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pptHome Run Investor Pack v7.pptx

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David Whyte
David Whyte

The New Zealand fund manager Home Run is seeking NZ$5m to support the building of affordable modular homes by FirstBuild. The minimum investment is NZ$750k with returns to be negotiated. Funds will finance land purchases for multiple homes and will only be advanced once building consent is granted. FirstBuild can build high-quality, code-compliant homes that are up to 35% more affordable and take half the time to construct compared to average New Zealand houses. The investment aims to address New Zealand's shortage of affordable housing.

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Modular House Fund Opportunity
New Zealand faces a significant shortage of affordable homes. The fund manager Home Run is seeking $5m to support affordable homes for New Zealand families. Home Run has partnered with modular house company FirstBuild to provide house and land packages. The houses can be up to 35% more affordable than the average New Zealand house price and can take half the time to build* Minimum investment is $750,000 with the return on investment to be negotiated. Fund advances secured over land. *based on $650k three bedroom house and $1m New Zealand house price and a build time of 12 weeks vs 26 weeks in the industry Executive Summary
Rob Thomas, B Com, Director & Chief Executive Officer Former 9 year Elected Member on the Auckland Council, Strategy Dave Grant, Director & Chief Operating Officer Former CEO of Compass Homes with strong industry specific experience, business and leadership skills. Led the building of over 500 New Zealand houses. Mark Holman, Director & Chief Manufacturing Officer QS & Building Materials, background originating in logging, sawn timber milling (Sumitoma Corporation), pre-nail factory management and Head of Building materials. Governance Strength John Lennie, BBS CA(PP) FCIS Dip Franchise Mgmt FA Director Chartered Accountant, Financial Adviser Jeremy Goodwin, LLB, Director Senior partner at Carter Atmore Law, Auckland David Whyte, MA (Hons), MMgmt, PGCertMgmt (Governance), CMInstD Director Extensive global insurance and financial services expertise. Dan Dobson,BBS, Fund adviser Over 20 years experience in global banking and financial markets.
Housing crisis: New Zealands 11-year housing crisis has worsened dramatically since the pandemic (The Guardian, 2021). Average New Zealand house price exceeds NZD $1million for first time (RNZ 2022). Economic outlook: Weak consumer confidence and falling house prices suggest the outlook has become more challenging. The global growth outlook has weakened as a result of the Ukrainian war and COVID-19 restrictions and is adding to inflation (The Treasury 2022). Inflation and interest rates: Tight labour markets and supply chain disruptions drive inflation to decade-highs. Central banks are responding by raising interest rates (The Treasury 2022). Housing affordability: Worsening and has plummeted to an all-time low, with households now needing nearly 12 years to save for a deposit. Average property across New Zealand was now worth 8.8 times the average household income. The rapid house price increases have made Auckland housing unaffordable for a large percentage of the population (Core Logic 2022). New Zealands city of Auckland is ranked in the least affordable housing market to buy a house in the world (Bloomberg 2021). Supply: Prices now rise more rapidly because housing supply is slower to respond to demand (New Zealand Infrastructure Commission 2022). Residential investment is forecast to experience strong growth over the coming year as the large pipeline of consents flows through. However, there is a risk that supply constraints push some activity into subsequent years (The Treasury 2022). Challenges
The New Zealand Government is releasing affordable land for house builders. The house builder FirstBuild has been offered access to affordable land. FirstBuild is able to produce high quality, rapid build, affordable modular homes that exceed the New Zealand building code standards. The fund manager Home Run is seeking NZ$5m to support the building of FirstBuild homes for New Zealand families. Opportunity Family 109 three bedroom house Priced from NZ $650,000
Fund Manager Investor relationship Funding contract to FirstBuild Land security Return on investment Funding Structure Investor Investment into Home Run Return on investment Builder Client Sales & Purchase Agreement Design, consent and build Funding contract from Home Run Return on investment Customer Bank lending with 10-20% deposit FirstBuild Sales & Purchase agreement Settlement on completion Limited Partner
Partnership Model THE FUND Home Run Limited Partnership Entity receiving investor's funds and advancing to FirstBuild for funding house and land packages. Limited Partners Investors who invest NZD750,000 minimum in partnership (classed as a "wholesale investors" as per NZ Financial Markets Conduct Act 2013) and receive quarterly interest payments. FirstBuild Receives funding for house and land packages from HRLP. Pays interest to HRLP at 15% pa and repays advances when house purchaser settles on receipt of the Code of Compliance from Council. General Partner (Home Run Limited) Responsible for the management and business of the partnership. Provision of funds to FirstBuild Limited Partnership for short term financing of land and house packages
Funding Mechanism HOME RUN PARTNERS LIMITED general partner LIMITED PARTNERS wholesale investors HOME RUN LIMITED PARTNERSHIP limited partnership FIRSTBUILD LIMITED modular house builder HOUSING NEW ZEALAND BUILD LIMITED (Crown entity and subsidiary of Kinga Ora) landowner HOUSE PURCHASER Capital Qtrly Interest Mgmt fee Lending advances Deposit Settlement Deposit 20 % Final Settlement 10% Progress Payment 20% Progress Payment 40% Repmt + Intrst 15% pa Progress Payment 10%
Funding Example Example of a family purchasing a FirstBuild home $650,000 Timeframe 9 months Lending Land + Build Consent Design 20% Deposit Settlement $130k $520k $200K $200K + interest 15% pa
Modular Construction Step 1 Design FirstBuild engages a number of professional services to measure the site, check the suitability of the soil for pile foundations and plots your house plan on the site ready for consent. Step 2 Consent FirstBuild works with our Architect and Town Planner to support the building consent application through to completion. Step 3 Foundations Timber pile foundations are completed on site in preparation for the modular house delivery. Step 4 Manufacture The homes are built in our quality controlled factory and transported in different modules to the site. Step 5 Assembly The houses are almost fully completed in the factory with final assembly and landscaping completed on site.
The Offer Home Run is looking for investment: Seeking NZD $5m Minimum investment $750k Return on investment to be negotiated The funds will be: used to finance the purchase of land for building multiple modular homes at a time, and only advanced once building consent has been issued. Funding secured over the land and supported by sales and purchase agreements with customers.
Thank you Disclaimer: Prices and materials are subject to change. Please review the FirstBuild Build Contract for full information about your house and land package options. Images and photographs in this presentation may depict fixtures, finishes and features either not supplied by FirstBuild Ltd or not be included in any price stated. For detailed home pricing, please talk to a FirstBuild new homes consultant.

