The LPE Trust Fund loans out the capital it manages to businesses undertaking activities in the Australian property market at a fixed interest rate with monthly repayments. The returns paid by the LPE Trust Fund to investors are generated by the interest on these loans.
By integrating with Lion Private Equity’s related businesses, the LPE Trust Fund will be reliably stocked with investment opportunities as well as opportunities from third parties that meet the requirements of the fund. This will ensure that capital managed by the LPE Trust Fund is consistently generating interest, and thus profit for investors.
In addition to partially funding Lion Property Group’s other investment opportunities, a portion of the monies managed by the LPE Trust Fund are reserved for financing external opportunities utilising first mortgage, second mortgage, and mezzanine funding models. This is a necessary requirement for diversification and risk reduction amongst the LPE Trust Fund’s holdings.
Property development, also known as real estate development, is a business strategy that encompasses a variety of practices designed to increase the value of a property so that it can be resold for a profit. On a smaller scale, this may include activities such as the renovation and resale of pre-existing properties (colloquially known as ‘flipping houses’). On a larger scale, this includes activities such as converting an established dwelling into multiple smaller dwellings or building on unused land.
Lion Property Group’s primary business service is allowing other parties to invest their capital into our projects so that we can undertake property developments on their behalf.
We raise funds from investors and collect them in a Unit Trust as outlined in RG 77 issued by ASIC. A Special Purpose Vehicle (SPV), created and appointed by the Trustee, uses these funds to purchase a lot of land and undertake a property development. The profit from selling the completed properties is then used to pay investors their return.
At the time of publication, Lion Property Group’s average historical performance based on completed projects is approximately 14% per annum.
Any funds provided to an SPV by the LPE Trust Fund will be repaid with interest utilising the profits generated by completing the property development.
Property management is a business strategy that utilises what is commonly known as a rent roll or a property management book. These rent rolls consist of properties owned by investors which are rented out utilising the services of a Property Management service. Rent rolls, and the incomes associated with them, can be purchased in the same way that companies can be purchased.
Rent rolls are income-producing assets, generating revenues of hundreds of thousands of dollars, or even millions of dollars, depending on the number of properties being managed. The income generated by a rent roll is used to pay the interest on the loan provided by the LPE Trust Fund.
By adding properties to a rent roll, we increase its size. This increases the revenue generated by the rent roll, as well as increasing the market value of the rent roll itself. Lion Property Group has the option of holding onto a rent roll and using it as an income-producing asset over an extended period of time, or, after increasing its market value, we can sell it for a quick profit.