At the end of the day it doesn't really matter. Some made fortunes during the tiger, some didn't and others lost money they never had anyway. However, people sometimes forget, all the money that was lost wasn't really burnt in a fire or buried in a hole. There's a fierce amount of cash in peoples possession but hard to fathom if it's declared money or not. But, it certainly is out there.
New RTE programme "Burnt by the Sun" - Part 2 will be on Monday 18 May
- Thread starter Brendan Burgess
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Was it not Brian Lenihan (Jnr) ?
NoRegretsCoyote
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I'm going to take that as sarcasm
Hello,
I find it interesting that no one has mentioned the unscrupulous agents who sold these properties, or the corporates that had signed long term leases on French properties, but defaulted quickly after the properties were acquired by investors.
How about the Banks in Spain, France, Portugal or Bulgaria, that gave out the loans, or the valuers who "professionally" certified the value of the properties for the Banks and those that were borrowing?
I find it interesting that no one has mentioned the unscrupulous agents who sold these properties, or the corporates that had signed long term leases on French properties, but defaulted quickly after the properties were acquired by investors.
How about the Banks in Spain, France, Portugal or Bulgaria, that gave out the loans, or the valuers who "professionally" certified the value of the properties for the Banks and those that were borrowing?
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As a follow up to the above...
I purchased a French Sale & Leaseback, consisting of part of a commercial property situated in a busy commercial district, let to a commercial tenant on a long term lease.
Before I invested (along with taking on debt) I obtained a credit report on the tenant, and it was positive. It was a French company with a presence in about 12 locations, was profitable, had a positive Balance Sheet, had been trading over 10 years etc.
I further went and visited the location, satisfied myself that it was a decent commercial location, there was plenty of activity etc.
I paid 20% of the price from savings, and took out a property investment loan, from a very well known French bank, secured on the property, for the rest.
The property was valued by an independent valuer, appointed by the Bank from its own panel, with the valuation supporting the price that the property was being sold at.
The French Bank was happy with the quality of the tenant, and the sale price, to the extent that it was willing to lend 80% to a non national, non resident, at a very attractive tracker mortgage rate.
Moving on about 14 years and the property is worth about half of what I paid for it, the tenant not only went bust, but so did two subsequent commercial tenants. That's despite the property being well maintained, and the location still being a very busy commercial district.
Notwithstanding the above, the French Government won't allow us to provide a revised valuation on the property, to support a reduction in the local property tax. They insist on maintaining the original value on the property and applying local property tax calculated on same. I understand that this is a widespread issue in France.
The French legal system is very slow, and rarely seems to punish corporates, or their principals, when they do wrong.
When our first commercial tenant defaulted on its lease, it took about 9 months to finally get them evicted, despite them being in clear default of the terms of the lease.
It was later found that there had been fraud committed by the former corporate tenant, but despite the owners of the property instigating legal action and reporting the fraud to the appropriate legal authorities, no action was ever taken against the company or its owners / directors. The legal action taken by the owners ultimately ground to a hault, when it became clear that the French legal system would not grant an injunction to prevent the company being liquidated despite evidence that funds had been misappropriated, various creditors left unpaid etc. The former owners are known to have relocated to Switzerland and found to be living what seems to be a very lavish lifestyle.
There were over 100 investors in this commercial investment, many of whom are professionals and / or experienced people, some are French, some from Ireland and the UK.
I purchased a French Sale & Leaseback, consisting of part of a commercial property situated in a busy commercial district, let to a commercial tenant on a long term lease.
Before I invested (along with taking on debt) I obtained a credit report on the tenant, and it was positive. It was a French company with a presence in about 12 locations, was profitable, had a positive Balance Sheet, had been trading over 10 years etc.
I further went and visited the location, satisfied myself that it was a decent commercial location, there was plenty of activity etc.
I paid 20% of the price from savings, and took out a property investment loan, from a very well known French bank, secured on the property, for the rest.
