The Deal

1. Summary

We bought an 806 m² lot in Robina with a single-storey house and a converted-garage granny flat for $1.203M ($1,290,668 all-in). We are spending about $356k to renovate it into a 4-bed home plus a self-contained 2-bed retreat, with a restored pool, deck and glass fence. With holding and selling costs, the property has to sell for $1,762,153 for the four of us to get our capital back. The market today says $1,575,000 at P50 and $1,800,000 at P90. The "$2M mission" recorded in the minutes of 5 Aug is our shared ambition, and it deserves the same care as every other number on this page: it has to be reconciled in writing with the scenario ladder below, either as "P90 $1.8M with a product premium" or as a scope that earns the extra and passes the 2.0× ratio.

2. Structure and funding

• Thrive One Trust — the asset sits in a unit trust dedicated to this deal.Trustee: ThriveCo One Pty Ltd. Single Trust account (CBA) for every dollar in and out.Trust 01
• Four equal partners — Rei, Rod, Jean and Marcos.1/4 each of every capital contribution, 1/4 each of the distribution. Capital enters as investor loans, not units.25% each
• Pepper Money loan — $962,400, interest-only, LVR 80% of the purchase price.Actual debit $5,816.48 a month. Interest-only for 12 months to ~10 Jul 2027 — the Mar 2027 exit sits inside the IO period.$962,400 · 74.6% of all-in
• Equity at acquisition — $328,268 in cash from the four partners.Phase 1 was pari passu: 4 × $85,000 at settlement.$328,268 · 25.4%
• Investor loan agreements C3a–C3d, v3 — one per partner, same terms: 6% p.a., unsecured, pari passu, commitment limit $185,000 each.Pending signature by the four. Terms and open items: Governance.pending signature

Pepper's personal guarantee is given by the three local partners (with their spouses), jointly and severally; Marcos, as non-resident, is not a guarantor. Consent from Pepper is required for works, change of use and changes to the trust — see Governance.

3. Acquisition — all-in $1,290,668

Every line reconciled to the Trust bank statement (base zero, 17 Sep). The buyer's agent and the registration fees were missing from earlier break-even ladders — they are in now.

Funded by Pepper Money $962,400 + equity $328,268. Of the $340,000 the partners put in for phase 1, $11,732 was left over for the works.

4. Holding costs — $6,594 a month · $1,522 a week

Holding period 10 Jul 2026 → ~10 Apr 2027 (9 months). Rates, water and power were not in the original model and are now budgeted (D38).

Every extra month past March 2027 costs $6,594 — $1,650 per partner. Every week of delay is $1,522. Holding is not inside the $270k renovation budget, but it is inside the break-even and inside what each of us contributes.

5. Bridge — Baseline $270,000 → EAC $356,084

Every change to the forecast carries a cause: price (quote above the allocation) · omitted from the baseline · new scope · contingency. BZ approved at G4 (5 Sep); MRF-2026-09-21 is the current forecast.

• Baseline budget (BZ) — approved at G4, 5 Sep$270,000
• Hamilton — granny-flat frame + bathroom, contract (P13)Price: quote above the P13 allocation+36,545
• Design & approvals — fees + design package (P14)Omitted from the baseline — falls with D45, see below+21,183
• Pool — real cost of the interior resurfacing (P10)Price+10,000
• Fire-rated wall between house and granny flat (P4)Omitted from the baseline+5,500
• Already overspent and paidP0 demolition/bins +4,670 · roof restoration +3,618 · misc on site +568+8,856
• Contingency consumedThe $16,000 line is gone; real contingency is now zero−16,000
• = EAC 17 Sep$336,084 · budget cover 0.80×
• Ducted air-conditioning — new system (D9)New scope, 21 Sep · order of magnitude until two quotes are in+15,000
• Pool surrounds (P10)New scope, 21 Sep · range $3–7k · must earn 2.0× in ARV+5,000
• = EAC · MRF-2026-09-21$356,084 · +$86,084 · +32% · budget cover 0.76×

By cause: price +51,783 · omitted from the baseline +26,683 · new scope +23,618 · contingency −16,000. The +$20k of 21 Sep is the $20k reserve in Call 1 — $5k per partner, spent only if approved.

Not yet in the EAC (watch list) → ~$390k

• Deck (P9) at JW's mid quote+$4.7k
• Removal of the existing floor (Flooring Focus recommendation)+$2–4k
• Rear deck (D35) — no drawing, no quotenot priced
• Patio cover+$15.6k
• Solar panel removal and roof make-good+$5–7k
• Joana (designer) — north corner + façade drawing+$1.5–4k
• If everything enters~$390,000 · break-even ~$1,797k

Rule agreed: an item only enters the EAC if it buys at least 2.0× its cost in ARV.

6. Break-even sale price and the ladder

In words: add up everything the deal costs — the all-in acquisition, the renovation, nine months of holding and $12,000 of fixed selling costs — then divide by 0.975, because the agent takes 2.5% of the sale price. That is the price at which the four of us get exactly our capital back.

Break-even = (1,290,668 + renovation + 59,347 + 12,000) ÷ 0.975. At EAC $356,084 that is $1,762,153. Each $10k of renovation adds $10.3k to the break-even — $2.5k per partner.