More Related Content

pptHome Run Investor Pack v7.pptx

  • 1. Modular House Fund Opportunity
  • 2. New Zealand faces a significant shortage of affordable homes. The fund manager Home Run is seeking $5m to support affordable homes for New Zealand families. Home Run has partnered with modular house company FirstBuild to provide house and land packages. The houses can be up to 35% more affordable than the average New Zealand house price and can take half the time to build* Minimum investment is $750,000 with the return on investment to be negotiated. Fund advances secured over land. *based on $650k three bedroom house and $1m New Zealand house price and a build time of 12 weeks vs 26 weeks in the industry Executive Summary
  • 3. Rob Thomas, B Com, Director & Chief Executive Officer Former 9 year Elected Member on the Auckland Council, Strategy Dave Grant, Director & Chief Operating Officer Former CEO of Compass Homes with strong industry specific experience, business and leadership skills. Led the building of over 500 New Zealand houses. Mark Holman, Director & Chief Manufacturing Officer QS & Building Materials, background originating in logging, sawn timber milling (Sumitoma Corporation), pre-nail factory management and Head of Building materials. Governance Strength John Lennie, BBS CA(PP) FCIS Dip Franchise Mgmt FA Director Chartered Accountant, Financial Adviser Jeremy Goodwin, LLB, Director Senior partner at Carter Atmore Law, Auckland David Whyte, MA (Hons), MMgmt, PGCertMgmt (Governance), CMInstD Director Extensive global insurance and financial services expertise. Dan Dobson,BBS, Fund adviser Over 20 years experience in global banking and financial markets.
  • 4. Housing crisis: New Zealands 11-year housing crisis has worsened dramatically since the pandemic (The Guardian, 2021). Average New Zealand house price exceeds NZD $1million for first time (RNZ 2022). Economic outlook: Weak consumer confidence and falling house prices suggest the outlook has become more challenging. The global growth outlook has weakened as a result of the Ukrainian war and COVID-19 restrictions and is adding to inflation (The Treasury 2022). Inflation and interest rates: Tight labour markets and supply chain disruptions drive inflation to decade-highs. Central banks are responding by raising interest rates (The Treasury 2022). Housing affordability: Worsening and has plummeted to an all-time low, with households now needing nearly 12 years to save for a deposit. Average property across New Zealand was now worth 8.8 times the average household income. The rapid house price increases have made Auckland housing unaffordable for a large percentage of the population (Core Logic 2022). New Zealands city of Auckland is ranked in the least affordable housing market to buy a house in the world (Bloomberg 2021). Supply: Prices now rise more rapidly because housing supply is slower to respond to demand (New Zealand Infrastructure Commission 2022). Residential investment is forecast to experience strong growth over the coming year as the large pipeline of consents flows through. However, there is a risk that supply constraints push some activity into subsequent years (The Treasury 2022). Challenges
  • 5. The New Zealand Government is releasing affordable land for house builders. The house builder FirstBuild has been offered access to affordable land. FirstBuild is able to produce high quality, rapid build, affordable modular homes that exceed the New Zealand building code standards. The fund manager Home Run is seeking NZ$5m to support the building of FirstBuild homes for New Zealand families. Opportunity Family 109 three bedroom house Priced from NZ $650,000
