All Forum Posts by: Javier De la Rosa

Hi Verity,

Slightly late, but in line with Georges and others:

1- Central or suburbs? Suburbs offer a higher ROI, but once the market correction comes, suburbs will be the first to be hit (and usually harder). In any case, remember that profits are made when you buy. On the bright side, suburbs will offer you a better diversificaction: you'll be able to buy more units.

2-  Yes, do leverage, as long as rents do pay the mortgage. Fix rate for sure nowadays.

I'd advise you to do your research rigjt now, sort all your financing/taxes options and wait to see how the market evolves in the coming months!

Hi Avi,

Good to hear from your initiative. It's also interesting to learn what the situation is in Israel.

By RE investments company, do you mean REITS or crowdfunding-sort of companies?

Regardless of the market conditions, if you are investing overseas or if you don't have local expertise, the simplest option would be investing through REITS. These should be relatively liquid investments that may allow you a hassle-free exit whenever you decide. And they will provide you with a lot more diversification.

With regards to the current market situation in Spain, I don't think you'll ever get a black or white answer. As in financial markets, you'll probably have 50% of bullish investors and 50% of bearish investors.

An objective index I often use to get the feel of a market is the UBS Global Real Estate Bubble Index. It is available on-line free of charge.

If you want a short answer, considering this as my personal view only, I would say we are still in a seller's market, but I cannot see the recent asset valuations growth to last for too long. Once again, as in financial markets, we all know prices are going to stop growing at some point, but nobody knows exactly when the big fall in prices will begin. 

In fact, RE valuations are decreasing already in some areas, for example in some parts of Barcelona, and for certain RE asset types. I'm not saying you won't find good deals, but the margins are growing thinner and thinner...and some buyers are putting-off their decision to buy simply expecting a market correction.

Personally speaking, I have sold already a portion of my portfolio and I am cautious now, expecting for the market conditions to unfold and ready for the opportunities to come when asset prices go back to a "healthier" level. 

Regardless of what I'm saying, the most important thing would be for you to consider what is the minimum ROI you'd consider as acceptable and, if you find deals or companies offering a decent return ,and within your risk tolerance limits, go for it.

Hi, I guess the language problem English-speaking customers do face in Spain depends on the education of each individual. On average, and this is just my perception as a Spanish national having worked all over Europe, Spaniards' command of English is poor.

It is true younger generations are much more capable, but we are still well behind when compared to the Nordics, Netherlands, etc. 

Having said that, you can find very capable English-speaking agents. The accent issue is another matter.

It would be interesting to learn more about your findings.

Very inspirational...too bad you are no longer based in Barcelona! With you attitude, I'm sure you'll succeed in achieving your goals. All the best

Hi Bjorn, 

It's such a small world...although I studied a KU, I spent most of thursday evenings' at CBS!

Thanks for your inputs on the Danish market; it sounds like it might be slightly economically inefficient, although it may be more socially viable.

My friends' track record is based on years of experience as a heavy flipper and builder himself. He's got two separate residences, so he's investment was substantial. He's got a team managing the dorms, but he's highly involved in all matters. He couldn't have gone so far without he's prior experience, as it was with construction and flips that he made enough money to invest in such a large scale. He's definitely a role model to me.

Happy to discuss privately if we could help you through my rental property company.

Thanks

Hi Bjorn,

The example described is how mid/long-term rentals work in Spain. I agree for short lets/student housing it could be a no go. However, if the fee applies to you (the landlord), as you pointed out, it could discourage you from investing at all.

Perhaps someone with experience in dealing with this type of rentals would be more appropriate to help you.

What I do find interesting is comparing how rentals (long term) work in for example in the UK vs Spain (these are the two markets I've had experience with):

In the UK, the tenant does pay the property manager a fee for their services (drafting the rental agreement, arranging viewings, etc), but the fee is not as large as a half or one month rent. Then, the landlord does pay a larger fee to the manager for each new rental agreement, additional to the x% managment fee.

In Spain is the tenant who bears the higher initial cost instead of the landlord. I don't know why, but this is how it works here and the current legislations supports the practice. The fact is that, regardless of the fee, tenants are still interested in renting apartments.

How does it work in DK? When I studied in CPH my accomodation was provided by the uni.

With student housing, I am sure an equilibrium that works for both parties could be found.

I currently own a few residential and commercial units in Barcelona and surrounding areas. I focus on long-term rentals, but I do invest in rehabs/flips as well. I have indeed considered investing in student housing but I am still learning about it. A good friend of mine manages over 100 beds already...hopefully I'll get there at some point!

Hi Bjorn,

Great initiative! 

On Q1, current practice in Spain is that the "half month rent fee" you mentioned is usually paid by the tenant, not the landlord. So in such a case, the fee would not affect your cashflow. The regular managment fee your're paying to the property manager would indeed be deducted from your gross rental income.

On Q2, from a practical standpoint, I would try to avoid getting financing abroad. Borrowing is usually a lengthy process, extremely regulated and cumbersome. Doing so in a foreign country where you cannot provide evidence of potential capacity to repay the debt could be more complicated. It is definitely possible, but more difficult.

Have you considered instead borrowing in DK and using your funds to invest abroad? Depending on the amount, you could easily get a loan in your home country without the need for justifying the investment objective.

Either way, you will need to file for a Spanish tax code so the Spanish authorities can identify you for tax purposes. 

On the high turnover rates, ERwin and Adrià could definitely help.

Excellent Mike, will revert as soon as possible. Thank you.

Hi @Erwin Groenendijk, with regards to the NPL portfolios, we could be talking about several millions. Buying NPLs is a different animal and would not recommend it unless there's an experienced team behind it to properly service the debt.

Regarding the REOs, the portfolio I've had access to is worth €25M+, but assets could be purchased individually. It's a matter of structuring a sub-set of assets that could suit your needs or identifying the number of properties you could be interested in. Then you'd make the offer and the bank could accept or reject the offer. The properties are currently off-market.

Sure! I talked to him about Raval already, not interested I reckon. With Poble Sec, we'll have to wait for a few weeks.