Have you seen an advertisement regarding Gold Coast Morib in the newspaper recently? Is it a good investment? It said
1)start to pay installment only after the building was built (after 2 years)
2)5% of downpayment
3)no management fees,lawyer fees, rental...
4)no installment needed as it guarantees 35% return (i wonder why the developer is willing to sell it if the return is so good),this return will served as the installment.

Need your expertise!

the website is goldcoastmorib.com.my

Just to share my views Based solely on your forum post.

I'd say the 5% deposit and the fact you only pay once the building is complete is absolutely fantastic. This means that if prices go up 20% after 2 years when the property is complete, you get back 5x what you put in i.e. a 400% profit(in reality it would be closer 300% after all costs).

That's a fantastic return, even if your name is Warren Buffet.

However, it's also high risk. If prices go down 5%, you've lost your deposit. Check on the contract, but if you're able to walk away in 2 years time from the transaction with only your deposit being lost, it means the risks are not that high - the very max you can lose is the 5% you put in. If you can be forced by the developer to pay the remainder 95% then it's a much higher risk.

My concern about this investment is the rental guarantee itself. Most good properties that developers sell don't come with rental guarantees - the property is enough to sell itself. Rental guarantees are often given so that properties that can't be sold easily are sold more easily than otherwise.

And I wouldn't rely too much on rental guarantees - the entity that gives it to you is often not the actual developer but an SPV which could easily go bankrupt if things don't go too well. You really need to focus on the actual property, and if the property will sustain itself, then go for it, else forget it, no matter what you're guaranteed.

Thanks for your valuable comment,you really enlighten me.

By the way, what is SPV? What will happen if the SPV go bankruptcy?

How would i know that the developer is reliable?

Ann

An SPV is a Special Purpose Vehicle. It's a company set up not to carry out general business but to carry out a very specific purpose, perhaps simply to make guarantees.

If the SPV goes bankrupt you typically won't be able to get any money from the SPV as it has no or very few assets. You typically won't get anything from the parent company either as the guarantee only comes from the SPV.

Regarding the developer the most reliable ones are often the best known ones as they have spent years creating their brand, and their brand is worth a lot to them. So they will do their best to protect their brand and ensure buyers are not short-changed.

You could look at their past projects, and if you do make sure you see how well managed their past projects have been even after completion. If they've deteriorated very quickly, then expect the same for your own property.

And you can look at the developers accounts which might be helpful only if you understand them. You'd also want to check the SPV's accounts.

Asim

Ann

I have went to see the units last month. I found this projects have been launched for a year, then recently only start with construction.

The company's HQ is in Klang and they have many projects in Klang. After finish this Gold Coast Morib, they plan to continue the projects to Gold Coast Cherating and Gold Coast Kenyir.

My opinion:
1) The developer is willing to sell actually part of the resort (yes, they know the resort could guarantee 35% return), because they need our involvement in promotion the resorts. The method is they provide us with the free package resort of 14 days a year right? And the guarantee is only for 5 years, this is the potential so far they can predict.

2) Another thing you might not be aware: actually this resort is a leasehold land, this year is the 11 year already. This is one of the disadvantage.

Therefore, I am now focusing on the Gold Coast Cherating. The reason:
1) Govt is now launching with East Coast Project Development.
2) The Cherating land is freehold.
3) However, the price is slightly high the Gold Coast Morib. But please remember, the price higher - the return will for sure higher right!

According to the sales office, the Gold Coast Cherating is target to launch after Chinese New Year. I hope by then, I can have the chance to visit the site

** One more, recently I found another project which is better than Gold Coast Cherating. ~~ Bukit Gambang Resort. I am searching for the resort's info...
Anybody have the info about the projects, please share

it seem that a lot of the unit being book by UK buyer.. is there ny added value to the property?

hi guys

i just visited the show unit and heard their marketing promotion today..well as what ahmad said it`s really fantastic package, so I`m quiet interested on it.

anyway, after look into this forum i need to think twice.I have some doubt that I hope any of you can give some experties info

1) regarding the guaranteed return if we lease the unit to developer (1 year - 5%,2 yr-6%,3yr-7%,4yr-8%,5yr-9%)we will have this in written agreement stamp by lawyer, is it means that developer compulsory to pay us with this rate?am i right

2) regarding the `0` loan interest for 24 month...it`s really true because i just bought one house last year by using CIMB loan,I dont need to pay the loan interest during progress construction (~ 18 month)...so i think it should be ok

3) i look into another prespective, even though morib gold coast is not so famous in near future (means people wouldnt interested to stay at the unit), but we still use the unit for our family vacation place...some more at the end of the day it will be our property right.

