Live Cobalt Q&A Call Feb 22nd 2024

Excellent! Just joining now. Thank you very much for joining. Appreciate you jumping on. We’ve already started. Trans, just giving us a quick wrap down of the the market. What’s going on? Let’s share screens, and then we can jump in, still very strong on projects still hard to find sites. You know all that sort of stuff still still going on. Yeah.
So those people that are just joining. Now, if you have a question, feel free to unmute yourself, and you just jump on the zoom. Call. It’s not a webinar, this is. It’s not a formal kind of, you know. Prep Powerpoint presentation, or anything like that. It’s very casual. So if you want, just ask questions, unmute yourself, or pop it in the chat, and that will do it as we go along. So train, we talk to a lot of people about what we do and how it all works, and sleep. These are some of the most frequently asked questions. First one over to you. How do we all make money?
Trent Giumelli00:03:53Quite simply. This, 3 ways. Clients make money from the development profits. We make money from our King’s club membership platform. That’s Cam and I. And then our professional services, which is my development arm of the business. Obviously, we sub contract out to all of our consultants. We have generally about 50 on hand at any one time.
All have a plethora of experience. And we basically put them onto the project for the clients. That’s taken a long, long time to build that team. But it’s like anything, you know. If if you’re a special, if you specialize in one area, you build a team around that, and that’s what we do.
Cam Roberts00:04:31Yeah, I think a lot of people underestimate. You know how far you are in that journey. Like we were talking, both of us were talking to someone today about developments, and they kind of at the start of that journey. That done, a couple of little ones themselves, and you know, but still not getting the returns that they kind of want to, and that’s why they think about coming on board. So you know. Can you share with us? I know you’d on a video during the week about some of the pitfalls to avoid.
Make it quite all 6. But you know what are 3 of the pitfalls that you see. People you know, make the mistake on is they try and do their own development projects.
Trent Giumelli00:05:07Yeah, look, not. Lack of funding is the first one overestimating sales. Underestimating costs.
They’re the first 3 that come to mind. There’s a whole range of different things not having right structures finding the wrong sites. You know, picking the wrong sites and and doing all that. If it’s so, it’s for sale on real estate.com that I use, for instance, psycho, mind, or whatever it’s too late. You’ve missed the you know it. It’s we’ve already seen that it’s gone through. It hasn’t been picked up by a professional, and now it’s on the open market. There are a lot of them coming up as mortgaging position. You know that there’s a heap of them come up. But guess what
we get first. Pick at the cherry still. So you know, we, one of our recent thoughts. Which is the way call, you know, we we picked that up is a liquid ocean. So
Cam Roberts00:05:53and I know you’ve said it in another zoom call, and I’ll I’ll I’d like to bring it up now. But you even not back projects absolutely. Can you tell that story about the project that you’re not back, that a competitor took up
Trent Giumelli00:06:06one of my ex business partners and competitor. took on a site that we knocked back. I think it was 2 years ago. Matt was telling me didn’t even get to add dump to my desk he just went, not didn’t work, and they’re still trying to fund it. So yeah, it’s
it’s just one of those things. You gotta find the right things right. Sites. I’m not sure what everyone’s profession is on on online, you know. But it it’s if you’re an open heart surgeon or you, you have to use the right tools and have to use the right methodologies and and sequence for that. To be successful in this game, you know, we we do.
The same thing is is what a normal professional would do. And and you’ve got to pick the right size because it’s not like a house, for instance, like, you know, if you buy a bad house, you might lose 1015, 20, maybe $50,000. On these things you can lose
Cam Roberts00:06:57a significant amount of money very quickly. Yeah, that’s really good. And so that’s where the lack of experience and costs come in. Yeah, right? So I’m just letting someone else in the room. So so as you talk about, you know the costs and everything like that. What another question that comes up is, how much money is borrowed on each project. Now, when people ask me that question, I tell them what it’s different for every project, every project has its own personality. Almost right?
So can you kind of you know. Just share a little bit more about the Lvr, and how that works.
Trent Giumelli00:07:28Yeah, so traditionally, what we do is we buy the land outright. And then we fund the construction. It’s that simple typically the Lvr will depend on project. But typically it’s anywhere from 48 to 55% majority of the time it’s been between 48 and 52. But on occasions it goes that a little bit further. But that bank debt first mortgage debt. It’s not through mainstream lenders. It’s probably.
if you want to get back, break fast, go and borrow from Cbi and all those type of guys at the minute they they gonna be get nasty soon. You know, with all the thing, as I said earlier, you know, with with some of Europe going into potentially going into recession or in recession. The Big 4 are gonna be harder and harder to deal with. So
we typically use the second tier. Group. You know your ings of the world of class to 7 s tier and you know, really, stable groups speak big portfolios that can fund the these type of things getting, get out, understand? The whole process and move through relatively quickly.
Cam Roberts00:08:31Excellent.
And another question that always gets popped up in the calls that I have with people. And when people jump on with that team members is what kind of returns can I expect, as an armchair developer. You know, when I joined King’s Club.
Trent Giumelli00:08:46Yeah, yeah, look, it’s pretty straightforward. So again, whatever money we kick into a project. We expect to get that out and double it. That’s sort of the the general baseline that we go in at. So we see, returns anywhere from 44 to 108%. On average. However, I’ve experienced 1,300% returns on some projects. So it’s just depends on the project itself what it’s entailed.
You know, for instance, like that that saw it that we got recently. We bought under value. We got. We got an uplifted valve very quickly, so I would use that to our advantage. So there’s all sorts of things that move and shake, and allow you to. You know when you’re buying right, and you’ve always sort of borrowed. That’s the big trick to development. You know, if they always say if you know, if you chasing your money at the back? You’re you’re gonna do your backside. Basically.
Unknown Speaker00:09:39Okay.
Cam Roberts00:09:40okay, cool. And I know this is one of the questions that comes up comes up frequently about the first and second mortgages. People. Watch some of the videos. You’ve done as you do a feasibility study. And you talk about the first and second mortgage. So can you just expand on that for a couple of minutes? How does it work? Why, why do it?
Trent Giumelli00:09:59Yeah, look, it’s it’s very simple. So you know the way we work. With our clientele. Now, predominantly, our clientele sophisticated investors. They’ll put their hand up to participate in a project. They will throw their capital in and then we sign what’s known as a joint venture agreement within that joint venture. Agreement has a second mortgage option.
Now, what does that mean to you? Well, it’s a security option. But as probably of just said us couple of minutes ago. We do have a bank funding in place. Wh, which will take first mortgage security. So what we typically do is the bank will take first. The clients have a second mortgage, and then the profits come out the back, and we distribute them. Same process as we sell down the first mortgage by pre sales, or sales, or refinance, or whatever it is.
As that progresses down, the second mortgage moves into first mortgage when they’ve when they’ve when it’s sold out, and then we either refinance or sell down further and clear the clients out, and then we move into the profit share distribution. It’s a very simple
mechanical method to to understand how it all works. It is a security. Obviously a mortgage security is better than absolutely nothing. And by way of the joint venture agreement, the security is with the group. It’s not with the individual. So, for instance, like, you know, if if who we got on, we got Lee, Mike Daniel, John Ann Ashish, Michael Scott, etc., satchen
basically, if all those parties, let’s just say there’s 10 of you. If all of those parties were to go into a a specific project, let’s say it’s a 200 grand buy an h so it’s 2 million dollars. You all own one tenth share in that venture that whoever is selected then, or puts the hand up to be the director of that particular company which is your
corporation Unit trust. However, it’s set up specific for the group that then has the signatory of the joint venture agreement and the second mortgage with
the Development Company, or where the land is owned.
