg : if we require an investment of 100,000, we can include even ppl with 5,000 and they get their share once the property is sold. This can help out first time investors as well, if their are big players they can go for full floors and small investors can even start with single units where they will be able to gain first hand experience and earn some money as well.

 

[bluelight]

When the floor is purchased, we will make arrangements for the developer to sell it as individual units to the individual investors. Then each person is free to do what they want with their units. Cash is exchanged dirictly between the investor and the developer, the organisation will never handle money.

Clear and transparent approach.

 

[Roshan]

I think that here we cant make up kind of pvt. ltd. company where all our investors become kind of shareholders in the company according to the money they are investing in or I think we can make it up project wise, Eg : if we require an investment of 100,000, we can include even ppl with 5,000 and they get their share once the property is sold. This can help out first time investors as well, if their are big players they can go for full floors and small investors can even start with single units where they will be able to gain first hand experience and earn some money as well.

A company can be formed if a group of investors are investing on one particular investment.

For eg : If I invest in a 2000 sq ft office which will have only my name on the contract and for the balance 4 offices, we have 4 investors, each having 2000 sq ft office space in their names on the contract, why would I need to form a company. I have only my name on my investment and nobody else.

If I have 5 investors investing in say one of the above mentioned 2000 sq ft office, then yes, to protect each persons share and if those 5 investors want it, only those 5 need can form a company for that 2000 sq ft.

Small investors if they go for only 1 small part, they will not get the benifit of discount. The small investor will join hands with other like minded investors who are interested and will pose as a big investor to get the discount. Again, each investor will have his name on his contract and no one else's.

Still confused, get your members together and let's have a meeting. pm me when you are ready.

Regards

Roshan

 

[Roshan]

When the floor is purchased, we will make arrangements for the developer to sell it as individual units to the individual investors. Then each person is free to do what they want with their units. Cash is exchanged dirictly between the investor and the developer, the organisation will never handle money.

Bang on Max, This is the concept which we need to understand and get across.

Roshan

 

[Roshan]

In my opinion - to try and combine difference between approaches, I came u with this one:

1 Level of investing - Investment groups acting as one, and buying off whole floors and buildings. We are offering to developer easiest way to sell without hassle

2 Level of investing - Same floors or building is offered to Community at discounted prices. This way, big investors get their share, and community still has better prices than market. We apply first-come-first-served bases for sea view and park view units

What do you think guys?

Reason - developer is not (in my opinion) going to sell to anyone if it too complicated. Market holds a LOT! of people and companies who will by whole buildings without hassle of coordinating 100 members.

Reply to point 1 : If the community develops to a large congregation of members, then we have th power to twist hands with the developer. The members are free to adapt which way they want to invest. They could either opt for a part of the floor in their name - OR - could even decide to pool in with 5 more people for that particular part of the floor.

Reply to point 2 : Oh yes, it is going to be on first come first served basis. Just like how when we go to a developer and rush for those best spots.

Regards

Roshan

 

[Roshan]

Hi Roshan,
This idea sounds great to me.
I wish I was rich enough to become a community member as an investor.
Still I will do whatever I could, being a part of escrow for this financial institute, to help this community.

I can introduce this community to my existing t and new developers and can inform you about the new projects coming up in the market. We are not getting very big projects but still reasonably good projects. We were asked for a 3 billion project recently but we lost it just because we didnt have a strong Brand name. Anyway stay in touch as a community and hopfully things will work out for you guys.

Best of Luck.

Regards
Escrow Officer

I would love to join hands with you on the advising team so that we can help others to invest. I have made enough of investments on my own and have to see to the end of it. The community is not only about investing, it's also important to share and help the members

Hope the other members are reading this. As you mentioned, you can inform us in advance what is coming into the market and we can prepare much in advance. Now, don't you think with a 6 month notice on what's coming into the market, we can plan much in advance and prepare our resources for a pre pre pre launch

Get the concept guys, we get information much in advance by having people like " Escrow officer " in the community. Just like this we will have other brokers, mortgage advisors, agents, developers on the team... and it works out to be a win win situation for everyone.

Regards

Roshan

 

[Roshan]

Basically, yes we are re-selling it to our members. As it may sound bad, it's not. And complications are avoided, because we can take our time and sell it slowly. To explain again:

1 LEVEL - Whom ever got the money - go as a group and buy floors or building. They act like one, and they bring their policies with them. They say for example - we are going to advertise this property for 100dhs more per sqft. We are going to sell individual units without 2% fee, and it's, again, going to be cheaper than market price. It's big investment and it's more risky. Returns are divided in equal parts, depending how much was initial investment.

