G
globalinvestor
New Member
anybody looked into mina casa? the affordable housing cheme?
any success stories?
thanx
any success stories?
thanx
So you are financing the developer to help build a MCMV development, not actually buying a unit which you will later have to resell? That sounds more plausible with regards to actually getting a profit back as long as the development actually gets built. Check what people tell you. If they say they have done developments in the area before - double check that they actually have delivered developments and are who they say they are...Hi I have seen 3 different investment opportunities for UK investors into the MCMV program. Minimum investment levels start at approximately £25,000 (one of the three requires £85,000) and are in the form of an investment fund or direct financing to the developer. Returns offered vary from 18% per annum to 35%. Has anybody come across these offerings? I met and discussed these opportunities with the promoters but I cannot make up my mind and decide whether to go for it. Has anybody here come across these or similar opportunities?
Rule of thumb - if a deal looks too good to be true... (you know the rest).Hi I have seen 3 different investment opportunities for UK investors into the MCMV program. Minimum investment levels start at approximately £25,000 (one of the three requires £85,000) and are in the form of an investment fund or direct financing to the developer. Returns offered vary from 18% per annum to 35%. Has anybody come across these offerings? I met and discussed these opportunities with the promoters but I cannot make up my mind and decide whether to go for it. Has anybody here come across these or similar opportunities?
You can't receive pm's either until you have 5 posts I'm afraid - even from a moderator so I'm afraid that wouldn't work eitherthanks JM for you reply. I can't agree more with what you say. the one opportunity you describe sounds similar to one of the three i have looked at, and surprise surprise they are those offering the best returns. the other two seem more plausible and serious. I would be very grateful if i could PM you and name these opportunities to you. You might be able to give me a straight forward answer. this is my 2nd post so i suppose i am not allowed to send a PM yet, in case you could send one to me and i could reply to that, i would be very grateful. Thanks,
It is possible - say for example the developer doesn't have access to those Brazilian millionaires but already has contacts and a proven track record with to overseas investors.Rule of thumb - if a deal looks too good to be true... (you know the rest).
Why on earth would a Brazilian developer be looking to buy funds from abroad at a rate much higher than he can find here???? I know any number of Brazilian millionaires who would jump to lend money at these rates!
And then the developer has to pay the agent's fees as well, so it simply does not make financial sense, does it?
You know your business better than I do, but can you offer 35% returns per year for 2 years? Hence my comment - if it looks too good to be true, it probably is.It is possible - say for example the developer doesn't have access to those Brazilian millionaires but already has contacts and a proven track record with to overseas investors.
And funnily enough, that's the major hurdle we are coming up against at the moment - people applying the rule of thumb to investments which look too good to be true... even if they are true. Considering the state of most economies at the moment - even a bad investment in Brazil can offer much better returns than would be believable at home. It all depends on what we are comparing the returns to - the current European reality of achievable returns or the current Brazilian reality of achievable returns.
Yes, often quite a lot more than that even but as a Joint Venture - aka an investment funds finances the build in exchange for a share of profits (keeping in mind that dividends are tax free in Brazil). We tried lots of different ways to involve the individual investor (aka selling one unit and then helping them sell on to the local market and because of purchasing costs, sales costs and tax it simply wasn't viable for the investor on MCMV developments).You know your business better than I do, but can you offer 35% returns per year for 2 years? Hence my comment - if it looks too good to be true, it probably is.
1st option: Just from what you've said I can see a multitude of warning signs however perhaps the most worrying is the maths (both regarding the profit and the timings): After you buy a plot of land, it can take more than 12 months just to get the licenses and start construction so for someone to offer a 12 month return before they have even bought the land would worry me. But even if there is a logical explanation there - there are several other concerns - I know of all well known developers in Natal and I don't know of anyone who would even consider getting hundreds of "gringo" investors to finance a development - "gringos" are normally considered "problem investors" as they ask a lot of questions, normally get lawyers involved and complain a lot more than the locals.As no PM is allowed yet for me, i'll give a brief description of the 3 investment opportunities.
First investment is approx 25k, 12-month horizon, development af 100+ houses in Natal, 20% return. If all goes well, the house is sold by the developer and I will get cash. If it goes wrong (no demand for the houses) I'll end up with the keys... I have 2 further concerns:
1. Part of the proceeds from the investment goes to the land owner, which means the developer does not own the land. Should I be worried about it?
2. He claims he's a well known developer in Natal, so I asked why is he looking for £25k from a small guy like me? His argument was that a well divesified client base is key to the long term health of his business. Which I can buy into, but still he should have also a solid base of wealthy individuals who can regularly lend him £500k to £1mio, while it looked he was struggling to raise the money for the investment.
2nd Invstment. Need approx £85k. Pooled investment on large scale project, which returns 70% in 2y.
3rd. Investment vehicle in the form of a fund, looking to raise £25mio (25k min investment) and then invest is a series of MCMV projects. 18% pa non compounded for 3y (locked in). Most transparent of the 3, wealth of info, lowest return (costs associated in invest in a fund I guess).
I try to keep an open mind and look at the investment from all the angles. Given my very limited knowledge of property development in Brazil, I am looking for advise from experienced professionals.
I know it's little info, but any view?
OK - thanks for the explanation, I understand now. I was looking at it from the point of view of a simple investment, when the developer and then the investor would need to make profit.Yes, often quite a lot more than that even but as a Joint Venture - aka an investment funds finances the build in exchange for a share of profits (keeping in mind that dividends are tax free in Brazil). We tried lots of different ways to involve the individual investor (aka selling one unit and then helping them sell on to the local market and because of purchasing costs, sales costs and tax it simply wasn't viable for the investor on MCMV developments).
Exactly which makes me worried about option 1 and 2 which langbarb has been offered - 3 might work as it would be a profit sharing scheme.OK - thanks for the explanation, I understand now. I was looking at it from the point of view of a simple investment, when the developer and then the investor would need to make profit.
What you are saying is that these returns are possible if the investor and developer are in partnership as a joint venture, thus sharing all profits?
Typically developers here seek to make at least 30%, and it does not work if they then have to make the same on top for the investors. But as a shared profit scheme, the maths works!
If it is that one then unfortunately it probably won't work.The problem with option 3 is that it is shared equally between 3 parties, one being the investor.
Option 3 is the one I emailed you about yesterday John.
100% MCMV in the states of Ceara and Piaui in the Northeast. 8000 units in process.anybody looked into mina casa? the affordable housing cheme?
any success stories?
thanx
What have you not seen Bob. Our company has history going back to 1992 and is Gericada status which is only achievable with high monthly turnover and a 100% clean record within Caixa ( the bank ).According to what I have seen, the company has very little previous experience in this area.
Regards,
Rob
Please answer my question first....because "according to your knowledge we have done very little" Please refrain from making comments until you actually KNOW. We have completed nearly 3800 in Piaui in a joint venture 0-3. We are in process of starting the next stage which only commences in Feb 2011 PAC2, approvals and project already approved ok.How many units have you delivered in cat 0-3 MCMV developments so far?
Regards,
Rob.