So that’s the simplicity of how it works. It’s operational for the group. It’s not for an individual basis. So you know that there’s no way that you know.
Mike, for instance, site can outdoe, for you know, for any particular reason, or Daniel can’t outdo someone else, or whoever it might be. You’re all in there as a group involved in a specific transaction. That transaction runs to its fulfillment.
Once it’s done.
it’s all cleaned out. Clean house. Start again, and then we just rotate that through.
Cam Roberts00:12:36Excellent, very good. We do get a ton of questions on this. Yeah.
Before we move on. Does anyone have a a question about first and second mortgages for Trent before we move on.
because it is a common question.
Trent Giumelli00:12:53Very much so.
Cam Roberts00:12:58Looks like you’ve answered that. Really. Well, there, Trent.
Trent Giumelli00:13:01one of the actually one of the comments that came up today around this as well is the chat who will talking to? Said I. Wanna run it past my account, and my solicitor, and that’s cool. There’s no dramas with you doing that whatsoever. But, as I said to him today, be prepared for your solicitor to shit, can it? Now.
the reason, I say that is, it’s part of with sophisticated investors know how to manage risk. And that sort of goes down a little bit further on some of the questions. And basically, you’ve got to make an educated decision as to if you want to participate in adventure, or, if you don’t
now, I’ll give you to the point of
even mice. My, you know, big solicitor, that I use when I present a document to him. He’ll go. No.
I can’t give you advice to say to go for that. But then off hand, they’ll say, I know you do this for a living. So go for because it’s just from an insurance point of view. And and that’s where they where they get caught up in accounts a little bit little bit same, but a little bit different if they’re, you know, bit more forward thinking so.
It’s it’s funny to say. As I said, we get these questions all the time, and I said it exactly the same way as I set up to the chat today is, be prepared for the worst case scenario when you present it to to your solicitor.
But you’re all sophisticated investors. You can make decisions on your own now you’ll either wanna do it or you don’t. It’s that simple I’m not here to force anyone. Cam’s not gonna force anyone. You’re all grown men, grown women, etc. You can all make decisions yourselves. And that’s how it works.
Cam Roberts00:14:34Yeah, that’s good.
It is for the group. It’s not for the individual as well.
And just on that. We’ve just had a a question come through. That kind of relates to that session, says that time period for the project from start to finish.
Trent Giumelli00:14:48Again depends where it’s at so, for example, the reason I say, that typically a project takes anywhere from 18 months to 2 years that is acquiring running from start to finish. And that’s assuming some headaches.
So that’s not to say I can’t extend past that timeline. And it’s not also to say that it can’t be quicker.
And and a great example of that is, you know, one of the projects to our King’s Club at the minute I’ve been working on it for 6 months. I’m only just presenting it now. And there’s still 15 months in it. To get it through the process. Get it built, go through the titles and get out the other side. So II it’s it’s a large estimation of what we do. Like anything. It it there’s a lot of moving bulls with it, whether it’s you know, it could be department of main roads. They not very nice to deal with.
Could be the Ito. We have a lot of stashes with them just on how Gst paid through and back, and all the bits and pieces. It could be council themselves. It could be the environmental department. Not but we see that much on the warehouses. That’s more land, subdivisions, and stuff like that. But it could be a whole plethora of things. Your engineers. It could be
water. It could be a whole lot of different things that go on. My team that work on this
have billions of dollars of projects under their belts. So that’s why we do utilize our consultants because they tried and tested. You know, they they’ve run the cookie cutter over and over and over and over and over again. They’re very good in their feet. Which is the big one to to be able to think on your feet is huge in this in this game cause you need to be able to duck and move really fast a bit like Mike Tyson, if you wanna call that
Cam Roberts00:16:41and and just wait having a drink and having a quick break to get your breath. There’s a couple of different ways of which we present projects to our King’s club members. So can you kinda unpack those 2 main ways? So one is they earn a hundred percent of the developer profits
versus you know that the returns are going to get on white call, for instance, which is a little bit different. So can you unpack the differences in that because people go well, what’s 100% of developer profits versus 44 to hundrednight return on cash?
Trent Giumelli00:17:12Yeah, that’s a really good question. So you know, as I said earlier, typically, we go in with the ambition. So if we put 2 million dollars in, we expect 4 million dollars out. So you 2 million back plus 2
there’s your 100% return straight up.
So that’s pretty normal in our space. It’s not unusual. But where we see, you know things like our way call project. It’s more of a share. Buy in, and we
are doing the project as a as a a, as a joint group. So, for instance, like the profit share might be 100%, for example, and we’ll split that with the group, and they’ll get 50% for the psych of simple numbers on the 100% return developer profits we are looking at the clients doing the development themselves.
We step away from it. And we come in as a consultant and work with the group. So we basically use all of our knowledge experience, etc., etc. Run the project for you. Obviously our team are paid to do that job and bring it to fulfilment once it’s brought to fulfillment, then you disperse in all the profits.
Now, the good thing about that is cam and I obviously have and and do take first ride of options to buy in early and get some pre sales under belt. So what that does is gives a bona fide presale, or pre sales to the development itself.
We get into the good rate, which is generally the start right? Which is what we do anyway. Typically, when we float, a development sale will flow to a price that’s under market, and then lift it up as we go. It’s pretty standard. If you drive past any new development you’ll see a sign that says such and such
it’s it’s always the same. Guy.
Excellent. Sorry. Just took the thing off.
so that’s the explanation between, between, you know, 100% of developers profits. That’s you doing it as a group. And then we’re running it for you. But you get 100% of the profits, or, alternatively, the average returns we see are typically between 44 and 108% on your cash. So you know, if you put 100 grand in you expect somewhere between there.
Cam Roberts00:19:21Excellent!
Another question that I get asked all the time, and our team members get asked to type these calls is as a king’s club member. Once I join up and become a member of Kings Club. Can my family participate in future projects at any point of time, and do they have to, you know, join King’s Club, so to speak.
Trent Giumelli00:19:41immediate family? No they can be part of your policy if you want to call it that however, we do have a What’s it called Kim you
where you can get paid for recommending other people. So it’s another avenue to create cash flow for yourself. So extend family friends, stuff like that. You would start looking at that option. But if it is immediate family like, for instance, like, if you want your kids to get involved in something like this and get us get a get ahead. No dramas.
Cam Roberts00:20:13Excellent. And while you’re talking about the affiliate program, I should mention to folks it’s a 20 affiliate or referral fee, whatever you wanna call it so. You know you’ll pay 20 of the persons King Slug membership when they join up, and it’s only a one. It’s a one time lifetime membership, and we’ll unpack that a little bit later.
Trent Giumelli00:20:33So next question is, can development projects go backwards? And what happens if they do
Unknown Speaker00:20:40in our instance? Yes, they can. You know. For example, you’ll go to a pre-lodgement for council. They’ll all be guns, guns blazing
Trent Giumelli00:20:49for one of the ones we had for 26 slots. I think it was then they throw in all this environmental stuff and
and we ended up with 16 lots in that instance, because of the Lvr. Borrowing, and all the bits and pieces were able to get our clients funds back in full.
That hasn’t happened for a while specifically on the warehouse stuff. It’s more units, townhouses and land subdivisions where it can happen
and does happen. Typically the rule of thumb in this game is, if you’re doing it yourself, the first 3, you’ll go backwards.
