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30k To Invest Need Advice for Off-Plan Investment

Discussion in 'Buying Overseas Property' started by Loki17, Oct 8, 2007.

  1. Loki17

    Loki17 New Member

    Hi All,

    Im a complete newbie to property investment and ive been doing a bit of research and reading all the good advice that is on this forum and others,
    I have 30k to invest
    Does anybody have advice on off plan developments, im initially looking for a quick turnaround , investing for no more than 12 months to raise some capital , does this seem feasible?

    Also are most off plan investments stage payments or can you deposit followed by full balance on completion?

    Any projects or agents websites to be recommended for this type of investment would be welcomed.

    Thanks!
     
  2. Mikeyv

    Mikeyv New Member

  3. wpcherts

    wpcherts New Member

    Hi Loki,

    I'm an agent who operates in areas round the global and am a newbie to this forum. Most properties available through us have the option to sell before completion but be very careful where you are buying and what stage of construction the development is at.....basically, I agree with Lisa 'ensure there is an exit strategy'.

    We have a 4*golf, spa & ski developement in Slovakia that may suit your needs a studio starts from under £50k, superb rental options including a 7% GRP for 3 years and
    VAT refund of 19%....really!! The payment structure is made up of 30% deposit and the rest on completion. The project is in a location which is experiencing significant inward investment, current tourism is all year round from either the local market or neighbouring countries.

    If you would like the full e-brochure or details on any other projects we deal with please feel free to PM me.

    Good Luck

    Anu
     
  4. Investy

    Investy Senior Member

    Loki the chances of you being able to sell - on to someone else for more in 12 months and cover the cost of fees, Bank transfer charges, lost interest on your money and Tax are very slim.

    I've been buying abroad for a few years and although people do occasionaly stumble into easy quick profits, it's extremely hard to predict.

    ANY agent promising you easy money will soon make a fool of you my freind, so tread very carefuly.

    Most off- plan properties are now very hard to flip, the market is asturated and buyers want to be first in on new developments rather than pay you a profit.
     
  5. Investy

    Investy Senior Member

    Loki another great way to 'test' just how much confidence an Agent realy has in a new development is to get them to confirm in writing they will be happy to handle the resale........watch em run.

    Property showrooms did a massive push on certain developments, telling investors how capital growth over the next year was likely around 40%, yet when it came to resales of those same off - plans they didnt want to know.
     
  6. The Soup Dragon

    The Soup Dragon Senior Member

    Hi Loki

    Tend to agree with what Investy has suggested. If you want in and out in a 12 month period then off-plan probably isn't the way to go.

    I suspect the exit strategy is going to be key for you given you want to get in and out quickly. Established markets have re-sale markets, but they are less likely to see the sort of gains you want over a short time period. If getting in and out over a short period of time is key then guaranteed returns that some developers offer in return for funding may be the best option for you. There are emerging markets where the developers either can not get funding or have to pay extremely high interest rates. Some are happy providing you with a guaranteed return of 20%+ pa in return for the funding. This might sound too good to be true, but there are companies that do it. Here's how it typically works and how the risk for you can be reduced.

    Developer can obtain land and build apartments on it for say £5m. They know that sales should be about £10m and that they will receive about £3m in staged payments over the construction period from those buying the apartments. That leaves them needing about £2m funding (£5m total costs less £3m in staged payments prior to completion.) If the developer is large enough they can foot this £2m themselves, but they know that is £2m of their money tied tied up. If they tie less of their own capital up they can take on more projects and potentially make more money. These developers often use the land they are acquiring as security for the investors money. This reduces your risk. They also typically offer 20%pa in interest plus your stake back at the end of the build period.

    This is very much a hands off way of investing - once you have undertaken your due diligence. If going down this route then look for a track record. If the developer can't show that they have successfully done this before then walk away.

    This sort of investment isn't for most people, so I won't add any more unless you say it could be of interest.
     
  7. Investor MAX

    Investor MAX New Member

    Buying Off Plan without the cash...

    Hi Loki,

    Buying off plan property is a great way to raise cash. I recommend to invest in a great, established market with proven capital growth, resale and rental market. I represent a company which currently operate in Portugal, rated no 3best place to invest by channel 4. Poland and Romania tops the list but I would still question the resale and rental market there. Algarve has a massive touristic market which is growing steadily. Investing in a quality off plan development at an early stage is predicted to make a minimum of 20% capital gains. With the company I represent you can get a free deposit loan which is payment free until completion (we pay the interest) Should you want to sell the contract on before completion you will avoid any government taxes. This is without any cash down, all you have to do is qualify for a mortgage and then you can go ahead and choose an available development.

