Purchase of German Commercial Unit - Appropriate Vehicle

Can anbody comment on a suitable vehicle/structure for the purposes of buying a commercial investment unit in Germany - investors are all Irish residents.

have a look at this i have mentioned it before and i am contemplating investing..
www.cmccapital.ie
please let me know how you get on and what you think

Am I misreading this but does the GMC product have a cap for returns of 100% of investor equity?
They mention 15%pa nett potentially but is this the leveraged return.
At 4:1 leverage 15% is low return and nearly in the same breath they mention a pre tax 30% return?
As clear as mud!
@ 4:1 leverage with a 7% annual yield surely the investor should be getting more out of this?

therave said:

have a look at this i have mentioned it before and i am contemplating investing..
www.cmccapital.ie
please let me know how you get on and what you think

Click to expand...

I realise that you have previously said that you have no involvement with that company and I do take that as a bona fide disclaimer but I'm puzzled by why you would recommend somebody else to look at the link when you have obviously not decided yourself that it's a good deal. Perhaps you can explain?

do GMC have a track record in Germany or in syndicates?
Would be looking more at a specialist in the syndicate investment arena like Morley who are under Aviva/Hibernian.

Spoke to them about the product.

They take a 3% allocation up front and 4% per annum (i.e. 1% of total fund). So after 5 years that's 23% and after 10 its 43% of your capital taken in costs. You may get your initial investment sum in the property back provided they can refinance based on capital appreciation of 20% for that period. While property prices have been going down in Germany there is apparently some evidence of stronger demand in 05 for commercial property as yields are becoming more attractive. They have done one previous deal for 3 commercial properties achieving yields of 6.3 to 7.3%. Their 7% yield is only a target. They have complete discretion with how they go forward with your money and when they liquidate and return any gain, and that includes the refinance. They anticipate 5-10 year horizon at their discretion.

aha that where they are making their money!
that sneaky 1% of total fund including loan portion?
feel investor should only pay fees on their equity........or am I misreading this?
have they bought the properties?

hi Clubman,
i have indeed recommended looking at the link before and i am considering investing,it depends on many factors currently in my portfolio and a re-financing.on advising somebody else to look at the link,the question was asked about a suitable vehicle for investment in commercial property and seen as i have a colleague who has invested in their first fund and also that they are holding information evenings around the country i decided to offer this as a possibility..CMC are also ,from my west Cork contact,a very well known accountancy firm in Clonakilty..
i also think the chance of hearing the info and being able to ask the questions at a meeting is far better than just reading a prospectus (albeit,it will of course always have a positive spin on it).
i have an acountant friend helping me understand the percentages and tax implications in the scheme..i do know from my colleague that they have bought 3 or 4 commercial properties in their first fund and have spent a few quid...i apologize to you and the board if you feel i am misleading anybody

As CMC are predominantly syndicate organisers it may be no harm to have a read of this piece in overseaslist.com which outlines the pro's and con's of such an investment in an impartial manner. [broken link removed]

The above diarmaid condon article states a 1% management fee is normal for these type of syndicates but does not clarify is it 1% on the equity alone or 1% on the equity plus geared loan.
Depending on this clarification the article is either saying this particuliar cmc scheme costs are within the nornal range or are too high.
So anybody know which it is?Do these type of schemes normally charge 1% on equity only or gross value?

If you are looking at sourcing your own investments (i.e. a DIY syndicate) then with decent tax advice you should be able to reduce your Irish tax liability on this type of investment to 23% - I think that German tax rates are around 30-35%?, so you may end up paying the German rate and having no additional tax liability in Ireland.