The property was valued by an independent valuer, appointed by the Bank from its own panel, with the valuation supporting the price that the property was being sold at.
The French Bank was happy with the quality of the tenant, and the sale price, to the extent that it was willing to lend 80% to a non national, non resident, at a very attractive tracker mortgage rate.
Moving on about 14 years and the property is worth about half of what I paid for it, the tenant not only went bust, but so did two subsequent commercial tenants. That's despite the property being well maintained, and the location still being a very busy commercial district.
Notwithstanding the above, the French Government won't allow us to provide a revised valuation on the property, to support a reduction in the local property tax. They insist on maintaining the original value on the property and applying local property tax calculated on same. I understand that this is a widespread issue in France.
The French legal system is very slow, and rarely seems to punish corporates, or their principals, when they do wrong.
When our first commercial tenant defaulted on its lease, it took about 9 months to finally get them evicted, despite them being in clear default of the terms of the lease.
It was later found that there had been fraud committed by the former corporate tenant, but despite the owners of the property instigating legal action and reporting the fraud to the appropriate legal authorities, no action was ever taken against the company or its owners / directors. The legal action taken by the owners ultimately ground to a hault, when it became clear that the French legal system would not grant an injunction to prevent the company being liquidated despite evidence that funds had been misappropriated, various creditors left unpaid etc. The former owners are known to have relocated to Switzerland and found to be living what seems to be a very lavish lifestyle.
There were over 100 investors in this commercial investment, many of whom are professionals and / or experienced people, some are French, some from Ireland and the UK.
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Gordon Gekko
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Mr Earl, that’s terrible. It seems like you did some serious due diligence and still got burned. The tax and legal systems do seem a joke in France. Fair play to you for your candour.
I'm not perfect, but I did put the leg work in...
Hopefully others will learn from what I and other investors have experienced in France.
While I'm involved in a well located, well constructed, commercial property, many others bought apartments in poor locations, and even wooden chalets in the countryside, or in large parks, they are the ones I would really be worried about.
There's been widespread issues with the entire sale and leaseback model in France, dozens of companies having collapsed, investors left with half built properties, no tenants and no recourse despite so called rent guarantees, and despite years of negative publicity, the French government has done little to put an end to some of the shabby practices taking place.
If I can offer one brief warning to anyone reading this post, it's simple - never do business in France, as either the culture or the legal system, will drive you nuts.
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We invested, we lost, we regret the day we signed on the dotted line. But, we took it on the chin; it was only money and none of us died. We got the experience, we got the stories. I bet there are people looking in on this thread who made good money having bought Spanish property. Some of them are now saying to themselves "Oh Good This post will be deleted if not edited immediately God! What's Lep goin' to come out with now?" Mr Earl hinted above and nobody is ever going to know its extent. In other words, it was easy and effectively guaranteed money in the bank with little risk.
It's no secret and here are two examples of how it worked:-
(i) Spanish banks couldn't loan enough money. (Where did you hear that before?). You bought one or more properties off plan. You were not liable for Spanish taxes on the properties until they were completed. It wasn't unusual to make gains of 25% selling on the properties before they were completed. You had at least a year before the properties were completed, to sell. Then you started the process all over again. I know waitresses in Spain who made killings like this. Some Irish made killings too. It was the easiest investment on offer with very favourable rewards. I know one Irish person who bought five properties this way and he sold on four and kept one and made a huge profit in the process. I meet him several times a year in Spain. He knows he was lucky, but he keeps saying that he made his own luck. He's right and nobody knows about it.
(ii) I know another person (builders labourer) who bought Spanish properties and sold them on one after the other. His "speciality" is buying property that needs maintenance (and the more the better). He'd spend a month or two (Usually November/December) improving the property and would have it on the market in January. Sometimes he'd have two properties on-the-go simultaneously. He has been doing this for years and still manages to turn a few bob today. Not only is he a nice guy, he is fairly private and says nothing to anybody. His neighbours in Ireland think he won the Lotto and just keeps quiet about it. I've seen his handiwork which is good and he has the mind of an intelligent financial banker. I've never come across such a productive investor. I wish I had bought into what he does rather than the Eircom shares I bought back in the day. And on a personal note and just for the record he deserves any gain he comes up with, believe me!