    Most developments need 20-30% deposit until completion either one off or staged. If you want to read more about what our company can offer, please log into the website.

    Best of Luck,
    Lissy
    Welcome to Investor MAX - The ultimate Property Investment Opportunity



     
    Last edited by a moderator: Oct 10, 2007
  8. The Soup Dragon

    The Soup Dragon Senior Member

    Investor Max.

    Interesting having a look on your site to see what you offer. I am not sure of all the basics in your offering, so correct me when I go wrong!

    Deposit for off-plan property is covered by a loan. Person investing does not pay any interest on the loan. Your company pay that. On completion, the amount borrowed will be outstanding.

    Idea is to sell on your purchase agreement to another investor prior to completion. In such an event, the other investor will pay the outstanding loan and balance at completion. They will also pay you the appreciation (difference between price you bought in at and price you sell at.) When does the second investor pay the first? Is it when taking over purchase agreement or at completion?

    I appreciate your remuneration comes from sale price and is paid by developer. It more than covers the legal expenses, interest on loan, etc. I am assuming that will be paid when 30% loan is taken in order that it can cover interest on loan etc.

    Your site refers to it not being the norm to be able to sell prior to completion. There may be places this applies for, but there are plenty where it does not. It is the norm to be able to flip prior to completion in the countries I have considered. As with these other countries, you run the risk of not being able to sell on purchase agreement at a profit.

    Your offering really isn’t too different to normal off-plan purchasing, it’s just that expenses are back-loaded for the investor. (I can this will appeal to many.)
     
  9. Investor MAX

    Investor MAX New Member

    Our investment plan works like this..

    ;) Hi Soupdragon,

    I will explain the whole process of buying property through our company in very simple terms:

    A) Our bank will pre approve the client for a 100% mortgage based on the
    purchase price which should be about 20-30% below market price.
    B) The client will choose a property from available off plan projects which fits
    his criteria, we offer projects with at least 12 months to completion but
    the ideal projects have 18 months or more to go.
    C) Once the property is chosen the 30% (or less) minus our commission will be
    forwarded to the developer. The bank covers the cost with an unsecured,
    interest only loan until completion. We will pay for all the expenses before
    the completion or when transfering the assignable contract (what is
    important is that an assignable contract has been issued and not a
    standard contract which doesn't allow selling before completion). The
    lawyer pays all the bills before handing the profit to ourselves.
    D) Client holds on to the property as long as he likes. Let's say he bought
    the property 18 months@200.000 euros prior to completion and sells it
    15 months later@250.000 euros. The buyer will either take over the
    interest payment until completion or settle with the bank for the 60.000
    upon purchasing the contract. The vendor will receive the profit@50.000
    euros and can either reinvest it immediately to avoid capital gains tax or
    pay the 25% tax and walk away with a profit of 37.500 euros. The
    important thing to remember that any profit is generated without having
    to pay any cash up front.

    E) If the client wants to complete on the property he needs to fund the IMT
    and the stampduty which in this case should come to about 7% of the
    purchase price (14.000 euros). The bank values the property shortly
    before completion lets say@260.000 and will approve mortgage@208.000
    euros and the deposit loan is settled through the mortgage. This mortgage
    is offered on a 5 year interest only basis. The client can cover these
    costs in the very healthy rental market which we offer. Should he
    then want to sell let's say after 3 years time@10% growth/year@346.000
    euros@146.000 euros profit-25% capital gains tax-14.000 IMT &
    stampduty (deductable) he walks away happy chappy with 95.500 euros
    to have fun with....Is this a good deal or what? If you want to check my
    calculations you may do so, these figures are still realistic on off plan
    quality projects in Algarve as well as the Silver Coast.

    Please let me know if you have any more questions.

    Best Regards



     
  10. RGPLC

    RGPLC New Member

    Hi Loki,

    We are marketing fantastic off plan property in Tunisia which is certian to become the hottest destination in overseas property in 2008.

    Reason for :
    Eyesabroad are proud to launch a brand new overseas property market, Tunisia.

    The time to invest in Tunisia could not be better. Considered to be the one of the most stable countries in the Arab speaking world, and certainly the most politically and economically stable country in all of Africa, Tunisia is a founding member of the World Trade Organisation and has a trade association agreement with the EU. The Tunisian people have strong links to Europe and consider themselves to be more European in nature than African or Middle Eastern. Within two hours flight of the capital, Tunis you are able to reach most established European capitals whilst flight times to the UK are just under 3 hours. A stable currency and consistently low inflation levels below 3% have helped to place Tunisia in a great position to benefit from direct foreign investment which is currently pouring into the country.

