We don't say yes to all opportunities. Here's why.

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We don’t say yes to all opportunities. Here’s why.

The Australian property market is on the rise as a result of low interest rates, government incentives and relative affordability in much of the market. As an investor you might be feeling an increasing sense of urgency that you might miss out – or that property opportunities might pass you by.

However, successful property investing needs to be led by data, research, expertise in the market and thoughtful, careful decision making. That’s why we don’t say yes to every opportunity.

We don’t say yes to all opportunities. Here’s why.

Every investment opportunity we have has been thoroughly vetted by our team. Whether or not the project comes to Lighthouse investors, it will still be going ahead. That means we are thoroughly, 100% invested in every project we take on.

However, through Lighthouse, we want to also offer the best of those opportunities to our investors. So, how do we decide what opportunities to bring to our investors… to you?

Is the timing right?

As with any good relationship, timing is everything. For a project to be successful it needs to be timely. If it doesn’t fit in with our project scheduling or is the wrong time in the market, we won’t proceed.

We never make investment decisions based on emotions. While we, of course, look for to bring our investors opportunities that are good and feel good, rushed, impulsive or emotional decisions based on a feeling of missing out is simply bad business

Does it add up?

When we bring a project to Lighthouse, we need to ensure that we’ll be providing the right return on investment. We won’t take up an opportunity if there’s a risk that won’t happen. So, if contract negotiations don’t go as planned, or we uncover significant expense through the due diligence process, then we won’t proceed.

Do we have the right resources and expertise?

We always consider whether we have the right resources and expertise internally. And, if we don’t, whether we can access them externally at a reasonable cost. Without the right resources or the necessary expertise, a project will flounder and struggle to get off the ground. If these are accessible but very expensive, it will cut into the bottom line for our investors.

What is the third-party risk?

We complete thorough and rigorous due diligence into every opportunity we’re presented with to ensure that each investor’s interest, and our own interest, is protected, and risks mitigated wherever possible. This includes thinking about the third-parties that we’re engaging with on the project.

We always consider who we’ll be dealing with, and their reputation on the market. We ask ourselves if they’re financially sound, and if they have values and ethics that are aligned with ours. If the answer to these questions don’t leave us feeling satisfied, we let that opportunity go.

Is it marketable?

Some investments might seem like a great idea, but when you dig deeper you’ll see that there simply is no market, or no market appetite for them. Every project that Lighthouse is involved in answers a gap or a need in the market.

Is there funding?

Most importantly, we ensure that the projects we take on will have the necessary funding. This means that there’s a financier that’s willing and able to fund the project, on the terms and conditions that are acceptable to our own risk appetite.

We manage risk, but we don’t avoid it

All investment comes with risks, and as a funds manager we manage that risk by considering as many possible market environments and impacts as possible. We take responsibility for each of our projects, understand where the risks are and only choose those investments that can deliver reliable returns to our investors.

Ready to talk about your next investment opportunity?

Visit our Opportunities page, and get in touch to talk about how to invest with Lighthouse.

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