**Overview** * 1950’s brick home in the blue chip Ballarat suburb of Soldiers Hill * 2 bedrooms, 1 bath and undercover parking * Updated country-style kitchen with modern appliances and gas stovetop * Well-maintained garden and landscaping * Character features internally with great owner occupier appeal * 5 minute drive or 20 minute walk to central Ballarat CBD and amenities including train station, supermarkets, shopping and cinemas * 8.07% annual compound average growth over the last 20 years (source: CoreLogic SA2 Ballarat-North index) * Property was purchased with 27% gearing **The Location** Soldiers Hill is a suburb just north of the Ballarat CBD. It is considered to be one of three true blue chip suburbs of Ballarat. Soldiers Hill is a heritage suburb that is characterised by Victorian-era architecture with ornamental verandahs and cast iron features. The suburb is popular with families and independent youth, due to its proximity to the Federation University Australia. The property is 5 minutes’ drive or a 20 minute walk to the Ballarat CBD and amenities including a train station, supermarkets, shops and cinemas. Improved transport links between Ballarat and Melbourne has made Soldiers Hill increasingly popular, with more train services and line upgrades set to be completed in 2019. The current commute between Ballarat and Melbourne is 1 hour 30 minutes, making it an appealing option for buyers priced out of the Melbourne market. **The Investment Case** This property was purchased off market, with contracts exchanged on 13 August 2018. The property was acquired for $401,000 and will include 27% gearing ($120,300). Acquisition costs (including stamp duty, legal fees and buyers’ agent fees) are estimated to be $43k and will be subjected to linear amortization over 5 years (see Capital Returns Tab for a breakdown of Acquisition Costs). In addition, an estimated cash reserve of $6k is being raised for the investment, giving a total Trust value of $450,300 and an Initial Brick Price of $33. If the Acquisition Costs are above/below estimates, these costs/surpluses will be funded from/added to the Cash Reserve. A mortgage for $120,300 was used in financing the initial purchase. The mortgage is a 30 year loan, at a variable rate of 4.54%, with the first 5 years interest only, and the following 25 years principal and interest repayments. We will continue to monitor interest rates throughout the life of this investment and act in the best interests of Brick Owners. At purchase, the property was occupied by the owner and the owner will continue stay on as a tenant for 18 months at an agreed market rent of $310 per week. This provides a forecasted gross yield of 4.88% and net yield of 1.46% (paid monthly), after expenses. A property management team has been assigned to this property as detailed below. As of July 2018, Soldiers Hill had a historical annual compound growth rate of 8.07% per annum, based on the last 20 years (source: CoreLogic SA2 Ballarat-North index). Past performance is not an indication of future performance. Fluctuations in Brick Price will influence the effective return, and you should regularly refer to Returns and Valuation information on the summary page for the latest data. **Property Management** We use a third party managing agent to manage the properties on behalf of Brick Owners. Brick Owners won’t be required to take an active part in managing a property and will not be consulted for any decisions relating to a property. We will operate within the management agreement framework for all properties so that Brick Owners are left only to manage their portfolio. We pro-actively manage all BRICKX properties to ensure that they are, as much as possible, consistently tenanted and kept to the highest standards to protect Brick Owners’ investment, both from a capital and rental income perspective. There may be periods of time where a property is vacant, and expenses during this period are covered by a contingency fund that provides over 3 months of cover (this is for expenses only and not for the payment of any net rental income to Brick Owners). We have also put in place procedures to ensure that before a lease expires, the tenant will be asked to confirm their position with regards to the tenancy agreement. If the tenant does not sign a new lease within a certain time, the property will be advertised for lease. The rental price may be slightly reduced in order to attract a new tenant if necessary. We’ll always seek to achieve a balance between the forecast yield and market conditions to minimise the risk that the property is vacant for extended periods. **Important Notice** *Forecasts may not be achieved and are not a reliable indicator of future performance. The advice provided to you is general advice only. It’s been prepared and presented without taking into account your personal objectives, financial situation or needs. Before making any decision in relation to BRICKX or any products offered by BRICKX you should read the Product Disclosure Statement (PDS) and consider whether BRICKX is right for you. BRICKX products are issued by Theta Asset Management Limited (ABN 37 071 807 684) (AFSL 230920) (Theta). Neither BRICKX nor Theta, guarantees any rate of return or the capital value or return of any money invested. Past performance referred to is no guarantee of future performance of the relevant financial product and is not a reliable indicator of future performance.
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