It's no secret and here are two examples of how it worked:-
(i) Spanish banks couldn't loan enough money. (Where did you hear that before?). You bought one or more properties off plan. You were not liable for Spanish taxes on the properties until they were completed. It wasn't unusual to make gains of 25% selling on the properties before they were completed. You had at least a year before the properties were completed, to sell. Then you started the process all over again. I know waitresses in Spain who made killings like this. Some Irish made killings too. It was the easiest investment on offer with very favourable rewards. I know one Irish person who bought five properties this way and he sold on four and kept one and made a huge profit in the process. I meet him several times a year in Spain. He knows he was lucky, but he keeps saying that he made his own luck. He's right and nobody knows about it.
(ii) I know another person (builders labourer) who bought Spanish properties and sold them on one after the other. His "speciality" is buying property that needs maintenance (and the more the better). He'd spend a month or two (Usually November/December) improving the property and would have it on the market in January. Sometimes he'd have two properties on-the-go simultaneously. He has been doing this for years and still manages to turn a few bob today. Not only is he a nice guy, he is fairly private and says nothing to anybody. His neighbours in Ireland think he won the Lotto and just keeps quiet about it. I've seen his handiwork which is good and he has the mind of an intelligent financial banker. I've never come across such a productive investor. I wish I had bought into what he does rather than the Eircom shares I bought back in the day. And on a personal note and just for the record he deserves any gain he comes up with, believe me!
Brendan Burgess
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Sounds like Ireland.
Because of what is the tragedy of the Coronavirus, I think Spanish property prices will recede for a while. Eventually, they will go forward at snails pace.
Brendan Burgess
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But it was never just about the buying and selling prices of property overseas.
The transaction costs were huge. Even when the market was good, the costs of selling formed a big percentage of the selling prices.
If you have cash and you want to buy a holiday home, by all means do so. But they are not investments.
Brendan
The transaction costs were huge. Even when the market was good, the costs of selling formed a big percentage of the selling prices.
If you have cash and you want to buy a holiday home, by all means do so. But they are not investments.
Brendan
I bought in Croatia in 2004, sold in 2018, made a small profit on the property and overall broken even on the experience. Used the place a couple of times a year and let it for the holiday season. The Croatian authorities, estate agents and solicitors were scrupulously honest and transparent in my experience and straight as a die.
The only wrinkle was my Irish solicitor - a clown masquerading as a foreign property expert who took 800 quid off me for telling me what I already knew. His Croatian counterparts couldn't believe the incompetence !
The only wrinkle was my Irish solicitor - a clown masquerading as a foreign property expert who took 800 quid off me for telling me what I already knew. His Croatian counterparts couldn't believe the incompetence !
I admire the people on the program who fought back and got something out of it. It must have been very stressful (and costly) at a time when they were expecting to slow down and relax. It was also gratifying to see some of the conmen getting caught - usually they are well gone when the balloon goes up.
I’ve a couple of friends who bought in Spain, did their dd etc and it worked out fine but they put in serious leg work. They told me that there was a lot of corruption re planning permission (surely never happened in Ireland ) so they went to a lot of effort to make sure it was copper bottomed.
I’ve a couple of friends who bought in Spain, did their dd etc and it worked out fine but they put in serious leg work. They told me that there was a lot of corruption re planning permission (surely never happened in Ireland ) so they went to a lot of effort to make sure it was copper bottomed.
I had a similar experience with buying a business in France. The more due diligence, the more astonishing it became and I’m grateful to have dodged a bullet. Worse than the bureaucracy and officialdom is the culture of entitlement.
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