I know that might scare some people, but that’s just the stock reality of development. Because you don’t know what you’re doing
Cam Roberts00:21:33another question is, and we had a king’s club member that needed to do this previously, about a month or so ago. What if I need to get my funds out early? So someone puts their hand up, says, Yep, great! I’ll participate in white call, or the next one, or whatever it is. I get 6 months into it. You know the projects going along is per normal. But I get 6 months down the track, and for whatever reason I need their funds back. What happens in that instance?
Trent Giumelli00:22:01We’ve got going on at the minute on on one of our internal ones. But basically, what happens is the whoever’s the director of the client entity. Puts it out to the shareholders and says, who wants to buy that person’s position? You basically sell your share for market right? And typically, that will be what you bought in for
the person who’s unless you are able to negotiate with the person buying in
but because the person J, typically what happens is the existing shareholders will buy you out and they’ll buy you in for the for the base. Right? You can occasionally. It doesn’t happen very often, but occasionally. You can’t sell up for an uplifted right as long as there’s enough for the next party buying into it that has to be done through a solicitor. You have to obviously assign shares go through the whole motion of process it can take up to.
you know, if you’re expecting money out in a day that it’s not gonna happen that fast it typically takes between 3 to 4 weeks for that process to take place.
Cam Roberts00:23:01Yeah. And we’re happy to start the conversation like, if the people in the group, if there’s no one in the group that wants that share, obviously, then we roll it out to the rest of the King’s club members, you know. So we’ll we’ll make the introduction. And at that point, you know, it’s between you and the other party.
Trent Giumelli00:23:19Yeah, so we can definitely help facilitate. If the existing shareholder group don’t want to do it. They’ll let us know and then we’ll go out to a King’s club members and say, Hi, guys, you know, and typically there’ll be some newer people that come in and say, Hey, I want to get into something cool. Here’s one. We’re already 12 months down the track. You can get in, probably get out, and about 8 months or 9 months, you know from here. Blah blah, blah blah blah. So that’s that’s how that that’s a really good way to actually
diversify and and be able to advance relatively quickly
Cam Roberts00:23:49excellent.
and and I know you’ve spoken about this previously. But we’ve got a few people that have joined light on the zoom call so can you just unpack, who manages the project and talk a little bit about your team again, and and the benefits of you know, having a team behind all of these projects.
Trent Giumelli00:24:06Yeah, look at my team, both internal and external. So we we have an internal set of team members. And then I’ve got an external group of consultants that we work very closely with.
those consultants and my team have, I mean, my my immediate team has more than 50 years experience combined and the external team has, you know, over 100 years experience and billions of dollars of projects under their belt. So, as I mentioned earlier. They know all the little nuances that go on, and things that can happen, and and you know what to look for, etc., etc., etc.
but a great, great example of this just recently is, you know, my consulting engineer, virtually double their price on on
their consulting fees, and I quiz them about it. And you know we went through the whole process and worked out a base rate, moving forward. But obviously they’ve got increasing staff costs. They’ve got increasing insurances. All this sort of stuff has to be taken into effect. Same to with builders. Same to with you know, surveyors and things like that engineer. Not engineers.
civil contract is same thing, you know. There’s there’s a lot of things that are moving all the time. But these guys and girls have tremendous experience that enable you to get a project done. Without you having to go and find these people. And, as I mentioned earlier, there’s 3 ways you’ll typically go bust on a deal is one. You’ll find the wrong deal to your overpress, the end product. And 3, you’ll underestimate all the sales, the under. I’m sorry the costs underestimating. The cost is the biggest one.
because they do not miss.
Cam Roberts00:25:46Yeah.
Trent Giumelli00:25:49Now, another. Another question that this is not a negative thing to go and scare everyone into joining Keith. It’s just the stock reality of the game. And I just wanna make everyone clear that you know. If if you’re gonna do it correct, go for it. I’m all for it.
But if if you’re gonna look at something a little bit more, you know, with the armchair stuff that we promote, then this is a great way to do it, because, you know, I’ve got over 25 years experience in the game now. Working on this. I’ve had my own pitfalls through the whole process. I’ve had some tremendous wins as well. But it’s like every developer, you know, whether it’s Donald Trump or myself or anyone else. We all generally go through the same same process and flow
ebb and flow.
Cam Roberts00:26:33Excellent.
Now, another question that pops up is, what if I don’t want to take the profit so that get to the end of the project? Is there an option to take stock instead of profit? And what does that look like? And how does that?
Trent Giumelli00:26:46Yeah, that can happen. We’ve got in the in the document what’s known as a convertible note.
And so you basically can convert your share in the entity into the purchase of a property. So you obviously have to pay stamp duty. Can’t get around that one. You will get it depending on when you do it. If you get in early, like I mentioned before, Kim and I typically get in right upfront and go and secure a couple of sites, and get them at the the best. Right? So if you get in early and do that, you can do the same thing that’s not a problem
you might come in halfway through. Do the same thing. Well, you’re gonna still get a good right? You’re also, gonna save on agency fees and a few other bits and pieces which enables you to get a good asset. So it just yes, you can. It just depends on on where you’re at what you want to do. Whether it’s in your super fund, whether it’s in your personal mind whether it’s in a company or trust whatever
Cam Roberts00:27:45excellent.
Trent Giumelli00:27:46Just have to mute someone there. So
Cam Roberts00:27:49so you’ve you’ve already answered this. But we’ll just throw it out there to everyone on the call as well. So why, why wouldn’t someone just do it themselves rather than you know? Join King Slop W. Why why not like what you said, why not? Well, I could do this myself. Sort of thing.
Trent Giumelli00:28:06Look you can. And we employ people to do it. Because it is a a huge undertaking. And you know there can be a lot of success in it. You know a lot of people don’t have the time to go and learn that from now they’re looking to. You know, a a good portion of our clientele is typically between 35 and 55, sometimes up or sorry up to 65. They’re looking to advance their
their own portfolio to be able to do things. They’re still working, and they might run a business, whatever they do. And they’re just looking for other avenues that you know they don’t have to go through the rigmarole of learning this process over the course of 10 years
or so, cause it does take a bit of time. And, you know, can get in. They can spread the risk, which may what I mean by that. And II this is not financial advice. One little bit. So please be aware of that. But rather than putting all your eggs in one basket with us, you have the option to spread it across. Multiple.
We typically do
anywhere from 2 to 4 a year.
and whether that’s me personally do them, or whether we push them out to the King’s club members. And and some of the question is, why don’t. I just do it myself? I do. I do it with my wife. I still do stuff on the side myself. But I can’t do everything and it would be remiss of me to for that to go on. We see projects come across the table quite regularly at the minute, and you know, whilst
we probably select one in 10 to have a look at out of that list.
You know we still hand select generally about 4 to 3 to 4 a year is traditionally what we look at, but clients coming in. They have the option to go, you know. They can put all of their funds into one. Or alternatively, they can spread that out across 4, for example.
Cam Roberts00:29:57Yeah, that’s great. And you spoke about pre se pre selling as well does the pre-selling to do de risk the project?
Trent Giumelli00:30:05So my team on on the consultant side do it? Yeah, we’ve got all of our licenses being set up at the minute. We basically manage the whole process from start to finish. So all of our consultants are inclusive of the acquisition of the site.
Running the day eyes getting it through the building, managing the building, saw it and selling and registering, so that involves lawyers. It involves. You know, engineers. It involves hydrologists. This whole place acoustics the whole lot, so we do it from start to finish. So the the clients don’t generally have to do anything unless they want to.