Result at the current EAC ($356,084)

• P50 of twin comps, no location premium $1,575,000 (Market · comps W38, 20 Sep)−$182k below break-even
• With location premium $1,700,000 (Market · 20 Sep)−$61k below break-even
• P90 $1,800,000 (Market · 20 Sep)+$37k above break-even
• Thesis $1,850,000 Model v4 — not a market ARV+$86k thesis

Results in the ladder are rounded to the nearest $1k from the formula above. The $1,646,541 break-even circulated on 5 Sep omitted the buyer's agent; the $1,732,557 of 17 Sep was at EAC $327,228.

7. Scenarios — Best · Base · Worst

Same acquisition and the same selling costs in all three; what moves is the renovation EAC and the number of months we hold. "Still to contribute" is what each partner still puts in, against the $185,000 commitment limit in the loan agreements.

Worst-case break-even is calculated with the page formula at 12 months of holding (~$1,817k); the ladder above shows ~$1,797k for the same $390k at 9 months. Best and Base use the ladder's 9-month holding of $59,347.

8. Sensitivity — move the three things that move the result

Sale price, renovation EAC and months of holding. The $12,000 fixed is the model's fixed selling costs (marketing, conveyancing and the like); the 2.5% is the agent's commission on the sale price — together $54,500 at $1.70M. Everything else is held at the current figures.

The calculator uses holding = months × $6,594, so it can differ from the ladder's $59,347 by a dollar or two of rounding.

Without the sliders — result at 9 months of holding

9. Exposure per partner

Hard money, equal, 1/4 each, always. Contributions to date are owned by Cash; the target and the limits are set here and in the loan agreements.

Contributions as at the CBA statement of 22 Sep (Cash · 22 Sep); Rei's figure includes $1,000 of 26 May still to confirm. source conflict noted in QA — the 21 Sep financial doc carries the 17 Sep snapshot (Rei 96,000 · Marcos 95,000 · total 388,500) and a still-to-contribute of $85,806 per partner on that base; the reconciled 22 Sep ledger is used here.

Capital calls are monthly on the 1st, equalised to a common level: Call 1 by Fri 25 Sep to $120,553 per partner, then 1 Nov, 1 Dec and 1 Jan — the calendar and the amounts are on Cash. Cash floor: never below $20k in the Trust account. Facility limit was $150,000 in the earlier C3d draft; v3 sets $185,000 for all four. source conflict noted in QA

10. Exit plan

Listing in mid-January, settlement in March 2027 — inside the interest-only period and inside the 9 months of holding in the model. Dates and weekly detail on 30 Days; the seller disclosure pack on Forms.

• Practical completion (PC) — the works finished and the site clean.Thu 4 Dec
• Form 21 (final inspection certificate) — the granny flat and fire-rated wall closed out by Apex.Fri 11 Dec
• Pre-sale building & pest — our own inspection before the buyer's.14–16 Dec
• Photography — after the pre-sale B&P, before the holidays.17–18 Dec
• Form 2 pack (seller disclosure statement) — title search, Form 23 (pool safety certificate), Form 24 (smoke alarms), council records, approvals. FormsDec
• Agent window R1 — Greg (Ray White TMG), Ju and Emma walk the site; no agency agreement until ~4 weeks before listing (decision of 30 Jul).site visits by 25 Sep · sign mid-Dec
• Listing / campaign12–14 Jan 2027
• Settlement / exit — proceeds: selling costs → Pepper → Trust liabilities → investor loans pro rata → 6% → net surplus.Mar 2027

Sale positioning: "4 bed + self-contained 2-bed retreat / dual living" — 197.25 m² of internal living area. Interest-only ends ~10 Jul 2027; a slip past March costs $6,594 a month and, past July, a switch to principal and interest.

Decisions that shaped the deal

• Purchase at $1,203,000 after the vendor came down $50k; contract 7 Jun, settlement 10 Jul 2026.7 Jun
• Capital: four equal cash contributions at settlement (4 × $85,000); loans pari passu at 6%.29 Jun – 6 Jul
• D5 — granny flat as a 2-bed + bathroom + kitchen + living secondary dwelling (53.88 m²). D8 — no garage; the driveway becomes the carpark.Jul – Sep
• "$2M mission" recorded as the partners' target — to be reconciled in writing with the scenario ladder.5 Aug minutes
• No agency agreement until ~4 weeks before listing; three agents heard first.30 Jul
• Baseline budget $270,000 approved at G4, in 15 work packages + $16,000 contingency.G4 · 5 Sep
• D34 — capital calls monthly on the 1st, equalised. D37 — one budget: approved $270k, projection = EAC. D38 — rates, water and power budgeted; ManCo advance formalised.17 Sep
• D9 — new ducted air-conditioning, two quotes by 2 Oct (+$15k). D39 — ensuite demolition as a written Hamilton variation. D40 — deck outside the pool barrier, deck × glass fence drawn before framing.21 Sep
• D45 — no full working drawings; run by workfronts with safeguards (Rei's technical drawings, Apex written scope, RPEQ Form 15, council search D24). Ratified at G5.21–23 Sep