Projects for popular houses mar 2012


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Projects for popular houses mar 2012

  1. 1. Projects for Popular Houses Mike Smith Licensed realestate broker in Natal,Brazil CRECI;3125
  2. 2. Minha casa- Minha vida• Government scheme to assist lower paid families and first time buyers to own their own home, gaining a government subsidy of up to R$17.000,00 dependent on the age and profile of the applicant.• Our projects target this profile perfectly
  3. 3. Constructions completed• Parnamirim- Rua Mar de Galilea, close to amenities including schools and hospitals.• Paved street• 3 bedrooms with one en suite, total of 76.15 m2, with plot sizes 204 -224 m2• Price R$99.000,00 each• All sold, marketing direct, and through estate agents
  4. 4. Example of adverts placed
  5. 5. Macaiba/Parnamirim area of urban expansion growing rapidly• Current project for 56 apartments, 2 bedroom, 55 m2 in size, targeting families with income above R$1.400,00 per month, with finance available up to 25 years, through Caixa or other banks.• Launching with price of R$82.000, with all transfer costs paid by developer, so buyer does not need cash.• First 8 units ( 2 blocks of 4) completed November 2011• Pro-active agent appointed to market these units with possibilty of taking reservations and advance monthly payments.pre-reservations going well and we are under pressure to complete sooner than planned
  6. 6. Maquete of the development
  7. 7. Layout of apartments
  8. 8. Interior impression
  9. 9. Photo of construction
  10. 10. Photo of construction
  11. 11. Photo of construction
  12. 12. Location of 56 apartment project• Located in an area of loteamento fast growing with construction, on the border of Parnamirim and Macaiba.• Google image shows the location, with the plot of 9000m2 for 60-80 popular houses,• Local agent Da Hora (Ponta Negra) are starting to take reservations- they are really pleased with the quality of build, layout, price and concept offered, and are pro-active in their marketing.
  13. 13. Google Earth image
  14. 14. Macaiba 140 house project• Located in Macaiba, in a very good position, with bus routes and asphalted main road access, this project is ready to start with all licences ready including IDEMA.• Houses of 2 bedroom, 55 m2, on plots of 200 m2, they are targetting low income families, the largest market in Brasil.• Selling price expected to be in the region of R$80.000.
  15. 15. Maquete of the houses
  16. 16. Benefits of these developments• They are targeting low paid families which is the largest class• The first project consists of 7 buildings of 8 units and each of the units is independently supplied with water and energy, and has its own waste deposit.• There is no leisure area to create the need for condominium charges. Since the income levels of the profiled buyer is limited, they may well afford the mortgage repayments, but not extra for condominium charges. (typically 100- 250 R$ per month• Our own research and personal experience is that the leisure areas provided in the majority of the popular house accommodation, are under-utilised at best, and therefore not needed.• The second project consists of 140 houses with 55 m2 of construction, selling at similar price• Buyer can reserve without a large deposit and pay monthly payments until build is finished, and then the rest is financed by the bank.• Macaiba is growing fast, close to the new airport and close to the developing ZPE area.(Zona de Proteção de Exportação.)
  17. 17. Investment opportunity• The land and projects have been bought and paid for by na british investor who has been resident in Brasil for some 5 years, with his own money and resources.• Land banked includes 9000m2 with an outline project for 60-80 house units 3 or 4 in a terrace, units similar size to the units in the apartment project, and also aimed at similar market price. Plans for this project are in process, and will require finance to assist in the the construction.• The 140 house project is one which should be built out as soon as possible, and could be done in phases of say 25 – 40 houses. This would require financial assistance, for the build, in the region of R$1 million. Each phase would be around 6-8 months to complete.
  18. 18. Reward/Benefit to Investor• The investor does NOT need to be directly involved with the developments or sales.• The investor is secured with his loan being made with asset backing, to secure the loan. Offered security is the land mentioned earlier, 9000 m2, for a 60-80 unit development, and for which a project is being done.• Value of this land now, would be around R$500-600k. However the landowner can also offer other land assets, and /or constructed product as collateral.• Return offered is highly attractive to a passive investor, with NO RISK attached to the investment.• Investor does not need to be resident, or take risks in a market he does not know, yet still achieve returns on capital difficult to imagine, even without security, but this DOES have security.• Period for investment can be for 6 months or a year, with a return of 20% p.a interest.• How can they pay this level of interest? It is simple – when the land was bought the unit price of land, per apartment was low- with the finance cost at 25% p.a added the unit cost of land is still below the average for the market in the area. Sales price will reflect market price for land.
  19. 19. Exit strategy guaranteed• THE INVESTOR CAN CHOOSE either six months or a year, with a possible roll over option as well, for a longer period,if happy with his involvement.• Sales revenues can repay the investor earlier if requested.• High return without RISK!!
  20. 20. Other options for investment• Form a new company with investor as shareholder. This would require investor to attain residency here to participate in the work involved.• Land asset is assigned to the company• Project developed and construction started, and investor is protected by the increasing asset value in the company. Capital can be injected as a loan, with conditions of interest payments and capital repayment included in the contract.• This may be suited for someone who does wish to be involved in the project, and may be best suited for the future 60-80 unit development on the 9000 m2 land.