tag:blogger.com,1999:blog-8133337349608142588.post5555412083456065719..comments2024-02-28T03:43:57.586-08:00Comments on FET (old posts): Is residential property Super?Cameron Murrayhttp://www.blogger.com/profile/08737859133901303110noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-8133337349608142588.post-63329441464085447692013-11-04T06:23:29.302-08:002013-11-04T06:23:29.302-08:00We need to show what we have in the market for our...We need to show what we have in the market for our Real Estate Investment Australia. As long as we have a quality property, our business is safe and has a higher chance of succeeding. It is important that we know the keys to success in order for us to gain the right information needed for our business.<br /><br /><a href="http://real-estate-in-australia.blogspot.com/2013/08/Property-Investment-Brisbane.html" rel="nofollow">http://real-estate-in-australia.blogspot.com/2013/08/Property-Investment-Brisbane.html</a>Anonymoushttps://www.blogger.com/profile/13480734411167227785noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-75053221700100773452011-01-09T08:15:30.208-08:002011-01-09T08:15:30.208-08:00There are plenty of reasons why Listed Property Tr...There are plenty of reasons why <a href="http://www.listedpropertytrusts.com.au/" rel="nofollow">Listed Property Trusts</a> issue is such a dismay for many. I guess, not only with it but on most investment around the world. The slowing down of the economy is such a slap.Blue Quillhttps://www.blogger.com/profile/15019869508382439247noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-53612540689985201082010-07-28T19:30:32.308-07:002010-07-28T19:30:32.308-07:00www.usaffordablehome.comwww.usaffordablehome.comAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-84860869580562660112010-07-21T22:26:40.990-07:002010-07-21T22:26:40.990-07:00Hi Cameron - I guess it really doesn't matter ...Hi Cameron - I guess it really doesn't matter what definition you apply. My point was really that in finance mezzanine funding is considered high risk and wholesale only, and EFM would never be considered as such. But you can use whatever term you wish, that's fine. Sorry if I pressed too hard.<br /><br />I actually think the Rismark 20% product is a responsible level of involvement, and I suspect (but of course I have absolutely no evidence) that it would help stabilise the housing market. However I do concede that like everything it can be overdone, especially if more lenders get involved, competition heats up, and creativity comes into play. Picasso was a conservative when compared to Wall St.<br /><br />If you get time one day please post an OP on what elvel of EFM lending would be responsible, and you could also look at Sharia finance which is a whole new ball game.<br /><br />Cheers..Peter Fraserhttp://www.brisbanebusinessfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-4210322606668618202010-07-20T22:17:14.325-07:002010-07-20T22:17:14.325-07:00Not so unique I thought, but happy to use any term...Not so unique I thought, but happy to use any term that you think covers these middle layers of financing.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-32390787669227750492010-07-20T21:41:30.643-07:002010-07-20T21:41:30.643-07:00This comment has been removed by the author.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-2500903686224894172010-07-20T21:17:48.850-07:002010-07-20T21:17:48.850-07:00Ah well I can't possibly counter a definition ...Ah well I can't possibly counter a definition that is completely unique to you Cameron.<br /><br />Many private lenders have provided individuals with short term second mortgage funding for years. But none have ever referred to that as "mezzanine funding"<br /><br />You're on your own with that definition Cameron.Peter Fraserhttp://www.brisbanebusinessfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-58714701015722173532010-07-20T19:54:02.349-07:002010-07-20T19:54:02.349-07:00I meant "Mezzanine finance is a term used mor...I meant "Mezzanine finance is a term used more broadly than you make out Peter". My use of mezzzanine is the umbrella term for types of lending that fall between senior debt and equity, including various hybird securities.<br /><br />EFM appears to fall under this umbrella. <br /><br />Representing that the risks surrounding property prices are similar to the risks of this security is somewhat misleading.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-3070103139054275642010-07-20T19:06:23.909-07:002010-07-20T19:06:23.909-07:00Cameron - Mezzanine finance is NOT cash flow lendi...Cameron - Mezzanine finance is NOT cash flow lending. I don't know where you got your definition from. I have only seen it used in developments for office towers, residential developments, or land developments.<br /><br />It is used in the very final stages when the development is close to being finished in a structural way, but needs the finishing touches. For example the fitout in a multi-residential construction - kitchens, bathrooms, lining, floor coverings, painting etc etc.