2 LEVEL - Wider audience of members - can take their time and pick and choose whatever they like. It's going to be within community. It's going to be easy, and you can trust to people. Whoever comes first - snatches good views.

Max, I'm thinking out loud. No body is saying that this is best idea, but if you think it faulty somewhere, please give your comments, they are most welcome. We are here to come up with best idea.

Potential Problems with Community (as it is without 2 LEVELS)

- Are you going to have exact number of people who are willing to buy? Ever?
- What make you think that someone would rather sell something to 100 people than just 1???
- How is going to decide who picks first? If you come up in front of Developer and arguing start to who have first pick - what kind of image (of community) that going to create?

- From different perspective, you would need to go to developer and say "I have 1000 potential buyers" - what is he going to say???
- And if he agrees to 1000 buyers - and you have 400 of them back up, because it's not good for them, what should be the next step???

Stronger the community, better it is to negotiate the deal. Do you know how difficult it is for a developer to sell one floor. A floor could be as much as 15 to 20 million dirhams. We might be 10 investors who will have 10 different contracts but in the eyes of the developer, he has sold the full floor. The "Art of the deal" comes in the power of negotiations. You negotiate well, you can have the developer on your knees. We can negotiate a no transfer fee with the developer.

As time goes by, the market will correct, you will have distress sales, you will developers flocking to communities trying to meet 500 propspective customers at one point. Prepare for distress sales, because in the event of a distress sale, the seller / developer becomes motivated and he will come to your discounts and to your terms.

For all you know, the best deals are in distress sales and not at pre launches

Regards

Roshan

 

[Sally1980]

Reply to point 1 : If the community develops to a large congregation of members, then we have th power to twist hands with the developer. The members are free to adapt which way they want to invest. They could either opt for a part of the floor in their name - OR - could even decide to pool in with 5 more people for that particular part of the floor.

Reply to point 2 : Oh yes, it is going to be on first come first served basis. Just like how when we go to a developer and rush for those best spots.

Regards

Roshan

Regarding the second point. I can understand this concept when it come to the park/road/sea view, but what do we do with studio, 1BR, 2BR type of units. In general 2BR's are around 5% - 8% cheaper per square feet, 1BR's around 10% - 13% cheaper than studio's and also the ease of selling eacht type differs significantly... Suppose we go there negotiate for floors, the members go their to buy but everybody wants only the studio's and nobody the 2 bedrooms...

One way to solve this would be to negotiate the floor price/sqft. with the developer, then agree with the same to set i.e. 1BR as the mediaan and charge 10% per sqft more for studio's and 10% per sqft. less for 2 bedrooms...

For the difference of unit type I think just a first come first served basis would be to rough and result in significant unbalanced profit between members...

This is just my idea, let me know what ya think...

 

[maximusprime]

What Design Architect is saying is that it may be better to present the developer with a nice, organised, concise offer and then work out the details among ourselves, which is a good point as it solves the problem of people backing out. The problem it presents is that it raises the price for the other members and also uses up the free transfer that we are trying to negotiate. Also, what incentive is there for them to sell the properties to the rest of the group instead of releasing them on the open market for a better price?

The alternative option that I propose is to:

1. learn what projects are comming up (from guys like escrow officer)
2. Set a date, and tell members who are interested to start freeing up funds.
3. Set goals for negotiation

When the date arrives:
we see how much cash we have to work with.
we find out what each member wants as far as bedrooms, payments etc. etc.
we AGREE on a goal. i.e. payment plans, price/sq foot, free transfers etc.
we sit down and talk with developers

If the negotiator acheives the goal, then the deal goes through. If not, then no deal. This way there are no surprises, each investor is reasonably assured of what he is going for. (and is much less likely to back out)

The big question in my mind is whether a developer will consider a bulk deal as a group of individual units (SALLY WHERE ARE YOU?). We need to ask a developer what he thinks of the plan. If he says "no way", then maybe design architects idea is the way to go.

I think incorporation should be necesary only for liability protection, other than that it deviates from the root of the idea. This is a collective of individuals, each person is in control of his/her own investment. With a corporation, you have a group fighting among themselves to direct a large pool that they are part of and they have no individual control.

 

[maximusprime]

As far as 1st come 1st served is concerned, to me it seems like the most natural approach, but it might exacerbate the backing out problem. When the last person in line sees that they are getting the road view on the lowest floor, they might back out, and it could jeoprdize the entire deal.

Maybe we go for half of what we think we can buy. We will make sure we have twice as many "troops" as we think we need. That way, when some inevitebly back out, we still have plenty of others who we know have made their cash available and are interested in that particular deal, who can take their place.

