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Edward Newton heads Offshore Properties' Investor Services Division and is currently assisting Investment Funds and private individuals with the acquisition of residential property in Southern Cyprus. The division is intended to be run as a very personal service and therefore the number of locations covered and instructions accepted are limited. Currently, the division is only operating in Southern Cyprus though is expected to move into the German market early this year.
"The service is aimed mainly at private individuals wishing to acquire off plan property on a medium to large scale. We advise on the most appropriate vehicle through which to make the acquisition, assist with the practicalities of the deal and, dependent upon exit strategy, we assist with every aspect of the marketing and distribution associated with resale." |
"The process is intended to be completely transparent as are the developers and professionals with whom we work. The most popular kind of investments we make, are those with a very quick exit strategy, a practice which is regularly referred to as 'flipping'."
Property is often acquired before it has come onto the market, sometimes even before plans have been drafted. This way, buyers are able to negotiate very good discounts significantly below the true market value. Due to the taxation, legal and mortgage framework in Cyprus it is extremely inexpensive to buy property in this way. Buyers looking to acquire and quickly resell property will only put down a maximum of 30% of the purchase price with the remaining funds secured by a local bank. They will then usually look to resell the property back onto the market for a profit.
Last year our average net profit was around 55% per deal over a 6 - 9 month investment period.
Our Service
Our service involves very close consultation throughout the investment period. Practically this will involve some informal meetings to assess your requirements. We will then suggest some initial ideas, types of investment, legal/taxation frameworks and exit strategies. Once we have completed this initial process and you are happy to proceed with some or all of the options presented we can either accompany you to Cyprus or go on your behalf (regardless of how many times we may have visited a location we always visit a proposed investment in person). The purpose of this trip is to reaffirm whether the investment looks viable and meet and instruct the relevant professionals.
At this stage we will also assess how quickly we believe we can resell the property under consideration. Typically this will be done through Offshore Properties and sub agent distribution network.
Following developer negotiations and once satisfied with the deal, you arrange for reservation funds to be transferred to your lawyer. We then commence work on the marketing and resale strategy. Around 30 days later you will be expected to transfer your 1st stage payment of 30% at which point the property will become yours. We will then launch our marketing campaign to dispose of the property back onto the open market. Once buyers are found your lawyer will assist with the legal arrangements to free you of your obligations to the developer. Because we will have helped you to fix the new buyer's payment plan with the developer you will know how much profit you can expect to extract at this stage. Usually this is 80-100%. The complete investment lifecycle is expected to be between 5 and 10 months.
Email edward.newton@offshore-properties.com
Questions we help answer:
- What are you looking to achieve from your property investment?
- What are your pre-conceived notions regarding such an investment?
- What type of property to buy?
- Which developers to buy from?
- Which developers not to buy from?
- What should you know about a developer before purchasing?
- Is the location viable now and in the future?
- Is there any legislation which may impact upon the investment?
- How does the banking system operate?
- How do we avoid delays?
- How can we avoid bank charges such as arrangement and surveyor fees?
- How do we obtain the best price from the developer?
- Do we have to pay any penalties if we cancel our contract?
- What type of mortgage should we take?
- What currency should we lend in?
- Are there any lawyers and accountants specialising in this type of transaction?
- How do we organise the resale of our property?
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