ResiFund is an Australian residential real estate investment fund. On their website, they quote a return of 10.8%. However, if you read the fine print, they are actually quoting a 10.8% return for Open Corp, the company’s sister company. Open Corp provides financial education, and finds investment properties for investors. So it’s unclear where the 10.8% return is for investors who have bought and sold their investment properties through OpenCorp or if OpenCorp are keeping tabs on the properties they sell to other people.
ResiFund states that a significant proportion of their returns will come from quarterly distributions. However, they do not quantify what a “significant proportion” is. They also do not quote historically, what the yield is. This means that it is unclear what the anticipated capital growth is vs the anticipated rental returns are.
Resifund’s gearing policy is 50% of the current value of the assets. This means that should the fund be wound up, investors will not get anything. Of course, the intention is not for the fund to be wound up, and Resifund do anticipate a good return.
However, doesn’t everyone who starts a fund anticipate good returns? And wouldn’t everyone who starts a fund state that on their website (except Warren Buffett who famously stated to the public that Berkshire Hathaway was overpriced)?
ResiFund also sells by getting people to come to seminars on real estate investing. In my head I worry when I hear this. I feel that anything that can’t be sold on math alone, shouldn’t be sold.
Resifund is an Australian residential real estate investment fund. As with all investments; you need to do your homework, and make decisions as to what is best for your own interests, however the process gives me pause.