Private Eye - Overseas Market Detective Part 4

Continuing my research into bricks and mortar ownership and “Pension in the Sun” I have evaluated several business models & strategies which would allow an alternative tangible investment to be used as a pension fund.

I’ve looked into Commercial, sale & leaseback and Residential deals.  The results prove to be a very interesting read, if you like me have wondered how so many have made it rich in Real Estate, you will truly be amazed at the findings at how simple it is to save and get such a great end result.

Far more fun and exciting to be a homeowner overseas and use the Pension Fund in places like St Lucia or Cape Verde!  I am still astounding from the concept of Sale & Leaseback these days, it’s literally 100% lending with very little capital from the investor at outset.  Everything to gain and little to loose, I’m very pleased to report if you thought that this wasn’t for you then just read on….

I’ve found that Ciaran Maguire Group have developments in both St Lucia and Cape Verde and that they provide the Sale & leaseback Scheme.

Types of Business Models for a Bricks & Mortar Pension

Considering which type of property invest is the most important consideration of your decision to become a property investor.  You can invest in commercial, semi commercial and residential properties.  Your decision may lie in the deposit required. 

Overseas properties can be bought on a sale and leaseback agreement, and the developments these days require very little capital as a deposit...

50% deposit required

Commercial property such as manufacturing plants factories and offices, have higher returns for rental income and capital growth, however has a higher level of risk due to its’ need for high capital deposits, higher losses on non tenancy and is more likely to be effected to the economic climate.

Budapest (Hungary)

Strong opportunities in commercial sector, particularly office and warehouse as it becomes regional business hub. Residential property severely undervalued (per sqm

60% deposit required

Semi commercial properties such as Student Lets, blocks of flats and some shops, require specialist lending and regulations and have past performance of higher critical yields on rents, due to the individual tenancy agreements or higher rents charged with a shop front and residential space.

This can be done as a physical assets or through a fund.

http://coralportfolio.com/

30% deposit required

Residential properties can be bought on a Buy to Let basis to rent out to your tenants privately or through approved letting agents. In experienced landlords suffered financially with the downturn in value of the property, loss of tenants and over zealous lending gave up to 90% since 2003-2008.

The maximum lending in 2012 is 75% but with lender calculations based on valuation to likely rental income this can fall to 70%.

http://www.mortgages.co.uk/buy-to-let/index.html

Popularity over the last few years has been the overseas purchase, and with house prices in most European countries still recovering from the over inflation, Emerging Markets are being sort after for early purchase decisions.

Holiday home freehold investments provide an opportunity for a rental income immediately which may cover mortgage payments and future capital in a country which may provide a home when you retire, with better tax breaks than your country of origin. They are not restricted to overly regulated lending bank policy and developments ask smaller capital deposit of the investor.

Sale & Leaseback

This strategy become popular in France, and historically required a 30% deposit for the property.  There is normally a guaranteed rental paid on a monthly basis which covers the mortgage payments and this way the property would pay for itself and at the end of the term, you have a freehold property.

http://www.ehow.com/about_6681583_sale-leaseback-agreements.html

100% Lending

·         One particular developer CiaranMaguire Group called Palm View Resorts in St Lucia & Cape Verde has the following business model

·         6k Euro Reservation Fee

·         The apartment/villa is purchased at a 70% mortgage

·         8% rental guarantee covers the mortgage payments

·         The apartment/villa is purchase fully furnished with a refurbishment package every 3 years

·         30% developers loan is gifted at 0% and paid back monthly

·         4 weeks a year useage

This means that the investment is completely leveraged, as an investor it is low risk as the returns are guaranteed and the amount  required for the purchase is minimal at 6k Euros.

www.palmviewstlucia.ie

www.ciaranmaguiregroup.co.uk

Private Eye Overseas Market Detective Part 3

How Investors buy Overseas Properties for €6K

Suitably Impressed by my Market Detective skills, I still wanted to uncover what the best form of investment could be for an Executive in Dubai.

 

With so many distractions facing those that live in Dubai, I found that Executives are very cash rich on a monthly basis, don’t have lump sums in the bank, but are very good at paying commitments.

I interviewed Ben Mulvey, 22 yrs old Executive from Dubai who purchased a studio apartment on Palm View Resorts Cape Verde. 

Ben revealed he is investing a mere 1150 Aed per month.  He said “Forget about a pension in the sun, I don’t have to wait until I’m old to enjoy this, I’m on the property ladder, In 7 yrs, I’ll own more than 35% and I can still enjoy 4 weeks usage AND If I sell back two of my weeks per year the apartment pays for itself!

So financial adviser hat back on and doing some number crunching the figures actually did add up.. I followed up on a new resort in St Lucia Caribbean with the same formula to purchase and will be looking at that in the next story.

Ben Mulvey Interview February 2012.

1.       Why purchase an apartment overseas as your First Time Buy?

The problem with buying a property is they wanted a 20-30% deposit.  The apartment Palm view Resorts in Cape Verde required 6kEuros which I saved up within a matter of months.

2.       How did you purchased without the 30% deposit?

This is gifted by Ciaran Maguire Group who is the developers and  this is a loan and paid back at 0% monthly.

So everything you pay back is capital.

3.       How about your mortgage payment on the Palm View Resort?

The banks lend a 70% mortgage and this mortgage payment

Is covered by the 8% rental return I will be paid each month.

4.       Do you receive more income than the mortgage payment per month?

Yes, the mortgage is capped at 7% and I will receive 8% which is

90Euros more per month.

5.       What do you do with the surplus per month?

Naturally it goes towards paying the 30% Ciaran Maguire Group loan at 0%,

so my commitment each month is 1150aed.