You know, if if you know Lee comes to us and say, Hey, train, I’d I’d like to. I’ve got a real estate license. I wanna try and sell a couple of the stock cool. No dramas. But you know our team will still oversee that
Cam Roberts00:30:55excellent and most of our you know, advertising. The way we get introduced to people is primarily through Australia, our line market. But we do have people that find us online, you know, obviously because of social media and SEO and our website, whatever’s out in the Internet
and so if someone’s watching this and they’re from the U.S.A. Maybe they’re an expat from Australia. Maybe they just someone from the U.S.A. Looking for other opportunities. How does that work? Ha! How are their funds cured? How do they get their money to Australia? What have they got to set up? What does that look like for them.
Trent Giumelli00:31:30Depends on their visas. Obviously. So we had a chat the other day from the States. He’s ex Australian. He basically just had to set up an entity over here, get his tax phone number and go through the process of of
buying shares from there. It’s pretty straightforward from that perspective. We do have other avenues available to us. Via our contacts through Dubai. So for those people who are in Europe or all the States. You can come in that way as well. So there’s there’s some interesting and easy ways to do it. We have to flag legally and the it do ask us when we do it. If if any of the clients are from overseas,
can’t remember the term. It’s off the top my head at the minute, but we have to flag that to them, if that be the case, and they. There is a withholding there until the tax file number and all the bits and pieces goes through.
Cam Roberts00:32:26Excellent
and just on that. We can always point people in the right direction as well to, you know, connections of legal teams and accounting teams that can help with all of that sort of stuff
another one we had the other week. Someone didn’t have a self many super funds, so we put them in touch with the right person to have those conversations, and that conversation ended up being, you know, maybe don’t use yourself many super fun. So that was good advice, right from from the account, and that we pointed them to.
Trent Giumelli00:32:55Yeah. And he’s very much like that, you know. He often will point people away from it. Because of the the implications of
doing. You know what’s what’s in entails from
from the perspective of yeah laws and legalities around the superfans.
Cam Roberts00:33:13Excellent!
Right? Well, that’s a that’s bit of a wrap from now, if I queues, and we’ve already taken up 30 min of of everyone’s time, Trent, did you have anything that you wanted to share. Did you want to go over Fiso or anything else? Or do you want to jump straight into QA.
Trent Giumelli00:33:29Reckon we just jump straight into QA. And go from there.
Cam Roberts00:33:35Alright, folks. So this is your chance. If you’ve got some questions for Trent, based on what we’ve spoken about tonight, or or during the the zoom call.
and feel free to type them in the chat there, and I just send them over and we’ll start knocking them over one by one, or just
Trent Giumelli00:33:55nothing’s off limits. Scholars, you can ask what you like.
Unknown Speaker00:34:04And, girls, I should say.
Cam Roberts00:34:15just while everyone’s thinking of questions to ask. We do have 2 or 3 spots left for white call. But you said today you’re talking to someone, and I was on the call. It’s probably gonna close in the next week or 2 once you get legal. Twenty-ninth. Yeah.
Trent Giumelli00:34:34Yep.
Cam Roberts00:34:35So for those people that have been sitting on the fence. You’ve spoken to me. You’ve maybe talked to Trent as well. You’ve joined us on a couple of webinars, you know you’re probably at the pointy end of getting involved with Wakele now. You know you’ve got about a week to kind of make a decision there.
md00:34:58Sorry. I came very late. I didn’t hear most of the conversations.
so how does it work? Really wouldn’t be able to say in a nutshell?
Trent Giumelli00:35:11Which part? Because there’s a lot of moving parts with it
md00:35:15the parties, the like.
how the investor can contribute and what you do for the investor. And how do you share the profit? And all these things?
Trent Giumelli00:35:28So basically, as we said, you, you basically all of our clients are sophisticated investors. So basically, they determine which ventures they’d like to be involved in. They would then put forward how much they wanna go into that particular venture, and what you do is you buy shares in an in an entity. Now that entity is specific for the shareholders themselves, it’s got nothing to do with us?
Once that’s set up, all the bits and pieces are in place. So let’s say you’ve got 10 people with $200,000 for the sake of the exercise. So you own a one-tenth share in that. Someone would put their hand up and say, Hey, I’ll be the director of that company for the purposes of the development. That’s the person I and my group will typically liaise with most
and basically, what we do then is. Once that’s done, we send out the joint venture agreement. That has the mortgage document and all the bits and pieces around how it’s all structured. How the interaction works between both parties updates, things like that and once that’s executed, funds are then released to the development to kick off
from the perspective of the second mortgage, as I explained earlier
first, mortgage will always take preference. That’ll be a bank or the bank, or profit of the the lenders we use. And then the second mortgage will sit behind that we typically typically typically will sell down the development itself
and and cancel out that mortgage. So let’s just say we’ve borrowed 10 million dollars, and we’ve got 18 million dollars in in sales to go through. Well, we’ll typically wipe out the 10 million dollars and then we can make a choice of what we wanna do for the second mortgage, which then promotes into the first for the group, so it could be 1, 2, 3, proprietary, limited as 1, 2, 3, unit trust, let’s say, is the is the entity that you’re a shareholder in
and that that is with development, entity 1, 2, 3, development, for example.
So what happens then is we. I can then decide to whether we want to sell off the 2 million dollars and get that back to you that way. I can decide whether or wanna refinance it, or alternatively, you or some of the other colleagues may want to buy a couple of pieces of stock, so there’s 3 different ways we can deal with it at the end. Once the second mortgages extinguish. So we’re just in full profit
then the profit share distribution happens from there again, it could be a refinance. It can be a sell down, or, alternatively, it could be a an acquisition where you we transfer your ownership of shares via convertible into the acquisition of a of a piece of the property?
md00:38:04Yeah, it makes sense. And now, is it commercial properties or residential properties or land development. W. What sort of project you
Trent Giumelli00:38:15traditionally we like to stick to. I I’ve done them all. The only thing I haven’t done shopping centers, and there’s no real need for me to go down that that level but we’ve done aged care. We’ve done
child secure centers. Vertical living. We’ve done duplexes things like that. Townhouses, etc., and subdivisions right now we just focus in on light industrial warehouses for me. I originally started doing this from a personal point of view. I’ve I’ve got a car collection. So I like to. Yeah, I like space. More. So. Sorry. It’s a lot. Industrial and self storage is what we specialize in now.
But we are moving back towards we will start to do some land subdivisions again. Probably the second half of this year. We are looking at that at the present time. It just depends on what shows up at the at the right time. At the moment. We’ve got enough work for us for ourselves for the next 5 years.
md00:39:14So we have a choice. Either we can take
the capital with the profit, or we can buy stock with that
Marguerite. And
and what is the minimum investment for that.
Trent Giumelli00:39:33But depends depends on each venture. As I said, most clients are sophisticated investors. So with that, you know, they earn more than $200,000 a year, more than 2 million dollars in assets, and and traditionally, most clients will have
on average, about half a million bucks fighting around. That’s pretty normal. If it’s your last $50,000, don’t even bother it’s it’s not worth the risk.
You know. Obviously scare a lot of people away from that perspective not to say it is. I’m just just being open and honest with it. So it it’s just one of those things where you need to be able to assess risk. Sophisticated investors are able to assess, risk a little bit easier.