    Politically and Economically, Tunisia is the fastest growing nation in its region, far ahead of its main competitors, Morocco and Egypt, both countries which have done extremely well in the overseas property market in recent years. We have compiled a lot of information on our website, which will enlighten you further into why you should be promoting this market and why the time to invest is now.

    With prices starting from €26,000 for a beachfront apartment offering world class spa and golf facilities, and yet only being 3 hours away from the UK, investment potential in this country is second to none in today’s property market.

    For further information on this exciting market just send me a message or reply and i will furnish you with all of the information you may need to pursue.

    Rgds
     
  11. Lysos

    Lysos New Member

    Loki17,

    You say you've done a bit of research; obviously not a lot, or you would anticipate that such a naive post would only serve to have agents falling over themselves to sell you something unsuitable.

    In today's uncertain financial climate off-plan is a very risky strategy. Much better to go for a resale - in every market there are off-plan investors desperate to find a buyer. Which would you rather be - the desperate seller, or the canny buyer ?.
     
  12. andyintheworld

    andyintheworld New Member

    I think Lysos is spot on here Loki - you are just going to get a million and one "ads" in reply to your post.

    I think you can still make money buying off-plan but the timeframe is what you need to be worried about.

    Who is going to buy it off you? Are you purchasing the last phase? If not, then again, who is going to buy your property upon completion if there is a building sit next door and the company is still selling off plan?

    I can sell you a property tomorrow for 8grand - not even off-plan - brilliant! And I can give you a nice glossy brochure telling you why you should spend all your money on these properties.
    The country is up and coming, its great, 60 new airlines are about to start flying in etc.
    But once your money is down, there will simply be no-one to help you get it back - off-plan or not. So you have to do your research and lots of it.

    If you dont know what you are doing think of it this way:

    I am a financial advisor and I have lots of offshore funds. Id like you to put all your money into the "Euromaxx emerging markets fund" because its absolutely brilliant and you cant lose... and I get 10% commission.

    Would you put your money into an investment fund you know nothing about?
    If you answer no - which I hope you do - then ask yourself - why you would put your money into an illiquid property investment in a country you know nothing about?

    You would want to know what the hell this fund is - how does it compare with others? History, performance, S&P rating, etc etc

    Compare the two and think hard - are you happy risking your money in something you know very little about that has absolutely no guarantees and is most likely being sold by someone who knows almost as little as you?
     
  13. The Great Gatsby

    The Great Gatsby New Member

    So what did you end up doing? You posted your enquiry about a year ago so i'm guessing you have already made your mind up. I'm an agent who is new to the game so am interested in what people ended up choosing to continue my learning curve.
     
  14. agentkhoo

    agentkhoo New Member

    Hi The great Gatsby, you said you're new ot the game, as in new to real estate brokerage? Which part of the world are you? Do you have a specialisation?
     
  15. The Great Gatsby

    The Great Gatsby New Member

    Hi. I´m based out of Spain so have experience in that market but started international property about a month ago. We specialise in Brazil at the moment but offer developments in I believe 14 countries. We move to where ever the hot spot is. How about your self?
     
  16. agentkhoo

    agentkhoo New Member

    We're based in Singapore, and we mainly do Asian property. We've also just started doing projects outside of Singapore this year.
     
  17. The Great Gatsby

    The Great Gatsby New Member

    I take you are talking about La Voilier =. Who do you work for? There are very valid reasons for this question
     
  18. kusadasisun

    kusadasisun New Member

    37K pounds can buy you a 2br apartment almost complete with a swimming pool, gym, kids playground, public transport access to the town center restaturants, beaches, bars in Kusadasi. You can rent it out to locals for a stable 12 month income or to your country fellowman for holidays. In Kusadasi swimming pools usually operate from June to October whist the daily highs stay at/above 30 degrees. Beached can be enjoyed from Easter till November. Over 300 days sunshine. Property market is quite slow these days as property sales to foreigners have been suspended since March, expected to resume in a months or so. So it is time to buy now if you're also targeting capital growth.
     
  19. Blc

    Blc New Member

    off plan investment

    Off plan investment Fortaleza Brazil

    100% finance

    From 400 euros down

    Followed by 36 monthly payments during construction @ 0% sell any time before completion.

    Luxury city beach apartments.
     
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