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Newby

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  1. I found a company in Germany (http://prophaus.de/) that offers high yields, but the investment necessary is too high for me (about 3 M. HK$), and I am checking if anybody wants to buy the property with me. This is a short list of pros and cons. I have some brochures I can send to anybody who wants to check the information in more details. Each property is a building with residential and sometimes also commercial units. Often about 10 to 15 different flats. They are mostly located in secondary cities, with a population of about 500,000 or so. No Berlin, Hamburg, Munchen, etc. The down payment is 300,000-350,000 Euros (each building of course has a different price, it goes from 250,000 (very rare) to over 400,000 Euros. Then there is the mortgage, at 70%, for only about 2.1% yearly, fixed for 10 years. I think the fact that the mortgage rate is fixed is particularly attractive. Even if there is hyperinflation, the mortgage rate won’t change. The buildings are fully let when they are rented out, and since they include 10-15 flats, I think the risk of loss due to vacancy would be extremely small. The yield is about 10% yearly, adding the money that one get from rent (in cash) and the money that goes towards repaying the mortgage. After 10 years, when the fixed mortgage rate is finished, we can discuss whether to make another mortgage, sell the building, or repay the mortgage and get the cash from renting the flats. The building will be owned by a limited company, which will own 94% of the building (the other 6% will be owned by prophaus). It will be easy to have different investors investing in each building, each investors owning a bunch of shares. I don’t think there will be scope for disagreement. This is just a commercial transaction. If, for example, I own 30% and another 8 people own about 8% each, in 10 years I can buy out some of the other investors, or we can sell the property, etc. If anybody is interested, can you please let me know through a pm? I have a couple of brochures of properties they are selling, and I also have a brochure of the company, explaining how they work. I am not an agent of this company. I would like to invest, but I can’t invest 3 million (it’s too much for me). I am looking for other people who want to put some money into it, and together we can buy one or two buildings. Cheers, New guy
  2. No, I didn't. Check out http://www.independe...s-a6768606.html and see whether it's a company you would trust.
  3. Or is it? Although I would never want to live in Bangkok, this doesn't seem to be bad: http://www.asiabankersclub.com/news/upcoming-events/sansiris-latest-bangkok-property-the-line/ If the information given are correct, it's just above the future station of the high speed rail from Singapore to China, so a good place for business people to rent a flat? Plus, in front of the park, plus connected to the local MTR? Of all the properties I have seen in Bangkok, this seems to have one of the best locations, although at HK$3,900/sq. ft. it doesn't look cheap. Thoughts, anybody?
  4. Would you like to share your investment insight with us?
  5. Thank you very much. Yes, if it's too good to be true, it's probably not true, but I can't find what is wrong with this investment. Unless, of course, it's very elaborated scam. And I did google "Mbi scam" and I didn't find anything. The hotel is featured here: http://www.bbc.com/news/uk-wales-north-west-wales-31112095 and here: http://www.northwalespioneer.co.uk/news/144050/rooms-for-the-blind-retained-at-llandudno-hotel.aspx Mbi is a business that exists for 4-5 years, and is mainly involved in care home building, but it also has a couple of hotels and student hostels. Its age means that it hasn't yet bought up any property from its investors (through the guaranteed exit strategy). I know that developers make 20% or so profits on their investments, so what they promise is feasible. Yet, it is an incredibly good offer for the average Joe like me. Too good to be real? TI, thank you very much. I go through your points. It seems that they have reviewed all the criticisms made to guaranteed returns investments, and addressed them all. Though so far I have only spoken with the agent, and I still have to check if everything he told me will also be included in the contract. 1. the guaranteed income has to come from somewhere - often developers jack the sale price up to fund the guarantee Absolutely, but GBP40,000 (actually I will be paying 35,000, and have a slightly lower yearly income for 10 years, the ROI would be 205% or so over 10 years) for a hotel room doesn't look like that more expensive. And actually if they buy back the property at 125% the declared value of the flat (the declared value is 60,000), so I will get 75,000. So whether they jacked up the price or not, isn't really such a big concern. 2. the guaranteed income is usually gross income (not net income) - expenses will eat into that and those expenses will increase every year They said that this is net. No extra charges. 3. the last time I looked at hotel rooms, the investor had to pay to replace furniture, redecorate etc every few years - there wasn't a whole lot of income left after these costs were taken into account Actually I didn't ask about this, and they didn't mention this. I will ask them. Thank you. 4. (as Dr Bubb pointed out) you are taking credit risk on the person providing the guarantee The hotel is owned (freehold) by Mbi Heritage (which is a subsidiary of Mbi). They leasehold the room to me for 125 years. So Mbi Heritage are the ones guaranteeing the yearly income and the buyback at the end of the 10 years. If they fail to pay the rent or buy back the flat I guess I can sue them and we (the owners of the flat) can get the freehold and sell it (though of course it would be a huge mess to do so). I guess the risk is that the freehold is worth less than the buyback price? This may be possible, but I am unlikely to lose everything, and by the time Mbi is supposed to buy back my property (after 10 years) I would have more or less earned my initial investment (35,000) through the yearly income. 5. 10% income without gearing in a ZIRP world and high property markets is huge - I'm not sure why anyone would be selling something with that kind of yield? Absolutely. Unless they reckon that within the next 10 years bank interest rates will go up considerably. But yes, it's almost too good to be true, right? 6. liquidity is often an issue - in this case you have a buy back which is deals with this issue. Yes, I can't see the scam here!