4) but i concerned with asim statements
"have only one concernAnd I wouldn't rely too much on rental guarantees - the entity that gives it to you is often not the actual developer but an SPV which could easily go bankrupt if things don't go too well. You really need to focus on the actual property, and if the property will sustain itself, then go for it, else forget it, no matter what you're guaranteed".

can you elaborate more what do you mean by actual property...is it mean by using SPV this developer is not selling the real property?
what is the factor that normally SPV company can collapse...event they have started their projects.


hope you/anybody can share your knowledge

You need further info on Bukit Gambang Resort City, you may visit to thier website: www.sentoria.com.my or contact 03-8943 8388 to speak with thier sale personnel.

Bukit Gambang Resort City is planed to be the first & largest resort city in the East COast of Malaysia. It is strategically located near the Gambang Interchange via ECE Highway, approx 2 hours drive from Gombak Toll.

This Resort City of over 500 acres will roll out in phases feacturing the following tourist attractions:

1. The Water Park (60 acres) - probably the largest water park in Malaysia, will be completed in mid 2009

2. The Adventure Park (40 acres)

3. The Forest Park (100 acres)

4. Heritage Square

5. East Coast Bazaar

6. Global Heritage - Bungalow and villa

7. Resort Accoumodations - First Phase of development called Caribbean Bay Resort, will be completed together with the Water Park in mid 2009.

Caribbean Bay Resort Offers:

A. Guaranteed Rental Return of RM1,000 per month for a family suite (Average Selling Price: RM 165,000) and RM 650 per month for a studio suite (Average Selling Price: RM 110,000), for a period of 5 years. The price shown is before discount, Bumi buyers entitled for 5% discount.

B. Fully furnised. - All units come with hotel furniture and fittings

C. Free 7 days resort stay.

D. No maintenance chanrge during the leaseback period.

Many investors tend to avoid project with GRR scheme, as the return is too good to believe. But i beg the differ for this project due to the following reasons:

1. Guarantee Rental Return

The rational behind why the devloper choose to provide GRR scheme, it is simply because of Bank will charge the developer a high interest (BLR +2%) if they develop and own the hotel. Under this circumstance, the developer needs to pay high interst, coupled with principal payments to the bank, it will affect their cash flow for the beginning stage of operation. The rest of planed development project could be delayed.

In Caribbean Bay Resort, the developer only need to pay RM1,000 per month to buyers (approx 7.5% per annum Based on selling price), which is much more lower than interst charge by banks. Not only this, the developer do not need to pay principal payments as the property is belong to buyers. As for buyers, they will enjoy positive return as the return from buyers is 7.5% per annum but interest cost to buyer only 5% per annum if buyer choose to finance this property by loan. (Developer's Panel Banker offers BLR-1.75 througout the tenure of 30 years for their buyers)

This GRR is win-win arrangement for both parties Based on the above explanation.

Besides, Under any GRR scheme, Investors need to be aware whether the devloper can pay the rental as guaranteed. The answer is back to the Devloper whether can they generate sufficient income to support the rental guaranteed.

For CBR scenario, the developer only need to have 4 days occupancy or 13% occupany rate to support RM1,000 rental (assuming RM250 per night for family suite, similar resort developement charge higher than RM250 per night). WIth the attractions planned by the developer and ECER by the goverment, i believe the developer can easily achieve 13% occupany rate per month. (Note average occupancy rate in Kuantan is 64% per annum, source from Ministry of Tourism website)

2. Implementation

Can the developer implement the project? The Devloper has started the consturction work for waterpark and Caribben Bay Resort in July 2007 when they first launched in Kuantan. The Developer, Sentoria Harta Sdn. Bhd. has many years of exprience in this industry and it has completd more than 1000 units residential projects in Kuantan. Most of their projects fully sold.

3. Agreement

Any binding agreement between the buyer and the developer for the GRR scheme. Yes, there is a tenancy agreement to be signed between the buyer and the developer, not a 2 dollar subsidairy company. most of GRR cases in malaysia, the agreement is signed by devloper subsidiary ro related company.

Only my 2 cents opinion. If you need any further information for this investment prospectus, news developemnt, progress photos, pls email me wg_heap@yahoo.com or contact me via 012-3705181.

Well, I have paid a deposit for this Gold Coast Morib as it is really an attractive package. However, I have some concern before signing the S&P.

1. The completion date on S&P is 3 yrs upon signing the S&P, which I think is not too reasonable. As they are now not offering the free interest during construction, if they do not complete in time, we will have to keep bearing the interest payment, which is quite a huge sum.

2. Like what Azim have said, it is a SPV, and my only worry is that if this company go bust before the project completed, we could have nothing in return. Though it is now 70% complete, which might give me some peace of mind.

STG has a few project in Klang, some are completed, but none as huge scale as this. I would like to know if anyone has invested in this and provide some in sight to what to look out for. I am considering pulling out from the deal and burn my deposit as I have some worry on the long term sustainability of this project. If anyone have and view, please share.

Me too.
I have put my deposit for the Gold Coast Cherating since early Year 2008. But have not signed for the S&P.
Don't know when are they going to complete the project.

Any updates for this project? supposed completed in 2009 but seems like no news....

I think the project will be completing in end of new year. Have see the progress on last February 2010.