6.       What happens if you sell your 4 weeks usage back into the Palm View Resort?

I will receive over €1500 per week and I’m going to keep this in my account

so the investment can actually look after itself, or I can pay the mortgage off early.

7.       What about your contract?

The Palm View Resort apartment comes fully furnished with a 5year rolling contract

I can also sell the apartment whenever I wish.

8.       What was the deciding factor?

The Developers’ Company Ciaran Maguire Group is actually going to be the Five Star Resort owner.  When I’d researched and seen the tourism figures, with the supply and demand, I felt that not only was I going to be a property investor, I also had another industry driving the rentals for my Freehold.

Private Eye Overseas Market Detective Part 2

How to Invest Overseas
My further studies on “Pension in the Sun” transforms me into Market Detective. So intrigued by the Sale & leaseback agreements I thought I would Follow one of my Top 5 tips and do some Real Live Market Research and interview those investors which have already bought on these resorts offering schemes such as the ones from Ciaran Maguire in Cape Verde & St Lucia.

The Full interview find out how Mr & Mrs R Watkins from London, secrets to success in purchasing property overseas. What their intial concerns were, What made them purchase on their development at Palm View Resorts and How they’ve raised the finance..

Mr & Mrs R Watkins purchased on Palm View Resorts Cape Verde with the Ciaran Maguire Group.  They were one of the first investors on the project and have travelled to the site in Boa Vista many times over the past 3 years.  Ciaran Maguire the President and Chairman of the company reveals that the couple are part of the investors who invested on Block A with full sea views.  Their investment into the Palm View Resorts are like many part of their retirement plan.

1.       What made you think about wanting to buy abroad in the first instance?
We wanted to look at a holiday apartment initially as an investment and then for somewhere we can enjoy during our retired years.

2.       What was your first objection or second though about the purchase
 We initially had some reservations as it was our first time to buy overseas so naturally there were concerns but we made sure and spent a lot of time searching for the right property in the right location and with the assurances that would allow us to invest with peace of mind.

The Sale & Leaseback agreement allowed us to put a minimum 6K Euro reservation fee down, rather than a 30% deposit.  This meant very little capital was at risk and after all of our searching and our visit to the location Palm View Resort Cape Verde was the only development for us.

3.       How did you overcome those concerns and objections?
We went to see several developments and we ensured that due diligence was done.  We researched Cape Verde as a country and we’re very happy with the plans for Boa Vista.  The figures in the Ciaran Maguire Group feasibility study were impressive and 382,00 tourist had visited the Islands in IMF reports in 2010.  We took on board information on the internet we are also aware of the mis information being posted on forums and blogs etc so we did our own research allowing us to make a fully informed decision.

We also studied the figures very closely and the 8% rental guarantee per month covers the 70% mortgage payments, which means that the apartment is paying for itself.

4. What about the 30% deposit normally required?
This is conveniently paid back to the Ciaran Maguire Group developer at 0% per month.  This model was the brain child of Ciaran Maguire and specifically gave us security in the resort. It means that our capital stays in our bank account and the money paid back every month is capital.  In five years time we will own 30% at least outright and what has been paid off the mortgage.  I don’t know of anywhere else that could repay the deposit back at 0%!

5.       Why did you choose Ciaran Maguire Group developers?
 We choose CMG because, apart from the assurances we had, they have very unique payment terms to ensure you can invest with peace of mind. Ciaran Maguire is also a very dedicated head of the company, and very much hands on with the business. Having visited Boa Vista many times its evident the presence Ciaran Maguire Group has in the island as they are one of the largest companies in Cape Verde, also and this was probably the main reason Palm View Resort is not only being developed by Ciaran Maguire but for they are assisting with projects on the entire island and they are heavily involved with working with the local community

In fact on our most recent visit to see the progress of our apartment we were invited to a charity event for the children of Boa Vista and Ciaran Maguire Group were the main sponsors, we now enjoy a great relationship with Ciaran Maguire Group, and we have made friends for life with some of the staff in Ciaran Maguire Group.

5.       What is so special about Palm View Resort?
It ticked all the boxes for us, its beach front, it comes fully furnished which will be renewed every three years.  It’s a very high end luxury development and it has all the onsite amenities on the Resort so when our time comes to retire we will do so in complete luxury surroundings.  Palm View Resort will be run West Paces the Management Arm of the Ritz Carlton.  Therefore our investment will be run by a blue chip company and you are not relying on a small rental business in the chosen country.  Palm View Resort offers everything we could ask for and with the unique options that are available with Palm View Resort our friends and family can also use our apartment so for us its more than a luxury holiday home its a luxury lifestyle for us and our children.

6.       How do you feel now?
We are so excited, having recently returned from a holiday in Boa Vista and checking on progress we are very much looking forward to getting the keys for our new apartment in 2012.  When I think back of how concerned I was initially about buying overseas and how happy we are now, we need never have worried.  I must say the entire process was made easy by Ciaran Maguire Group and we have already booked our tickets to come back to stay in our apartment for the first time early next year.

Private Eye – Market Investigator

Private Eye – Market Investigator

I keep hearing about people using property as an alternative to the old-fashioned retirement fund.

So I thought I should do my own research of the worldwide property market. Please click here to download my appraisal of potential ‘bricks & mortar’ pension funds.

I wanted to find out if there was another market that offered the same potential as my favourite investment, Cape Verde. The combination of a low SqMtr rate and the potential growth of the tourist industry on the islands is what makes it so attractive to me.

The market that caught my eye is St Lucia in the Caribbean, as the government is welcoming tourism and property development. One tip is to look out for developers offering a sale and leaseback agreement, which allows you to raise money from the sale of the asset, whilst retaining the use of the property as revenue generator.