  • 6. Fund Manager Investor relationship Funding contract to FirstBuild Land security Return on investment Funding Structure Investor Investment into Home Run Return on investment Builder Client Sales & Purchase Agreement Design, consent and build Funding contract from Home Run Return on investment Customer Bank lending with 10-20% deposit FirstBuild Sales & Purchase agreement Settlement on completion Limited Partner
  • 7. Partnership Model THE FUND Home Run Limited Partnership Entity receiving investor's funds and advancing to FirstBuild for funding house and land packages. Limited Partners Investors who invest NZD750,000 minimum in partnership (classed as a "wholesale investors" as per NZ Financial Markets Conduct Act 2013) and receive quarterly interest payments. FirstBuild Receives funding for house and land packages from HRLP. Pays interest to HRLP at 15% pa and repays advances when house purchaser settles on receipt of the Code of Compliance from Council. General Partner (Home Run Limited) Responsible for the management and business of the partnership. Provision of funds to FirstBuild Limited Partnership for short term financing of land and house packages
  • 8. Funding Mechanism HOME RUN PARTNERS LIMITED general partner LIMITED PARTNERS wholesale investors HOME RUN LIMITED PARTNERSHIP limited partnership FIRSTBUILD LIMITED modular house builder HOUSING NEW ZEALAND BUILD LIMITED (Crown entity and subsidiary of Kinga Ora) landowner HOUSE PURCHASER Capital Qtrly Interest Mgmt fee Lending advances Deposit Settlement Deposit 20 % Final Settlement 10% Progress Payment 20% Progress Payment 40% Repmt + Intrst 15% pa Progress Payment 10%
  • 9. Funding Example Example of a family purchasing a FirstBuild home $650,000 Timeframe 9 months Lending Land + Build Consent Design 20% Deposit Settlement $130k $520k $200K $200K + interest 15% pa
  • 10. Modular Construction Step 1 Design FirstBuild engages a number of professional services to measure the site, check the suitability of the soil for pile foundations and plots your house plan on the site ready for consent. Step 2 Consent FirstBuild works with our Architect and Town Planner to support the building consent application through to completion. Step 3 Foundations Timber pile foundations are completed on site in preparation for the modular house delivery. Step 4 Manufacture The homes are built in our quality controlled factory and transported in different modules to the site. Step 5 Assembly The houses are almost fully completed in the factory with final assembly and landscaping completed on site.
  • 11. The Offer Home Run is looking for investment: Seeking NZD $5m Minimum investment $750k Return on investment to be negotiated The funds will be: used to finance the purchase of land for building multiple modular homes at a time, and only advanced once building consent has been issued. Funding secured over the land and supported by sales and purchase agreements with customers.
  • 12. Thank you Disclaimer: Prices and materials are subject to change. Please review the FirstBuild Build Contract for full information about your house and land package options. Images and photographs in this presentation may depict fixtures, finishes and features either not supplied by FirstBuild Ltd or not be included in any price stated. For detailed home pricing, please talk to a FirstBuild new homes consultant.

Editor's Notes

  • #5: https://www.theguardian.com/world/2021/mar/20/can-you-help-me-the-quiet-desperation-of-new-zealands-housing-crisis https://www.treasury.govt.nz/sites/default/files/2022-05/feu-27may22.pdf https://www.tewaihanga.govt.nz/assets/Uploads/The-decline-of-housing-supply-in-New-Zealand.pdf