THE FRENCH LEASEBACK

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THE FRENCH LEASEBACK Powered By Docstoc
					            THE
          FRENCH
         LEASEBACK
        Unlocking An Ideal
Real Estate Investment Opportunity


IMOINVEST International Real Estate
    PARIS - LONDON - GENEVA - SOFIA - TALLINN
   Table of Contents
!About Gregory Lu and IMOINVEST
!What is a Leaseback ?
!Why Invest in Leaseback ?
!History of Leaseback
!How the Leaseback Works
!Leaseback Basics
!Financing
!Exit Strategies
!Understanding Your Investor Type
!Understanding Real Estate Investment
!Example
!About Us
Gregory Lu and IMOINVEST
! Received business law         ! Returned to France and
  and accounting degrees          rediscovered the Leaseback.
  in France.                      Used my experience with
                                  external and personal
! Moved to the US to              companies to launch
  perfect English and             IMOINVEST International
  obtained mortgage and           Real Estate.
  real estate broker licence.
                                ! Growing quickly, we now
! Moved to Estonia,               have headquarters in France,
  worked for pension and          UK, Estonia, Switzerland,
  real estate funds to            and Bulgaria (soon to open
  establish a Baltic real         in USA and Canada); as
  estate portfolio (Estonia,      well as exclusive reps in
  Latvia, Russia).                Dubai, Netherlands, Ireland,
                                  Italy, and Thailand.
What Is A Leaseback ?
It’s as Easy as One and Two :
1. Purchase a residential property in an accredited
    building.
2. Lease it for a period of minimum 9 years to a
    management company, giving the right to the
    management company (your tenant) to rent it short
    term for its own profit.

The Leaseback Offers:
! Guaranteed Rental Income
! Carefree Rentals
! Carefree Ownership
! Tax Free Investment
! Tax Advantage
! VAT Discount
       Why Invest In Leaseback ?

•   Low risk French real estate investment
•   Add the Euro zone to your portfolio
•   Guaranteed returns of 4.5% to 6% net annually
•   Can be leveraged to create impressive potential
    returns with minimum downside exposure.
  History of the Leaseback
!Created by the French government about 25 years ago,
 the Leaseback was implanted to facilitate the
 development of tourist accommodations.
!In order to attract investors, the French government
 offered tax incentives associated with the purchase of a
 Leaseback products.
   " Refund of the VAT (19.6%) of the property price
   " Non-Taxable rental income produced by your
     property
   " Non-Taxable capital gain (larger investors)
!Creating a unique alternative, the Leaseback apart hotel
 entices the visitor with a full range of hotel services and
 the comfort of a real home, as well as affordable
 vacation destinations that allow the visitor to live as a
 real native.
     How The Leaseback Works
1.   You buy a property in France, in an accredited building,
     called a « residence de service ».
2.   You leverage your investment by financing the property via
     French Banks at 70%, 20 years, 4.5%. (30% down+5%
     closing cost)
3.   You lease your property to a selected management company.
4.   The minimum contract of the rent is 9 years, at a fixed rate
     usually from 4% to 6% net (increasing with inflation).
5.   After 6 months, you receive a refund of the 19.6% VAT
     discount on the property price from the tax administration.
6.   The tax administration allows you to amortize the property,
     if you registered yourself in a special tax status, giving you a
     non taxable rental income for about 15 years in France.
7.   For investors above €500000, if you keep your property for
     more than 5 years, you will not be taxable on capital gain in
     France.
       Leaseback Basics
The Benefits :
• Guaranteed Returns
• Tax Incentives
• Leveraged Investment
• Rental Management
• Highly Desirable Locations

The Risks:
• Timing of Cash Flow
• Automatic Renewal
• Currency Risk : Diversification into the Euro
• Usage Weeks vs. Discounted Usage
             Financing
!Available from some banks up to 80% of list price
 (price including VAT)
!Typical first year cash flow of between 55% and
 75% of cash price depending on interest rates
!Down payment : 5% to 45% of purchase
!Transfer tax and notary fees : 5% to 7%
!Mortgage fee : up to 1% of the mortgage
!Price start at $90,000
!Minimum Cash $10,000
        Exit Strategies

• Sell during the initial 9
  year lease

• Sell after renegotiating a
  new lease

• Sell after owning the
  property at least 15 years
                    Example
• $119,600 property = $100,000 cash price
• Finance 70% of list price = $83,720 or 83.72% of the cash
  price (after VAT discount)
• Cash needed at closing = $35,880
• VAT refund = $19,600
• Real cash invested = $16,280
• Rental income year 1 (5.5%) = $5,500
• Interest on mortgage 4.5% = $4,500
• Property expected growth (5%) = $5,000
• Return on cash invested = 37%
• HIGHER LEVERAGE AND VAT ADVANCE
  AVAILABLE ON SOME PROPERTIES
Identifying Your Investor Type

                         The Goal :
Understand your Investor “Type” to clearly explain your needs
       and find the property that best fits your criteria.

     ! Budget and Financibility
     ! Area Preference
     ! Focus : Rental Income
     ! Focus : Capital Growth
     ! Focus : Vacation Usage
     ! Focus : Personal Ownership
Understanding Real Estate Investment

                       The Goal :
    Understanding what’s out there, what’s right for you,
             and what to do once you find it.

    ! Choosing the Ideal Region and Location
    ! Choosing the Ideal Locality and Development
    ! Choosing the Right Flat
    ! Be Logical
    ! Ask for Help
    ! Be Decisive
                       Our Services
     INVEST IN YOUR PEACE OF MIND : IMOINVEST INTERNATIONAL
        The #1 Real Estate Investment Brokerage and Leaseback Specialist
A FULL SERVICE COMPANY BY YOUR SIDE THROUGHOUT THE INVESTMENT

•   LEASEBACK / INVESTMENT PROPERTY SPECIALIST
•   FINANCIAL SERVICES
•   CURRENCY EXCHANGE
•   PROPERTY SEARCH
•   INTERNATIONAL PROPERTY RESALE SERVICES
                                            Contact Us
                                                                                   Visit Our Website
                                                                                  for 5000+ Properties
                                                                                       Throughout
                                                                                  France, Spain, Italy,
                                                                                   Bulgaria, Estonia,
                                                                                   Switzerland, USA,
                                                                                Caribbean, Morocco, and
                                                                                         Canada

                                                                               www.IMOINVEST.com

     IMOINVEST                  IMOINVEST                  IMOINVEST              IMOINVEST                 IMOINVEST
       France                  United Kingdom                Estonia                Bulgaria                 Switzerland
Tel : +33 (0)1 5363 3330   Tel : +44 (0)208 960 5888    Tel : +372 631 3970    Tel : +359 2 964 1055   Tel : +33 (0)1 4425 9232
       Email :                    Email :                      Email :               Email :                  Email :
 paris@imoinvest.com       london@imoinvest.com        tallinn@imoinvest.com   sofia@imoinvest.com     geneva@imoinvest.com

				
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posted:2/24/2012
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