Some will obviously be left behind but there will always be more deals comming down the pipe.

 

[Design Architect]

The thing of it is, why I', skeptical:

For example - lets take 20 people, and meeting somewhere. We say to those 20 people to look for an options for meeting place and some drinks and food.

Most probably:

- 5 of them will find ball room in hotel with drinks included but no dinner
- 5 of them will find restaurant without drinks but food included
- 5 of them would go to pub
- 5 will back out

Thats 20 people with simple goal, and investment up to 200dhs. At the end they maybe all go to pub, but some of them are not satisfied with a deal, and won't be coming anymore.

Now, multiply number of people by 10, and raise money scale by 100 times. Put in equation a potential life saving investment. See what I mean...



Now, looking at that particular problem - maybe we could do the following in order to overcome problem:

1. Make a data base of potential buyers of Studios, 1 bed, 2 bed, and bigger units. We should come up with numbers such as 50, 30, 20, 10 for eg.

2. With those numbers - we need to present ourselves to developer and see if he's ready to sell his units in that manner - and if he's willing to nagotiate

3. If he is ready - then we can organize venue (prelunch for our comunity) where all 110 potential buyers will have their token numbers - and buy directly on first come first serve basis.....

Hmmm - for developer - it's no different than Pre Launch of any sort. Why would he do that??? Especially now, when market is hyped, and everything is sold...

Again open to comments

 

[Roshan]

Regarding the second point. I can understand this concept when it come to the park/road/sea view, but what do we do with studio, 1BR, 2BR type of units. In general 2BR's are around 5% - 8% cheaper per square feet, 1BR's around 10% - 13% cheaper than studio's and also the ease of selling eacht type differs significantly... Suppose we go there negotiate for floors, the members go their to buy but everybody wants only the studio's and nobody the 2 bedrooms...

One way to solve this would be to negotiate the floor price/sqft. with the developer, then agree with the same to set i.e. 1BR as the mediaan and charge 10% per sqft more for studio's and 10% per sqft. less for 2 bedrooms...

For the difference of unit type I think just a first come first served basis would be to rough and result in significant unbalanced profit between members...

This is just my idea, let me know what ya think...

If we cannot go horizontal, then we go vertical...

 

[Sally1980]

What Design Architect is saying is that it may be better to present the developer with a nice, organised, concise offer and then work out the details among ourselves, which is a good point as it solves the problem of people backing out. The problem it presents is that it raises the price for the other members and also uses up the free transfer that we are trying to negotiate. Also, what incentive is there for them to sell the properties to the rest of the group instead of releasing them on the open market for a better price?

The alternative option that I propose is to:

1. learn what projects are comming up (from guys like escrow officer)
2. Set a date, and tell members who are interested to start freeing up funds.
3. Set goals for negotiation

When the date arrives:
we see how much cash we have to work with.
we find out what each member wants as far as bedrooms, payments etc. etc.
we AGREE on a goal. i.e. payment plans, price/sq foot, free transfers etc.
we sit down and talk with developers

If the negotiator acheives the goal, then the deal goes through. If not, then no deal. This way there are no surprises, each investor is reasonably assured of what he is going for. (and is much less likely to back out)

The big question in my mind is whether a developer will consider a bulk deal as a group of individual units (SALLY WHERE ARE YOU?). We need to ask a developer what he thinks of the plan. If he says "no way", then maybe design architects idea is the way to go.

I think incorporation should be necesary only for liability protection, other than that it deviates from the root of the idea. This is a collective of individuals, each person is in control of his/her own investment. With a corporation, you have a group fighting among themselves to direct a large pool that they are part of and they have no individual control.

Hi All,

I largely agree with maximum, and the alternative given is quite straightforward. Being in the beginning of our co-operation we want to invest ecah individually, but use the power of all investors as a group. Look, I have been negotiating with developers and they are very keen on selling in bulk and blieve me 10/20/50 people buying units at the same time is considered bulk purchase for them, so:

- Points 1 to 3 from maximum, I totally agree
- I also agree on to set the goals regadring, price/sqft, paymentplan, transferfee together then go to the developer, if he accept we go for it when he does'nt we go to the next developer. It would be good to select 3 developer with upcoming projects go to our first choice, no deal then second choice and so on...

A practicality will remain, as I mentioned earlier, the type of units (studio/1/2/3) I still think. It might seem minor point now, but when it comes to making the investment most investors want only studio/1BR and the value of these per square feet has significant difference.

when is our next meeting btw?