Versus if it’s your last 50 or $100,000, you know, you’re gonna pull all your eggs in one basket. If anything goes wrong, it’s just gonna be a problem. So it’s not a. It’s not an enjoyable process for all parties involved. So that’s where we typically do it. However, you know, if you’ve got half a million dollars, or 400, or 800, or whatever it is, burning all in your pocket. You then can choose, rather than putting it all in one. You can then split that across. 3, 4, 5, whatever you’ll feel, whatever you feel comfortable with.
you don’t have to use it all. Obviously it’s your choice. We don’t push anyone into anything. It’s it’s quite legitimately. We put it up there. If you want to participate, you participate. If you don’t, you don’t. It’s it’s that simple.
md00:40:56So the projects all these projects have been chosen by you
generally will do all the grunt work.
so the probability of going wrong. My understanding is very low since you have been doing 25 years. Am I right?
Trent Giumelli00:41:23It it is yeah. As I said earlier, the the ones that have gone wrong previously have traditionally been either land subdivisions, or townhouse developments, and what it traditionally will be in that area. So, for instance, like we had one project, which
we did a pre lodgement with council. They said, yeah, we’ll get 26 lots. They ended up giving us 16 lots and chewed a whole host of chunk of land off the back side to run a to run a a cycle line we were fighting it and fighting it and fighting it. But unfortunately, we ended up losing that out so
traditionally it’ll be on that end. We had another one where we had full approvals, land subdivision. Everything was in play. We done all the works. We’re into the final bits and pieces and the environmental team decided to stick their nose in. And and yeah, it delayed the project 5 months and cost, you know, 25 or 28,000 bucks extra. So
we tip. Now, mate, to be honest, I like the warehouse and self storage because it’s really vanilla. It’s it’s
as boring as batch it from the perspective of you know it’s not a fang dangle house, which is what my wife does. She does all the specialty stuff, you know. High end housing.
It’s nothing like that it’s 4 walls and a roof. That’s it, you know. There, there’s no can you put different colors in there, or can you do this? Can you do that. You can do it when you’re on it right now. It’s just a concrete concrete 4 walls in a roof. That’s it. That’s all you get. So from our perspective, it’s just numbers.
md00:42:57Okay, my understanding is that you select the project.
Yeah, you develop the project
and then you sell the project. We are just
gonna rely on your expertise. And we’re gonna finance the project. And we’re gonna get the profit contact finance. Am I? Right? Okay? So what’s usually, how do you make money in the deal? Really?
Trent Giumelli00:43:25If you if it’s
if it’s if we’re doing the deal and we do a profit share Jv percentage share? Then obviously, we make money there. Obviously the other way, as we mentioned earlier through the QA. And and if I queue sorry is my development team
are obviously rewarded for their time. And they get paid through the project as well. So they’re the ways that we get reimbursed, or or or paid for what we do. But I also do them myself as well. So I’m not
precious about. You know
the last sent in a particular deal from the perspective of from my end, because I know I’ve got 4 or 5 others out in the side that I’m doing, anyway, and whatever I don’t make here, I will make 10 fold over here.
md00:44:14Okay, so my understanding is like you
like they fought up. project, appraisal, project, develop and project, selling all these things.
update all, and then
you come to the
dividend part in that part. You also take the share of the dividend or say
Trent Giumelli00:44:39it depends. So we we will acquire the site. We will run the site through to where we need it to be, and then we will then we promote the site from there. So, for instance, sake, Waco, we’ve been working on that for our current project. We’ve been working on it for over 6 months. I think I’ve got at the minute about 2.8 million bucks in it. To get it to where it is.
So you know. Then we’ve promoted it to the clientele to come involved, and and and you know, be part of it. So in that instance. You know, we’re we’re what 6 months roughly down the road we’ve still got another 15 months roughly to finish it. Give or take
and I say, give or type cause it just depends on council from here. And then we go from there. So in that instance we do it that way. In the other instance we acquire a site and then we promote it, and the clients buy the site from us. So
that’s where you get the 100 turn by sales. But you engage us to run it for you.
md00:45:36Okay, fine. And what’s the usual percentage of the profit share like
like us, who will just find in
the prosaic. So the average that we typically see back to clientele is anywhere from 44 to hundrednight return on cash
Trent Giumelli00:45:59over and above your capital.
md00:46:01Okay? And usually that is yearly yearly profit, or this, the whole project, like how long like for the duration of the project
Trent Giumelli00:46:10again depends on the project length. So, for instance, sake, the one that we’re promoting at the moment we’re estimating 15 months from now.
I always said a clientele is just allow 3 months either side. Cause you just don’t know some of the things that come up. So, for example, we had one site we bought as a mortgage position. It had everything done energyx have done all their works, etc., etc. We bought the site that delayed the project 10 weeks. To sign off on something that already previously signed off on you can’t help those things. There’s there’s no way, shape or form that you can. You can
speed that up. It just takes time
same to with department of Main roads if you try and get in contact with them. It’s 8 weeks to answer an email it it’s a bit of a joke. But anyway.
depending on which counsel you’re dealing with will depend on how long it takes. Whilst there are statutory timelines for da, for example, it’s 12 weeks they’ve just stuck. They
what’s it called? Just can’t think of the term at the minute.
notification process, basically where they can delay it a further 30 working days. Now it used to be 20.
md00:47:21Okay, and like, add it twice.
Trent Giumelli00:47:24Legally.
Statutory things are always, you know. It’s like juggling, you know. There’s always balls in the air. Whilst we can do as much as we can from our end. We always go in with our arms loaded. Obviously but you just never know what what potentially can come up.
md00:47:43So my understanding is that in that proposal you discuss
everything so that a layman can understand. For example, I have never done it. I have no experience.
I need to do my own due diligence in a sense. This is my own money. If something goes wrong, I cannot say, okay. I relied on your expertise. I need to also understand
what you are trying to achieve and whether it’s possible to achieve or not. So do you think your report would be enough? Like.
it would be simple enough that layman can understand the what they are going to take it.
Yeah.
Trent Giumelli00:48:27Cam, can you pull up that website? That’s got the things loaded on it? Sorry. What’s your what’s your name?
md00:48:33My name is Mt.
Trent Giumelli00:48:35I can say, doctor, that has happened and does happen. If it’s
if you’ll build my brother in. Law’s going through this at the minute. Where they’ve got a 15 storey development going on there on Level 8. I have a feeling the builders gonna go bust and I’ve said that to him in that instance it’s
horrible to work that through we had it happen on one of our projects through Covid which was a warehouse development and basically, it’s a lot easier to replace it, because again, I’ll just go back to. You’re only building 4 walls and a roof. Everything’s passed through certain criteria and engineering as you go. So the to replace a builder on warehouses is a bucket ton easier.
I just wanted to answer that whilst we’re going through this
same day, what what you’ll typically see is we, we basically put a website together and cannot share the screen in a sec. But basically it will be a full overview of the venture itself. So it’ll be the the name of the project where it’s located. You get a full information memorandum of what goes on. We typically receive that from the the purchase. So we’re buying it from, or alternatively the real estate agent. So or whoever’s involved. So we get like a 10 page
document that basically says, Okay, well, this project’s great. These are the reasons why it’s close to transport. It’s close to this highways. Blah! Blah! Blah! Blah! Blah! Here’s all the spend. Here’s the population growth estimations, all the bits and pieces as per state, government and Federal government data, the location topography, all that’s included. We then include also the plans.
If we’ve got them, the renders but the renders are typically through the process. And then obviously, the feasibility and now the feasibility is always an estimate. Until we get through that process once we got the day, then we can. So the feasibility moves all the time. Once we get the day it gets tightened up.
