by Trish Riley
17th October, 2018
Bold moves bring big rewards
Taking a leap of faith to take on the management of Park View North Lakes in May this year was just the first of a number of bold and gutsy decisions that Joel and Nadine Leibinger have made in order to pursue their dream of owning management rights.
Moving away from their home on the Gold Coast, the young couple had also just signed the paperwork for the complex when they discovered they were pregnant with their first baby and their new venture became a means of establishing work/life balance for the new chapter in their lives.
As a former engineer, and with a background in real estate spanning 12 years, Joel and Nadine sought a property large enough for them to work in together.
And large enough it is. Park View is expansive: comprising 218 three and four-bedroom architecturally-designed townhouses across two stages, 211 of which are under management as long-term rentals. 60 of these are ENRAS properties.
Outdoor facilities include a large pool, gymnasium and a few grassed and landscaped areas for children to play in. The property also boasts its own recycled water reticulation system and a stand-alone manager’s property that is fairly unique.
“We have always dreamt of getting into management rights ourselves,” says Nadine, “and Park View just seemed to tick all of the boxes.
“The property is located in a prized position in the high growth suburb of North Lakes - an engaging, vibrant and energetic community that offers the very best in leisure, health, learning, business and employment opportunities. It is ideal for commuters with Brisbane CBD located a short thirty-minute drive away and Queensland’s famous Sunshine Coast just one hours drive north.
“Unfortunately, the size of the development also presented initial financing difficulties. We realised the disparity between our aspirations and what we could afford with what the bank would lend and thought we’d have to walk away until we were introduced to the idea of a partnership through Transaction Management Consultants (TMC). The partnership suits us perfectly, as in addition to the extra capital from silent partners, we now have access to invaluable professional expertise and industry experience. TMC have been really supportive throughout the whole process.
“There have been a lot of adjustments over the past few months. In addition to settling into the business we are also new to the greater Moreton Bay region,” says Nadine. “With the population projected to increase significantly by 2031 however, and the opportunity to work alongside TMC, we saw it as a long-term opportunity and grabbed it.
“Our skills and background lend themselves to running the operation competently,” adds Nadine. “By holding a full real estate license I have the ability to sell properties on behalf of owners and where possible manage the investor letting pool efficiently. Joel has taken on the more active role of keeping the grounds maintained and while they are relatively low maintenance there are a lot of them and we include courtyard maintenance as a value-add so every property is well-presented and owners have peace of mind.
“In a development this size a lot of what we do revolves around educating residents about expectations, respect and the social norms of living in a community environment. Our focus is on building good relationships with owners and tenants,” says Nadine, “and ensuring that we create a harmonious living environment.
“We really enjoy owning our own business and being in the driver’s seat,” says Nadine. “Knowing that we’re responsible for the long-term growth of the property and increased returns for owners is both challenging and rewarding and apart from scrambling to have everything ready before bub arrives, we are looking forward to the adventure.”
Transaction Management Consultants: Making dreams happen
Often management rights purchases involve complex negotiations to ensure a mutually acceptable outcome and an independent party is required to get involved to assist the purchaser group.
Transaction Management Consultants (TMC) assist purchasers to analyse opportunities in the early stages and offer a transaction management service to find a solution and oversee the process end to end, effectively ensuring the process and outcomes meet the expectations of the group.
In the case of Park View North Lakes Mike Phipps and Tony Rossiter, joint directors of TMC, were engaged to manage the transaction and kept all stakeholders informed though out the process ensuring no surprises along the way.
When financial verification identified a shortfall in the net profit the variance was presented to the Vendor who agreed to a full reduction in the price. This was largely achieved by setting expectations during the offer and acceptance phase of the purchase and being open and transparent throughout the process.
Due to the strength of the asset and the partners involved, the Partnership was presented with a number of offers and Paul Grant of Mike Phipps Finance was able to negotiate with the banks to achieve the best possible outcome.
A couple of unexpected challenges were encountered post settlement that were skilfully managed and resolved by the partnership and their advisors, and four months down the track the partnership is trading entirely in line with expectations.
As many will attest to, deals are getting ever more difficult to hold together and the benefits of having TMC manage the process were acknowledged by all parties. Having a central point of strategic organisation and access to operators with experienced and skilful advisors cannot be understated.
The working partners were delighted with the outcome and suggested that this was one of the smoothest transactions they have been involved in.