How to avoid the most common Risks with Real Estate Investing in Europe
Professional investors do not buy a specific property or a super villa. They buy future cash flow with leveraged properties. I show you where you become a mortgage-loan covering up to 85% of the value of the property. The loan will cost you 1,25% only. According to a recent survey on real estate investing in Europe made by PWC, 80% of the respondents consider international political instability as an important risk factor. I give you an insider view on the latest trends and risks. Ultra-High-Net-Worth Individuals and family offices prefer prime locations with high Lending to Value percentage. You will receive little-known real estate investing tips on how to eliminate or reduce risks, where to invest and how to increase leverage up to 85% LTV. Stay tuned.
Real estate investing in Europe starts with the collection of facts and figures connected to the property. As a Buyer, you have to analyze and understand the information on the property. The real estate investing due diligence should eliminate the gap of information between the better-informed Seller and the less informed Buyer. The different level of information is the most common source for risks and mistakes with real estate investing in Europe. A fully transparent exchange of information will eliminate the risks and mistakes of a real estate transaction, except the market risks. On the other hand, a correct risk assessment can be used to negotiate a better price. If you work with our high quality of information is guaranteed. Unpleasant surprises are eliminated. A deal should be a deal ending with a successful closing and not degenerate into expensive litigation.
What are the most common risks with real estate investing in Europe?
It’s impossible to eliminate the market risks on future pricing, interest rates and inflation. Nobody can influence and control future market risks. But there are other risks we can manage well. The controllable risks are connected to the property. They are based on infrastructure, competitors, political and legal environment, area-development, tax and legal exposures, environmental impact, electro-smog, contaminated soil and exit risks.
How to avoid such risks?
High quality of information will lower the risks. The exchange of information is subject to a Non-Disclosure Agreement. Today, detailed information on a property is available with a cloud-based data-room and an Information Memorandum. We are successfully helping international investors, mainly family offices and Ultra-High-Net-Worth individuals, finding the best places to invest in real estate, in prime locations only.
Our boutique law firm is acting as an off-market real estate agent and net-worker with impeccable players. We make sure having full control over the transaction. We want to have full control over our counterparties and the deal. We are very cautious with whom we are offering a property. Wide and uncontrolled spreading of an offer will diminish the value of the property. We accept existing portfolio properties only.
We do not deal with projects. Please, do not send us projects. Before placing an offer we are already 100% sure that the counterparty can perform. There is no need for asking proof of funds. We just need a few impeccable counterparties – the right ones. That’s enough for closing the deal. Too many cooks spoil the porridge.
How to achieve the best possible LTV of 85% from a Swiss bank?
The Swiss real estate market is relatively small if compared to London or Germany. We deal with the major players on a personal level. It’s a people’s business. The number of people operating with real estate investing in Europe is limited in Switzerland. Based on our extensive network to Swiss banks and senior private bankers, family offices, asset managers and institutional clients, we become direct access to very confidential club deals.
At the moment, we are in a position to offer commercial real estate investing opportunities with impeccable tenants offering an attractive real estate return on investment of 4% to 8% in Swiss Francs with no leverage. Please be informed that our real estate investment strategies can be leveraged. We can arrange a first ranking mortgage-loan with up to 85% Lending-to-Value from a Swiss bank. The property must be located in an absolutely prime location.
You will pay a high price for best real estate investments but the Swiss bank will cover up to 85% under the condition that the location is top. If you invest and pay 15 million Swiss Francs with your own money in a property, the Swiss bank will give you 85 million as a loan for an interest rate of 1,25% or less. With 15 million you can buy a property for 100 million because the bank will finance 85% of the value.
The low-interest rate of 1,25% combined with an attractive LTV of 85% is attracting international investors who previously invested in bankable assets. It’s a fact that the booming hi-tech economy in Zurich is increasing demand for space. If you like the video, show it to us now and push the like button now. If you like information just like this, make sure to not miss the new videos and subscribe to my YouTube Channel now. Click the subscribe button and ring the bell.
Where are the properties located the Swiss banks are offering a mortgage for 85% of the value?
We are very well informed on local properties and opportunities in Switzerland. Zurich is definitely one of the best cities to invest in real estate. We are the local networkers and matadors in the real estate arena. The most attractive deals are taking place off-market. We do interviews in order to verify the quality of information listed in the data room.
Hiring a local matador like us as a real estate agent is crucial for having control over the deal and minimizing risks with real estate investing in Europe. For such an exceptional LTV of 85%, you must invest in high-end top properties in the center of the city of Zurich. A good location is imperative. Otherwise, the Swiss banks are not offering such an attractive LTV.
What are the requirements for a Non-Binding Offer?
The elements for a Non-binding Offer are the Information Memorandum on the property with access to the data room and the viewing of the property. We provide a term-sheet. We ask for a letter of intent. In most of the cases, we do not ask for proof of funds because we know very well the environment of the potential Buyer. Normally, the buyers ask for exclusivity with a 1 to 3 months period. The Buyer receives all the elements for submitting a Non-Binding Offer.
We have a check-list listing everything you need to compose the Information Memorandum and another check-list for the correct set-up of a data room. Our checklists are covering all sort of information connected to the property. An exhaustive Information Memorandum with a full data room is crucial for a fair risk assessment.
What are the requirements for a Binding-Offer?
A Binding-Offer needs the decision with a price. The price is not necessarily the value of the property. The value of a property is an estimate. A price is only a price if it’s paid. The Buyer will start with the financial, legal, tax, technical and environmental due diligence process.
Professional real estate investors in Switzerland usually hire Wüest & Partner or IAZI AG for the valuation of their property. Wüest & Partner and IAZI AG are widely accepted in Switzerland. For real estate investing in Europe, you should hire a local price evaluator who is recognized and accepted in the market. For a Swiss property on average, the price deviation between the estimated value and the effectively paid price will not supersede 10%.
If you are a family office or a private investor looking for off-market opportunities in the amount of 10 million or more in Europe, give us a call on +41 44 212 44 04. Most probably, we have the right off-market opportunity for you, or, we will investigate our network and come back to you soon with excellent proposals which are not in the market. If you have a property exceeding 10 million in Switzerland, UK, Germany, Austria, France give me a call now and let’s discuss how we find the right Buyer for you. Due to our extensive network with international bankers and family offices, we are in a position to place a property in Europe off-market.
What are the latest trends for real estate investing in Europe?
According to a recent survey of PWC across 22 countries on the trends for real estate investing in Europe, 80% of the respondents are concerned about the risks connected to international political instability. Because of Brexit, for example, many important family offices moved from London to Zurich or Geneva in the last 2 years.
Professional real estate investors such as family offices do not buy a property or a nice villa. They buy future cash flow and capital growth in a politically stable environment. Choosing a secure jurisdiction for real estate investing in Europe is becoming more important according to the survey of PWC. Non-financial factors like political risks are combined with future cash flow calculations, including leverage and capital growth potential.
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If you have a property you want to sell or if you are searching for an attractive off-market investment opportunity, call me on +41 44 212 44 04 now. Let’s discuss how we can sell or buy an off-market property for you at a fair price based on our extensive network. If you have a confidential or sensitive question, you would like to discuss only with me, grab your mobile phone now and give me a call. Be rich and stay rich. Have a wonderful day.