So that’s traditionally what you will receive. Now, again, we do have it on a web page. All of our clients get to download and see all that data themselves. So that you can make an informed decision. As I said to you said earlier.
you know, if you’ve got half a million dollars burning a hole in your pocket. You’re not gonna go and throw it all on black, for instance, cycle. You’re not. Gonna go and throw it all on red. You’ll go and dip your toe in you know, with this sort of stuff. So, for example, you know, if that would be me. And again, this is not financial advice whatsoever, but
I’d go and probably put a hundred in something, and then maybe see how that runs, and then put a hundred and something else, and see how that runs, and then sort of spread out from there. What that does is give the ability to have
de-risk yourself a little bit from the perspective of project Risk. So, for example, you know, if project one
does well, but project 2 does well, but not as well. Then you covered, you know you you haven’t got all your eggs in one thing.
md00:51:48My understanding is that
sorry? Please come in.
So my understanding is that I can go as well as 100,000 for a project.
Trent Giumelli00:52:00Yep.
md00:52:02I think
Cam Roberts00:52:03so. So. Train. I’ve just pulled up that white call IM prospective, so can I share that to him in the in the zoom chat as well?
Trent Giumelli00:52:13Hi! Here, if you want
Cam Roberts00:52:19so yeah, I’ll scroll so just pop the the dropbox link. So we send this email at folks as well. And this is what Trent was talking about. So each project comes with its own information memorandum.
Usually this is obviously only available to King’s club members. But it’s got all the details of that particular project that we’re releasing.
and it’s just it’s a big, it’s a big fall, and it’s just buffering at the moment because we’re on Zoom. But
it’s getting a
I thought it was your sensational telstra thing. So it’s got like it’s got all the feasibility study in it all the all the the stats that Trent puts in there.
Trent Giumelli00:53:09But just with all the numbers, for example, we do all of our background data. Is backed up by physical data. So clients can see that as well building rights. We use the current building rights, which is generally about 1,500 bucks, a square meter since Covid that’s jumped about 500 bucks a square meter.
But it is what it is. But you can see here, you know, this was one of our sites that we did here in North Lakes is the first one photo you can see there right next to Costco, right on the Bruce Highway, you know 20 K’s or 25 K’s from Brisbane, Cbd.
you know. Very, very simple project to do but it gives you an example of of some of the renders that we do look as I said to you before. Warehouses aren’t fantastic to look at. You know they are a box that you rent out. You typically see, on average about 7% net yield out of them.
The reason I like them so much is because you can rent them out. And whoever’s renting that pays all the costs. Residential investments. Okay, it’s not probable. Not bad. But traditionally, what you’ll see a net result from a residential investment will be about 2 to 2.4%
because you pay for all the costs. So a lot of the information included to what you’re seeing on screen now is what we send out on every single project. So you get the opportunity to review all of this. You can go into all the background homework. You wanna do and make sure that it fits your criteria because not all of them will
but if that fit your criteria, then grant grant you jump on board. You fill out your expression of interest, form that secures your position. One thing I will say is like, Do fill up fast. Because we don’t. We’re not out there to do 50,000 projects a year. I just don’t physically have the time or capacity to do it. So we are pretty picky with what we do.
That’s the site that cams just scrolling through at the minute. We can choose whether we want to throw it into the orange, which is self storage. We’ll probably that whole top section there to the right. We’ll throw which says T. One to T. 7, we’re probably gonna throw that into self storage and put the rest of it into light industrial warehouse. Reason is I can. We can sell that off to a self storage company, for you know.
multiples on the dollar.
That’s what they look like inside, whether we choose to fit the mezzanines out as well. Something else that we choose depending on the market conditions at the time.
But it’s not a necessity.
That’s what our Kings Club members get.
md00:55:47So what’s the cost to be a member of the
Trent Giumelli00:55:52Yup? It’s 9,900 ink. Gst, one off lifetime access.
md00:55:59and we can get all the projects proposal like this way, and then you can choose which one you want to participate.
Trent Giumelli00:56:07You can. There are other avenues of opportunity in there as well. We mentioned earlier. There’s there’s referral options and all. That’s where you can get paid through that as well.
But yeah, it’s 9 9 it’s one off. As we said, this is a 14 day cooling off period. If you like it, you lock it if you don’t, you don’t. If you don’t, we give you your money back in full, and that’s it.
we’re not too phased or worried about people stealing our criteria or information, because purely and simply is the sites that we see that site that you’re looking at. As I said before, we get that specialty stuff
from specialty groups that have these things in liquidation and stuff like that at the minute. There are a lot more showing up at present. Because people are doing it a bit more tough. But it’s just one of those things that you know you. You’ll be hard pressed to find out. So it’s put it that way, because they’re never on
buying them, that is.
are you mainly in Queensland, or do into State, double into state or double into site. I’m from Sydney or Central Coast originally. So yeah, I’m happy to double in state. I tend not to go near Melbourne at the minute.
Traditionally, or actually, the reasons why. It’s pretty straightforward. Chairman Dan pretty much fucked the whole system down there. And it’ll
it takes about 24 months to get a di so we just stay away from it. From that perspective. We do look at South Australia. I am. I’m actually actively hunting in wi at the minute. But but right now.
southeast Queensland’s enough for us, you know. We we don’t need to
go too far away for that reason we’ve we’ve got plenty coming on.
That’s answers Andy’s question, is there any other questions you guys wanna ask? Well, girls.
md00:57:58so my understanding is that there is no minimum investment. I can food for a particular project.
That’s my real investor. Yeah.
okay?
And that’s a good. Thank you so much.
Trent Giumelli00:58:13That’s no problem at all. Thanks for the questions
cool.
Anyone interested to learn more want to have a chat further, just raise your hand.
Interested in joining things like that.
Obviously, we understand that. You know there are significant. Others that have to be spoken to.
One would shoot me.
does regularly
Cam Roberts00:58:45schedule call in there. So if someone has already had a call with us, or needs another one, or wants to jump on a 3 way with myself and Trent happy as well as long as you serious, you know. Don’t waste our time, but certainly happen happy to jump on and otherwise you do have that 14 day cooling off period with King’s Club to jump in. Get all the information you need on my call.
So you can get in on that project as well. Once you do sign up just for everyone’s benefit. Once you do sign up and become a king’s club member. You’ll have a call with Trent and to talk about the project. So you know some strategies, or whatever you want to talk about with Trent, you’ll also have a talk to me, and I’ll on board you as part of the portal. So there’s a back end portal. We can go where these projects are also released to our king slab members.
and so I just walk you through that part of it as well. So just make sure you’re on board. You know where to go for support, for questions and things like that.
Trent Giumelli00:59:45Yeah, no, that’s fun.
Unknown Speaker00:59:47Do you take cash in the project or so
Trent Giumelli00:59:53satchen? Can you just reword that I’m not quite sure what you mean by it, or just take yourself with mute. Do you take cash in the project, or serviceability, or both minimum amount to spend.
Not sure what you mean.
Cam Roberts01:00:20Just while. Here we go.
Trent Giumelli01:00:27You have to pay the can. You deduct the 9 9 off the return. Andy, you have to pay the 9 9 upfront to get access into the deals. But you can claim the 9 9 as education and learning off your taxable income? So
technically, yes, is the answer to your question. But you obviously have to pay to get access to get access to you, then climb it off the back side of of what you want.
So, for instance, like, if you put a hundred grand in and you earned a hundred grand, then your taxable income would be
90 court.