<br /><br />It is never used for housing except at the wholesale level. refer this link to a local mezz funder http://www.paridian.com.au/index.php?cid=100022<br /><br />I've had a quick look on Google and it appears that in the USA they also use it for IPO's and startups, but it just ain't available to you and I unless we get involved in multi million dollar apartment developments. It is wholesale funding only.<br /><br />If you have some references or links showing alternate uses I would like to check them out. I'm happy to learn something everyday.Peter Fraserhttp://www.brisbanebusinessfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-28240427403286221112010-07-20T17:53:22.478-07:002010-07-20T17:53:22.478-07:00Mezzanine finance is used more broadly than you ma...<a href="http://www.bondcapital.ca/media/pdf/Bond_Capital_Mezzanine_Finance.pdf" rel="nofollow">Mezzanine finance</a> is used more broadly than you make out Peter, and can often include a stake in equity. It fills the middle ground between senior debt and equity - but it also increases risk for the home buyer who is now even more highly leveraged. The EFM is not actually equity (otherwise its losses would be leveraged), so it falls in this middle ground mezzanine area of finance.<br /><br /><i>Traditional mezzanine lenders are book-and-hold investors, generally focused on cash-flow lending, looking for a minimum term (call protection) and equity participation to generate longer term results.</i><br /><br />Where is differs is the timing - EFM is marketed as a very long exposure to the residential market, whereas tradionally mezzanine finance is used to cover funding needs in the short term.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-88592733911579238382010-07-20T16:47:53.685-07:002010-07-20T16:47:53.685-07:00Leith - I'm still waioting for a reply.
Camer...Leith - I'm still waioting for a reply.<br /><br />Cameron - Mezzanine Finance is used for high rise residential developments etc when the construction has reached a stage where values have been added to the point that another lender can come in and provide sufficient finance to complete. that finance lasts only a short time until sales clear both the mezzanine finance and the first lenders debt.<br /><br />You draw a very long bow when you say that that an EFM is similar to Mezzanine finance.<br /><br />I beg to differ on that point.Peter Fraserhttp://www.brisbanebusinessfinance.comnoreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-2532283366872486062010-07-20T16:16:39.390-07:002010-07-20T16:16:39.390-07:00There is nothing wrong with equity finance in isol...There is nothing wrong with equity finance in isolation if it just a voluntary agreement between parties who all understand the risks. Linking it in a positive way to housing affordability is a gross misrepresentation. <br /><br />The features of equity finance mortgage make them very similar to mezzanine finance. Have we learnt nothing? Bundling together sub-prime debt/equity as diversified and low risk has been done before.<br /><br />But in this case there is also a moral hazard issue, as risk are shared, and rewards for housing upkeep and smart timing of a sale are decreased.<br /><br />Stephen, I also tend to agree that housing is correlated to other asset classes (maybe not to the degree of say domestic and internationaly equities), and that the returns on a individual home are very closely correlated to the market as a whole. Thus, the individual who owns their own home on retirement already has plenty of exposure to the residential market.Cameron Murrayhttps://www.blogger.com/profile/08737859133901303110noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-22822988657372335792010-07-20T04:16:41.460-07:002010-07-20T04:16:41.460-07:00Great analysis Cameron. I am not surprised the spr...Great analysis Cameron. I am not surprised the spruikers are pushing this type of financing. Having exhausted traditional forms of mortgage finance, the 'innovative' financeers are now desperately trying to reinvent the wheel in order to keep ever-increasing amounts of credit flowing into housing. <br /><br />No doubt the property industry and government will soon be heralding equity financing as a breakthrough affordability initiative, even though it is obvious that the additional credit will soon get capitalised into higher house prices and would make housing even less affordable.Leith van Onselenhttps://www.blogger.com/profile/02398609396035352262noreply@blogger.comtag:blogger.com,1999:blog-8133337349608142588.post-43120270707442101102010-07-20T02:59:56.456-07:002010-07-20T02:59:56.456-07:00shares in the sydney harbour bridge
like hell hou...shares in the sydney harbour bridge<br /><br />like hell houses are uncorrelated with other asset classes, what do people borrow against to make big investments?Stephenhttps://www.blogger.com/profile/02999195786057327481noreply@blogger.com