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
[email protected] euros prior to completion and sells it
15 months
[email protected] 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
[email protected] 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
[email protected] and will approve
[email protected] 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/
[email protected] [email protected] 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
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.)