And then what we haven’t mentioned is is a whole plethora of contacts and stuff like that that clients get access to. So, for instance, like my accountant, who’s got a financial planning background as well as obviously being a an amazing tax accountant hell of a character as well as Matt is cut snake like I then we’ve got all about.
I couldn’t even tell you how many legal professionals we’ve got in in tow now. But you know, if there’s an issue we had one client who had a an issue within a state. We’re able to put them in contact with one of our Co. Good lawyers.
And they were able to sort that out through that it could be superannuation information. We can help. With that. It could be structure. We can assist with that. You could be looking for something else outside of you know the
other avenues to generate cash, flow plans. Cam has an immense amount of experience on digital marketing and and and advertising for businesses. So if you’re a small business and you’re looking to grow, he’s the man to talk to. He’s that side of my screen. So that’s why I’ll say that. Huge amount of experience there. Matt Solomon, who’s with me?
He’s got just as much as experiences me in, you know. Development. So he. He’s another avenue of person that you can get in touch with and chat to. He helps us run the projects and manages that whole process. So there’s an absolute plethora of information there. Weren’t here to promote King’s Club and and go through that. It was just here for a general webinar. But the the questioning came up to, how do people join? That’s how that’s how it happens so.
But if you do book a call, you know. Please be respectful of your own time and hours as well as Cam said.
We do get a lot of calls coming on it. But the criteria is, as I’ve mentioned, multiple times to not specific investor. You know you’re ready to rock and roll on something like this you might already be in property, or you could be in shares, or you could be in Bitcoin, and everything else which has gone berserk of like gold, silver all that. We have avenues down that line. You know there’s a whole plethora of information, and you’re looking to get into the game without, you know.
putting all your eggs in one basket, for instance, I can learning the process the hard way. We’ve already done that. The joys of experience. You pay one of 2 ways, which is time or money. I think I’ve paid both multiple times whatever. But, it enables you to spread your spread. You know your essential risk where you can go. Okay, I might put X amount in project one X amount in project 2, 3, 4, 5, whatever it might be to suit you.
md01:03:44Do you think if I create a
discretionary trust, and in that trust only one member is a substitute in this store. Would you accept that?
Trent Giumelli01:03:58How’s it so
md01:04:00say, set up is in the trust
corporate trustee and the trust I mean that, trust me my partner and my boy.
and only one. Yeah. One person is the security investor in that category. In a sense like one person done around 400 K. So
is that all right? But fast could be the that. That.
Trent Giumelli01:04:27Are you the director
md01:04:29of the corporate trustee? Yes, I’ll be part of the corporate trustee and my partner.
Trent Giumelli01:04:33Yeah, is your partner, the appointor of the trust, though, or are you?
md01:04:37I don’t know what’s the difference. I need to talk, really, what’s the difference? I don’t understand really a point. What does it mean?
Trent Giumelli01:04:43The appoint or controls that whole? They’re the they’re the most significant part in that whole structure.
md01:04:49Who who should be the appointed by the person who is the like subsequent investor, or any.
Trent Giumelli01:04:58without getting too technical? It it. It depends on your structure. So, for instance, like my wife and I have multiple different avenues and things set up.
I’m traditionally the appointor of
all the development stuff. But it changes, depending on what aspect of life? It comes down to. So it it just by it. Depend it sounds like you would be the the director and the appoint, or in that instance, and their beneficiaries. By the sounds of it.
I could be wrong. But that’s how I’m hearing it. Basically, that entity would be the shareholder. How you disperse your funds through that entity is up to you. That will come down to your tax accountant figuring out which is best for you.
So it could be a distribution to you. It could be a distribution to your super fund. It could be a direct distribution to your partner. It could be a a third party distribution to another company. Now, all of those different avenues have all different tax levels. So if it goes to you and you’re on a hundred 90,000 bucks a year, for instance, like you jump a tax level.
If your partner it doesn’t work and you can give her $180,000 a year in in classified income. Then she’s paying 30 cents on the dollar if you put it into a super fund, it’s roughly 15%. If
if you go into a corporate company? It’s currently 25%. But you have other ways and avenues to write stuff down through that. So
again, that’s pretty technical, but there’s a good tax accountant will be able to point you in the right direction there. But if you’ve already got a structure set up, then it’s a great avenue of you to be able to say, Okay, well, I’m gonna lend a hundred $1,000 to 1, 2, 3, proprietary limited as 1, 2, 3 unit trust. I own one tenth share for that money. When that is paid through from the perspective of you know, pay it through, get into the development and pay it back around the other way.
I get my 100,000 back. That goes into that entity. Let’s just say you’ve got $100,000 in profit for the cycle of the exercise. That entity will then distribute those funds accordingly to your setup.
I hope that made sense because it was a very long way of doing it.
md01:07:10Yeah, I understand. But what’s the like? How does it impact? Who is the appointed like?
How does it make difference, really whether me or my partner
and how to impact the trust?
Trent Giumelli01:07:27The appointor can sack the director.
md01:07:31Thank you.
Trent Giumelli01:07:34That’s the simplicity of it. So the app has full and utter control.
md01:07:40Okay, the apprent can also appoint a trustee, and all these things can close the trust and appoint a new trustee. That’s the key.
Okay? So basically there, pointer is controlling the whole trust.
Trent Giumelli01:07:54Yeah. Yeah. But if if say, for instance, like, you’re the appointor and your wife’s the sorry. Your partner’s the the director, and you you
go opposite ways. Then you can sack the director.
md01:08:07Okay. So appointed has the authority to check the director as well as the trustee. Also beneficial, anything mobile.
Trent Giumelli01:08:17Yeah, that is correct. Just with that family law comes into play, though. So you’ve you’ve got a
again, you need a really good tax accountant to get through through all this information. because family law changes things again.
md01:08:32So what’s gonna happen like, say, if I create a trust, and I put the
half a million dollar that would be in a sense, I’m providing the equity, or I’m just lending the trust this month.
Trent Giumelli01:08:45depends where it’s coming from. So if you’re lending the money into the the entity, and then that entities are doing the investment. Then, yeah, you you’ve you’ve basically would hold a loan agreement to your entity. And then that entity would hold a loan agreement as a a shareholder within the corporate trust data that is working with the development entity.
So it’s a bit of fluffing around. But it’s not too hard to do.
md01:09:13Okay, thank you so much. I really appreciate. You need specialized tax on that. It’s it’s it can get technical.
Is. The my situation is a little bit conf like unusual. At this moment
my partner is earning roughly around 400 k. My income is 0, and we have one dependent is, my boy.
So that’s the situation.
But we satisfy criteria from the subsidy industry my partner is earning, and also we have the asset base
that goes beyond that question. So.
listening to this.
and now she she doesn’t have 10.
Trent Giumelli01:09:55I know that. But I would. If you are going to look at doing something, one. I would get her to watch re, watch and reply all this and let her haven’t listen to it. If you do have a call. With us. I would do. I’m sorry my daughter’s just coming. I would ensure that. She’s on the call as well.
md01:10:20yeah, thank you so much. I appreciate that would be the best thing you can do. Yeah.
Trent Giumelli01:10:26whatever sorry it’s bedtime.
Cam Roberts01:10:28Yeah, that that’s cool. We appreciate that families.
Trent Giumelli01:10:32The last question was, are we 100% guaranteed that we’ll get our capital back at a minimum? Any that look? The the answer is. Yes, from the perspective of you hold a mortgage over the property. There’s no guarantee per se from us, because the mortgage is the primary activator of it. So whatever funds you lend into the to the specific venture,
don’t mind, Willow. She’s there, up she likes me, and on, camera.
