At our seminar, I sat through a presentation by Colin and was deeply impressed by the investment on offer. I asked Dave and Jeannie for more information…
‘Last Saturday’s event featured a very interesting presentation about the investment opportunity in German ‘listed’ buildings. It was also very useful for three members there who have already invested in this opportunity as they were able to confirm that their experience matched with what was being said and they have received their returns as
this investment matches with the theme of the event, an ‘unregulated’ investment which is marketed in a regulated manner, in line with Financial Conduct Authority guidelines. It is also full of ‘due diligence’ information and also identifies the ‘risk’ areas in the investment.
On the plus side, it is an investment that has a five year track record and has completed over 200 projects during this time period. So, it’s not a speculative opportunity, it’s a very profitable business.
To give an outline of what the German ‘listed building’ market is about…the German Government offers significant tax breaks for the renovation of listed buildings. To qualify as a listed building doesn’t just mean that it is of architectural importance, it can also mean that the building is in an important location, e.g. in a city centre, that would benefit from its refurbishment. Particularly in what was East Germany there are thousands of such buildings in the city centres, standing derelict, whilst at the same time there is a need for good quality residential accommodation in these city centre locations. So, the end owners of these properties are able to reclaim 100 per cent of the renovation costs against their tax, which makes them a very attractive investment opportunity.
So, what investors fund is the actual purchase of the derelict building in the first place. This is a very cautious and prescribed process. The developers only proceed to purchase a building to convert to residential apartments when firstly they know that they will be able to convert it to a suitable number of apartments, which will be an attractive proposition to end purchasers and also for the rental market. Additionally and crucially, even before they purchase a building, they will have agreement with a German bank to provide mortgage finance for the end purchasers. Investors’ funds are initially held in a German law firms escrow account and aren’t released to the developer to purchase the building until there is a first legal charge on that building for investors security.
At this stage, when the building has been purchased, the apartments are sold off-plan. When all the apartments are sold, the buyers’ 30 per cent deposits repays the initial investors together with their return. And at this stage the refurbishment work starts.
There is no shortage of buyers for these refurbished apartments. Apart from high net worth German citizens who buy them as an investment and because of the tax breaks, a German Financial Services company has put together a Property Fund which is committed to purchase 100 million euros worth of these properties over the next five years.
So what are the features of this investment opportunity?
The investment and returns are conducted in £ sterling, euros or US Dollars, there are no exchange rate issues.
All funds go through a German law firm, funds aren’t released to the developer until a first charge on the property is obtained.
Minimum 12 per cent return, rising to 15 rising in years 4 and 5.
Option to either take return as income or re-invest for capital growth.
Choice of investment amount, subject to minimum of £10,000, plus choice of investment term, 1, 3 or 5 years.
The investment process is straightforward and clear with no set-up, ongoing nor exit costs.
We have seen this developer’s work at first hand in Leipzig and can vouch for the quality of the locations and the properties themselves. In addition, when the properties are completed, the developer retains their involvement as the management company responsible for the maintenance and upkeep of the building thus ensuring their commitment to the ongoing success of the project.’
Ask for the details – you will not be disappointed and, if you are a serious armchair investor, you will want to invest…