The manager of one of the banks we deal with called me last week to let me know they’ve launched a new mortgage product specifically for people purchasing distressed properties.

 

This is an excellent product: loan to value of up to 90% available for anybody resident in an OECD country, low application fees (0.35%), low interest rates (around 3%) and loan terms up to 40 years.

 

It’s a big deal that a Spanish bank has launched a 90% mortgage product specifically for these properties, as most of them have their heads completely in the sand. For example, myself and my (Spanish) wife can’t even get 90% for a regular property in Madrid!

 

This is perfect to use with our Granada product, which will achieve net rental yields of up to 8%. If you would like full details, please visit the Torcana website.

 

Kind Regards

 

Colin Murphy

Director

www.torcana.com

There is an enormous glut of properties in Spain at the moment, and I’m very picky regarding the types of developments that are chosen for clients.  My top tip for those seeking the perfect mix of investment and vacation is our new 288 unit development in Granada. We have negotiated exclusive discounts jointly with the bank and developer and independent research forecasts net rental yields of 8%. It is a beautiful resort in an unbelievable location with access to beaches (10min), golf courses (15 min), ski slopes (35 min), airport (25 min) and the historic town centre of Granada (20 min). You can find further on our website.

Generally speaking, I would advise buyers to stay clear of large developments (I get nervous when they are bigger than 300 units) and high density developments (more than 3 storeys). You should be purchasing units that are least 30% lower than the previous purchase price and that are at least 65% sold (to avoid risk that community fee system will collapse). And of course, don’t even think about purchasing offplan, with hundreds of thousands of unsold finished properties available all over the country at bargain prices, there’s simply no need to take that risk.

 

Kind Regards

 

Colin Murphy

Director

Torcana Ltd

 

Quite a few people have asked me about Spain recently and whether or not it would be wiser to wait a little longer until prices drop further.

The truth is that the Spanish market has not bottomed out yet, and there are many banks and developers who will shortly be joining the ranks of those who are already very distressed. This increase in supply should cause a drop in median house prices.

However, this doesn’t make it any easier to predict how far the markets might fall or when the “best” time to buy might be. At the moment we have highly distressed stock (in great condition) that is reduced 30-50% from peak levels, and I can’t see average foreclosed properties falling much further to be honest, even though the average regular property price still has a long way to drop.

If you want an extreme example of how much property developers are suffering down there, look no further than a small Belgian developer in Marbella who kidnapped a local bank manager at gunpoint in an attempt to secure a 50,000 euro loan a few weeks ago. Thankfully he was arrested and nobody was harmed after the bank manager used coded language in a phone call to his branch who then alerted the police.

I kid you not folks, it was reported in El Pais.

Feel free to view our Spanish property listings.

 

Kind Regards

 

Colin Murphy

Director

www.torcana.com

I attended an overseas property trade show called OPP Live a few months ago. This was the fourth year I’ve been to the show and as usual it was very well organized and I met a lot of old friends plus a wide variety of interesting people who work in the industry.

 
The atmosphere at this years’ show was very different to the previous ones though. Previous OPP Live shows were all held in very different economic environments, where profit margins were wide, the public’s appetite for overseas property was insatiable, and financing for builders and buyers was very easy to come by.

 
As most employers reading this will no doubt agree - property companies who take too long to trim unnecessary overheads and refuse to adjust their product offering to suit a changing marketplace will soon find themselves out of business.

 
Meeting a Changing Markets Needs
We’ve certainly no intention of making those kinds of mistakes in my organisation, and judging by the recent media interest and the huge response to our Florida Foreclosure services, there is still a huge demand for property that buyers can identify as being a great value medium to long term investment. Some of our readers may also be interested in our Florida property of the week below.
Outside of the USA, Panama remains very popular due to its uniquely international economy, although there is a firm emphasis on purchasing developments that are already under construction.

Still The Best Asset Class
All in all, I remain convinced that property is by far the best asset class to invest in. It also remains a uniquely fulfilling experience. I just can’t bring myself to leave surplus cash in a bank account with meager interest rates and I certainly won’t be putting it in our ridiculously volatile stock markets.

But you have to choose carefully
Big profits are definately there for the taking in the property industry but your investments absolutely have to be in the right locations, at the right prices and you must research them thoroughly and examine your personal finances carefully before committing.
These are all fundamental rules to abide by in both booms and recessions. The difference is that people ignoring them will suffer a lot more now than they would have done 5 years ago.

 
Torcana Ltd is a property investment consultancy dealing with investments in foreclosed property, distressed property, and discounted property in USA, Spain, UK, and Panama. For more information please visit: - http://www.torcana.com