Come on, there you go. That’s you guys.
Sorry, boys and girls.
the joys of children. Yeah, she’s crazy. She’s a bit like a mother so basically, the the guarantee is the mortgage that that’s your security. That’s where it all comes into play. Again. All of our clients tell us fiscate investors. They can assess, risk. You know, you need to be able to
work out if the risk is suitable for you to be comfortable with that process that we’ve discussed. And if you are cool, no dramas, we do it. If you’re not, that’s also cool. You know that it’s probably not for you. In that respect there might be some other avenues that you might want to look at. Whether that’s just general property investing, for example. But
I find personally, and it’s because I’ve been doing it for a long period of time is.
I find, development a heck of a load less risky than property investment.
And and I’ll tell you why, is specifically we buy sites that we can cut up into 35 warehouses, for example, or self storage, or whatever it might be, off a single transaction.
Alright, that’s how we’re able to make huge profits. Now there is risk to it, because you’ve got to go through the process, get through the council, build it, finish it all the bits and pieces. But if I was to go and do the same on on a property investment. I go and buy a property in Nosa, for instance, for 5 million dollars, or I have to wait for for growth with our stuff. I can create growth.
So that’s why I see investment far more risky for me, because I look at it from the perspective of how can I turn something quickly into opportunity? And that’s how we do it.
So if that’s something that you can, you know, resonate with, then this will be great for you, because if, like a lot of our clients there, there’s some great opportunity in it. If it’s not, that’s still good, you know at least you acknowledge that now. And you’ll be able to go and do the thing that you can do.
Cam Roberts01:13:05Excellent. And we did. We did have another question sneaking there when you’re talking to nd before as well. And Anthony says I invest 200,000, and after 15 months reinvest in another project like a different project without going through the return process. Tax side of things.
Trent Giumelli01:13:27you can to a point. Now, for example, if you if we finished a development, for instance, like on the 30 first of May.
and you got your profit
out at that particular point you just. You have to remember that every venture is separate, or it’s not a combined togetherness. They stay. Stay there, please.
So, for instance, like you could have venture 1, 2, 3, 4. So let’s say, venture one finishes you want to get into venture 2. That’s fine. But if you finish, and depending on your structure again, can you? Not?
So is.
Is how you work the tax system to your advantage. So, for instance, like, if I have an entity set up, and I earn my profits on the 30 first of March. I don’t have to do my tax until the following March, which means I can use that money for 12 months, but I have to pay tax on it.
Alright. So it’s not tax evasion. But it’s certainly minimization that you can use for your own advantage.
so she’s a plan. I love it. So again, this is getting really technical. But it’s how people are able to advance relatively quickly, because you’ve got a structure in play. You don’t. You know, when you’re when you’re when you’re employed by someone you have to do your tax, but I think August every year, but as an entity you don’t, you don’t have to do it until May the following year.
Alright, and that gives you what roughly 1112 months, where you can use that money to your advantage and make more money and keep going. But you will have to pay tax, you know. So, for instance, like, if you make a hundred grand in profit, 25 Grand has to be put towards tax. If you’re in a company
if it’s you personally, obviously, it’s gonna be a higher amount. If it’s a trust, same thing, it’s just a distribution. If if you earn a hundred, leave 30 aside, you’ll be more than comfortable.
rotates and compounds and does its thing.
md01:15:31I have a dex question. For for example. my contribution is $10, and then
the project profit is another $10, or to be the $20,
and I can buy stock with $30. So I put another $10.
And do you think if I buy the stock that time I need to pay the tax on that $10, or when I’ll dispose that stop that time I need to pay the tax.
Trent Giumelli01:16:01That’s an account. Sorry,
is it? I was just gonna go back on that other com, that other question. Who asked that other question? The 200,000 thing, Anthony
Anthony? So a way. Also, again. you’re always going to pay tax when you take a profit full stop in a story. But if you acquire stock
and you don’t take a profit, that’s a different conversation.
Now that’s again a conversation that you would need to have with your accountant. But it’s another avenue for you. That’s why that’s why I keep a lot of stock, because the rental income pays for my lifestyle, and the stock sits there. I can use it. I can borrow against it. I can do all that and minimise my tax
within the rules of the of the law.
md01:16:47So do you pay tax when you buy your stock with profit.
Trent Giumelli01:16:52I buy the land, for instance, I can then produce the pro. It’s like and someone’s just said, Do you get capital gains tax? The answer is, no, as a property developer, because it’s like producing underway, you know, if I sell underwear for a living, I yeah get batches of it and sell it. And I pay gst, so that’s the difference.
So if A and clients don’t typically get hit, hit hit with C capital gains tax, either, because you don’t effectively own the property. You’ll get your essentially a lending party, or a loan party, or whatever you want to call it. However, you want to picture it, it’s up to you, and those funds come back, and then you pay tax on your profit.
So that’s how it works
again. This is not tax evasion. It’s just ways to use the system to your advantage.
Now, will that loophole close? Maybe I don’t know. I mean, they’re looking at an asset tax at the minute through our joyous idiot government they’ve got in in play. Do I think it will get up? No,
But you know they’re they’re trying stuff all the time.
md01:18:01If I take profit as cash, I pay tax, but if I take profit as a stock as long as I don’t dispose that as stock. I don’t pay the tax
Trent Giumelli01:18:10you’d have to disclose that you own it. But you’re not taking. You’re not taking cash.
md01:18:15So that time I’m not being tagging equity basically is is what you’re doing.
Okay? So that that means like.
Trent Giumelli01:18:23when I’ll dispose it, that 100%. Yeah. So in that instance, let’s say you put 300,000 in, and you bought a property at 450. Let’s say it was 300 g. Capital, plus another a hundred 50 in profit, for example. So 4 50 is the total.
Alright. Then you might refinance against that and use that to your advantage. So let’s say you borrow $300,000 and pull your capital back out. And then you basically got an asset sitting on profit. Yeah, it’s so. It’s equity.
Then you would use your 300,000 and rotate and do all the things that you want to do. However, if you sell that property, and you make $300,000 in profit on that property, then you would be subject to capital gains tax.
But by that time.
again, depending on how you’re structured. If you’re in a trust, it’s always 48 cents on the dollar. I believe if you’re in a company, it goes down after 12 months, but if it’s in your personal name again, you get that discount.
I think Cg is an absolute waste of time. But anyway, that’s just my own personal view on it.
md01:19:30So my understanding is that
300,001 I got profit for 1 50. So altogether I got it 4, 50, and later, when I dispose it says, 600 1,000, then I have to pay tax on that 300,000. So
Trent Giumelli01:19:50you you would obviously have ways and means to write that down through a good tax account. But it just depends on where you’re at at that particular stage in life, too.
md01:20:01But really I mean by your smartness the capital I equity I provided at first I really pre finance, and I’m creating again and again, and I can hold them. And I can get that intern.
Thank you so much.
Trent Giumelli01:20:17No problem.
20 years of very, very difficult tax information. So there’s just so many ways you can maneuver it. And do you think so? It just depends on everyone’s individual structure.
Cool on that note. I’ve got kids to put to bed.
Thank you. Everyone for for coming. And obviously the fantastic questions. Thanks, cam, as always for putting those on. And and if you do want to have a detailed chat with us. You can click on the the link. The camps provided. And we’ll be able to book you in. Have a chat Md. As I said, if if you are, gonna do that, I would suggest your wife be on that call as well. And there will be a recording of this, so we can send that out as well.

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