High yield investment

Income from investments. Deal example

I'll give an example of how high-yield assets are created (using our most recent transaction as an illustration).

The investor purchases a 1+1 apartment with a surface area of 68 m2 on the third floor in a complex under construction, complete with built infrastructure (outdoor and indoor pools with children's slides, a hammam, a sauna, and a playground).

The price of a one-room apartment on the 10th floor is around €76,000! At the same time, the complex's prices rise by 10% two weeks after purchase (the developer always informs our firm about price hikes ahead of time in order to allow us to speed up the decision and buy at a discount).

Ease of transaction. Remote purchase

The process of buying real estate in a complex under construction does not require the investor to deposit a large amount of money immediately, or even visit Turkey. In this case, the investor made a decision remotely, having familiarized himself with information about us and the developer and seeing the location of the complex on google maps.  Next is the most interesting. Having made a decision, it is enough for the investor to pay a deposit of 2,000 euros to reserve an apartment and sign an investment and purchase agreement with the developer. This can be done both at the developer's office in Turkey, and remotely (as in this case).

By way of remote funding, the investor sends money to the developer's account or issues a power of attorney to an employee of our firm (our employees fly to Turkey 1-2 times a month) to deposit money in favor of the developer.  In this instance, the contract is signed by the parties in electronic format after which the developer sends it to the buyer or a representative of our firm by mail.

Financial component

So we figured out the legal and procedural intricacies, now let's talk about the financial side of the deal. The developer provided an interest-free payment schedule for the total amount of the transaction to the investor. Under a loan agreement, the investor pays half of the sum in 13 equal installments of 2,000 euros each during the year (the first payment is a deposit). The remainder of 26 thousand Euros must be paid after the facility is completed. He must formally do so. In reality, he has two alternatives to choose from depending on his investment's goal

1. If the investor wants to leave the apartment for rent or for personal use, then he can take a loan from a Turkish bank for these 26 thousand at 7.8% per annum (our company accompanies this process from start to finish). Turkish banks have a long history of lending to foreigners at a 50% discount on apartment prices. In this case, the investor will be able to cover all of his loan expenses (250 euros per month for a loan for 15 years) by renting out an apartment. Given the 5-6 thousand euros yearly net profit (i.e., 10-12% of the apartment's cost or 20-24% of investor personal funds invested) that renting out such an apartment will generate, and the 3 thousand Euros loan that will consume only 3 years, there will be 2-3 thousand Euros in annual net profit for investor.
2. If the investor expects to make lucrative investments and wishes to sell the apartment once the development is completed and the final price has been determined by the developer, he or she may do so through the assignment in favor of the buyer. In this instance, the investor won't be responsible for any additional costs associated with completing the transaction.

In this case, the new buyer pays the rest of the amount to the developer.

Let's estimate the income of the investor. Taking into account the fact that initially, the investor invests 2 thousand euros, and by the end of construction, he has invested 26 thousand euros, then on average during the year the amount of invested funds is (2 + 26) / 2 = 14 thousand euros. The selling price of the apartments (based on past experience, market situation, and market trends) will be 70-75 thousand euros (an increase of 18-23 thousand euros or 35-44% of the original price). However, taking into account the average amount invested by the investor (14 thousand), such growth gives fantastic profitability of ... 129-164% per annum (18/14 and 23/14, respectively). So, we are convinced that high-yield investments with a return exceeding 100% per annum are not a myth, but a reality! And the relative rate of return (in%) when using installments is almost 4 times higher than the rate of price growth (Leverage effect).

For greater clarity, we illustrate this example in tabular form:

Indicator	Forecast Min	Forecast Max
Purchase price	€52 thousand	€52 thousand
First installment	€2 thousand	€2 thousand
Invested per year	€26 thousand	€26 thousand
Average invested during the year	€14 thousand	€14 thousand
Sale price	€70 thousand	€75 thousand
Net income	€18 thousand	€23 thousand
Profitability	129 %	164 %

This example is indicative and only illustrates the possible options for investing in high-yield investments in overseas real estate. This scheme can be applied for investments in apartments at a price of 30 thousand euros. Installment terms, transaction amount, and other conditions may differ. Our company will always help you professionally select the most optimal investment case exactly for your request.