All Forum Posts by: Erwin Groenendijk

Nice to hear 👍 Will reply to you in private 

Hi @Max Alings, yes it is now possible to do the refinancing set-up in Spain. The only thing is that will not allow you to do it as a cash-out refinance, because they only allow you to directly invest the money given in a new property with financing from that bank.

Hi @Shahar Segev, the theoretical part sounds fine (which is the easy part), now it is time for the doing. 

We are also developing many apartments in Valencia so let us know if we can be of any help in the upcoming time.  

Next to what @Mike Lambert is saying, you could try investing in strategies that bring higher yields such as room rentals or use the mid-term temporada contracts so you also avoid the rental caps.

By the way, as an investor you would most likely want to avoid the premium zones because you know that the yields are lower there. I would consider investing there at a later stage in a career when the yield is not that important anymore.

I was by coincidence talking with another investor who only buys occupied apartments and gets them out quite easily by paying them a certain amount. Also to state that together with our investor network here in Spain, we rarely experience squatters and that these articles sometimes are being blown up. Now, to be clear, I'm not saying it is not happening.

Besides this, I would be interested to read more about people's experiences in Miami

@Maria Murphy that is a thing that we hear a lot. 

The level of service that foreigners are used to is not the same as normally provided (at mainly local offices/agents). 

Also, it is true that most of them specialize in 'normal' real estate and that investing opportunities are more by word of mouth or again via these local agencies with experience in specifically doing that (you need to know them by having done other projects in most of the cases).

Saw your message, let's continue over there 👍

Hi @Maria Murphy, you are doing the dirty work that a lot of agents are doing to find good deals out there. Most times it will end up to nothing but for sure you will find something at some point. 

We are still finding good room rental apartment- and new development plot deals in Valencia every month. Next to doing a lot of searches yourself it most likely makes the difference with having good agent contacts. 

We could give you a hand. 

Hi @Daniel Rongo, sounds good. Could you explain to us a bit more about the deal?

You might want to have a look at some other discussions we had here on BP regarding the BRRRR method in Spain. Banks are less open to it but talking with the right ones (especially the right mortgage broker) might do the job.

Erwin

Hi @Eddy Wehbe, brokers are doing the work that you don't want and, in a lot of cases, can't do (think of connecting you to branches that understand and are able to help investors, providing mortgage products that normally wouldn't be offered, getting rates that direct banks are not giving). The work that they can do could be making or breaking a deal.

Sorry to say, but directly stating that brokers are expensive for no benefit means that you haven't been talking to the right ones or do not fully understand what work is involved. 

Especially for people from the US a lot of additional work needs to be done to get things approved. 

@Rafael Pinho forgot to respond to your question regarding the mortgage broker. Yes feel free to send me a message and I can put you in contact 👍

@Emily Anderson true on the flat 24% tax rate on rental income without the possibility to deduct costs from it.

Keep only one thing in mind: rental income is being added to regular taxable income (salary and rental income).

So I could deduct costs before ending up with taxable rental income, however for me, it is being added and calculated together with my salary income.

That means I'm easily reaching higher tax brackets even after the deductions, while with a flat rate it always stays the same (even if you earn way more rental income). Not before that long it could become more interesting for you than for us here.

Now, for us building a portfolio of rentals (and btw also an option for Americans), we avoid this by not doing it as an individual but with a company (SL) and changing it to company tax (first two years 15% and after this 25%) and creatively deduct way more costs.

It is true though that this is a good way if your strategy is to reinvest your money time by time building something bigger/passing it along to kids/relatives etc, because when you want to take money out of your company you would need to pay dividend tax or in the form as a salary.