Buying NPLs - recos & resources?

Question

Hi,

I am considering buying NPLs in Spain. I have no experience in the field and understand fully it's not a simple endeavor.

That being said, I was wondering if anyone had experience with it they could share or resources they could recommend?

Thanks,

MM

Erwin Groenendijk · Answer

@Maria Murphy It was a normal transaction once we ended at the notary. When we were done at the notary and finished the purchase, we were able to obtain the license and start the works (it was a big commercial old furniture shop where we created 14 tourist apartments).

It is true that before the purchase we needed to do quite a lot of work to make sure everything was organized with the payments of the debt etc. Most of the work needed to be done by the seller as they were the ones carrying it and it was owned by several family members who were getting into a fight, etc etc. Will not disturb you guys here with all the detailed information, but most of the time we then step in and organize this for them. Typical problem properties that are difficult to sort but once it is sorted usually with good upside potential.

Erwin Groenendijk · Answer

This was in Barcelona via a subasta, it was a contact of us that was our intermediary in this process. Not sure if this is the case in all provinces because Catalunya, especially the Barcelona city government, is quite left and making it difficult for investors.

In the meantime, we have been buying properties with debt from owners and others directly from the bank in Valencia.

Maria Murphy · Answer

Where did you try to buy foreclosures? Have you tried judicial/non-judicial auctions? Subastas?

I don't think they're called differently. They are NPLs, REOs and CDRs (CESIÓN DE REMATE), depending.

If I may ask, which municipality used their priority right?

Maria Murphy · Answer

Interesting. And how long on average would you say it took you to become the owner and take possession of the properties (to flip or rent them I suppose) from the moment you purchased the debt?

Erwin Groenendijk · Answer

@Maria Murphy yes correct, simply paying the debt in the owner's name to hacienda (tax office)/government first as part of the purchase at the notary and everything left to the seller.

Valencia has worked quite well for us the last years and compared to Barcelona/Madrid the m2 prices are a lot lower. Because of that the total project costs as well.

Maria Murphy · Answer

Right. So it may be the same thing you are describing in Valencia. Since you are buying directly from the banks (no intermediaries?), I suppose you buying the debt itself and try to obtain title to the property after following the judicial process, or not? How has it been working out for you? Could you often or always get title to the property or you get money back from the debtor/ a third party who wins the auction sometimes?

Erwin Groenendijk · Answer

Sounds interesting. We tried to buy some foreclosures from the bank some time ago without success because quite some time the municipality holds the right to be the first buyer and purchase the property for the price you agreed it to buy for.

NPL sounds like bigger deals so it might work differently. Or is it the same?

What would you call this in Spanish?

NPL sounds like bigger deals so it might work differently. Or is it the same?

What would you call this in Spanish?

Erwin Groenendijk · Answer

NPL as in non performing loans? Would that be contacting banks and requesting lists from them?

Maria Murphy · Answer

I am sure, alas one cannot specialize in all markets:)

Buying NPLs - recos & resources?

Buying NPLs - recos & resources?

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