  6. Dr, and everybody else, I am planning to buy a room in this hotel: http://mbisalesltd.com/heritage-hotel/ I would get the leasehold (for 125 years), a contractually guaranteed yearly income of about 10% of the purchase price, and a "safe exit", i.e. the developer will buy me the flat for 125% of the purchase price. So it seems a safe investment to me. But there is usually a bad name about buying hotel rooms, so I am a bit wary. The argument I usually hear is that there is no way to sell the room, if you want to. But in this case the owner promises to buy back the room. The owner, Mbi, owns the freehold of the property. What do you think? Should I stay away, or should I give it a go? The investment is GBP35,000 (HK$405,000) so it's not the end of the world, but of course I don't want to lose money. Thanks!
  7. I am thinking of buying a property in Australia, and I can do the mortgage in either US$ or A$. The interest rates are: Loan below AUD300,000 1 month loan interest rate as of today is 5.4% for AUD, 2.97%pa for HKD & USD Loan above AUD300,000 1 month loan interest rate as of today is 5.9% for AUD, 3.47%pa for HKD & USD I believe it makes sense to make a mortgage in US$, right? It's about 2.5% cheaper than the A$, and historically the US$ has been losing value compared to the US$. Although it might be better to wait another couple of months before signing the mortgage, since the A$ is expected to cheaper a bit more. The total amounts that can be borrowed are: max,. 80% for AUD loan max. 75% for HKD loan P.S.: I would buy this property for the long-term (20 years +) and not to flip or for a quick buck
  8. Hi Dr, you have convinced me! No, I have been looking at Australia (taxes are about 50% of the rent, while the interest rate is 5.4%), Canada (lower taxes, but only a mortgage of 65%, which means most of my money would go into a small property in a city and country I know very little about), Singapore (20% tax on the price of the property). What about the Philippines? Can you make am 80% mortgage in Philippino peso, and use the rental income to pay for the mortgage? How is the process of buying a flat there? I think you bought a new building, not yet finished? Or do you have tenants? What are the commission for the agent? Have the tenants been paying regularly? What is your general experience? P.S.: I still don't have time for boots on the ground.
  9. Pricing: 1 Beds from £275,000 2 Beds from £322,500 3 Beds from £567,500 The problem is that I have about HK$1.3 M, but I have no time to do any legwork, and the money I have isn't really enough to (say) fly to London and spend 2 weeks looking at buildings. The money I would spend on that holiday would eat up all the difference in profits between HK and the UK, so I could as well buy in HK. But in HK now the prices are too high, and I would like to diversify (I don't know what HK will be like in 20 years).
  10. Thank you. This sounds good. I am trying to find out how much it will cost.
  11. "boots on ground approach" Absolutely. But I don't have time to go places, but I still want to take advantage of the temporary strong US dollar by buying somewhere else than HK. Let's agree to disagree about Thailand and Philippines. I am just happy to get 1-2% less a year and have peace of mind by investing in a civilised country where politicians and judges are not corrupted crooks. Can you send me some references (internet link) about Abbey Tower? I am unable to find anything after a google search.
  12. Flat in Manchester? A good investment? There is an advertisement today in the Standard: https://hongkong.geoexpat.com/forum/attachment.php?attachmentid=58061&stc=1 With a down payment of HK$800,000 you get the cheapest flat. What do you think? If it was so great they would be able to sell it in Manchester, and wouldn't need to push it in HK, right? But is it still a decent investment? I know that London is overpriced, but Manchester?
  13. Singapore: A good long term investment? What do you people think of properties in Singapore? Pros: The Singapore economy is well run, The IMF expects it to grow quite a lot, compared to other advanced economies (Europe, North America), around 5-6% or so. Although the prices have risen quite a lot, the price of condos (which foreigners can buy) is only about 10% higher than in 2008: http://www.singaporepropertycycle.com.sg/market-trends/singapore-property-price-index-by-housing-type/ You can make an 80% mortgage, at a fixed interest rate of 1.5% (in Singapore $). That's basically free money, though I have to check if 20-30 years is possible (checking now). Constantly appreciating S$, at about 5% a year compared to the US$ (but a slight slump during the last months). Long term increase in price of properties (over 20-30 years: about 4% a year) Near HK, can go there in the morning and come back in the evening, cost about HK$1,500 for the flight, to sign contracts or check the flat. Cons: Low rent revenue (about 3%, similar to HK) Now a tax of 20% of the purchase value, but overall I think in line with most other countries? 20% tax on revenue from rent Conclusion: Overall, a safe investment, and with the appreciation of the S$, increase in property values, and revenue from rent, you are talking of about 10% a year. I am thinking of a long-term investment. I would buy a property with a 20-year mortgage (80% of the value), use the rent to pay off the mortgage, and then live my retirement on the rent. I can envision an appreciation of the HK$ within the next 20 years, but I live to diversify a bit, and a property in Singapore is safer than in many other places, and as long as Singapore will continue to be managed by PAP you can't get wrong, can you? What do you think? =============== (in edit): LINKS: SG property News : https://www.srx.com.sg/singapore-property-news
  14. SILVER

    Haha. Since Kim Jong-il's death led to a rally in the price of silver (and the relation is clear, so I won't go into it), then the death of some formerly very rich old sponger will lead to another rally in the price of silver (another very clear relationship I won't waste my time to explain). Seriously, since I last posted here the price of silver has dropped by 20%. I think it can easily halve from here, since silver has gone up the 300% over the last 11 years, while inflation has gone up by 30% or something.
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