Innovation in real estate: How to turn safe haven assets into a triple win of returns

04 Sep '20

In the long term, the annual appreciation rates of real estate investments tend to be zero. INMSA’s disruptive model generates net returns of more than 10% on a yearly basis through sophisticated investments in developed markets. This is a great opportunity for Latin American investors seeking not only to protect their capital from the volatility of the pandemic but also to maximize it.
Historically, real estate investments were considered low-risk alternatives to diversify portfolios and maintain value against inflation. Through developers or real estate brokers, dealing with the production or sale of properties, the traditional investors acquire assets which are usually kept for a long time, having one single variable to increment their equity: their rental income. Such income is becoming increasingly lower around the world with an annual 3% average rate. For a sophisticated investor, this is old school. INMSA´s customized solutions include discount rates during the acquisition process as a fundamental variable and a strong appreciation rate which takes place after a crisis, offering a window of opportunity which depends on the cycles of the market.
With more than 15 years of experience and a track-record of more than 10% annual net profitability, INMSA manages the investments of Latin American families´ large portfolios in developed markets. Particularly in the USA and Spain. “We carry out the process from start to end: acquisition, management and sale of the assets. This process takes between 3 and 5 years, depending on the investor´s profile, the markets involved and the assets invested in, says Mariano Capellino, director of INMSA.
As it happened after the global crisis in 2008, the real estate market usually undergoes cyclical depression periods where banks, courts and governments auction all types of properties. Including reorganization and bankruptcy proceedings and even divorces, discount rates bring opportunities for those who are ready to grasp them. Based on a careful analysis of the market, INMSA has been able to close operations of up to 30% under the market price, plus a steep rebound curve. This expertise is combined with the management of assets: remodeling or repairing, and the administration of the rental process. “For those investors who are willing to obtain high returns and operate with our management processes, this model is superior”, says Capellino. But he also makes it clear that “management uncertainty does not mean risk: buying a remodeled property and with a tenant is riskier to us, as its value will be higher than a deteriorated and vacant property, but the possibility of adding value enables to increase the return on the investment”.
The global crisis of the coronavirus outbreak brings interesting opportunities in stable and legally secured markets such as Spain. With the drop of the GDP and the economic activity, banks start to release their inventory and opportunities are offered mainly in offices, stores and hotels. Instead, in the USA, a market with minimum inventory and strong volume of sales due to the recent reduction in loan interest rates, provides few opportunities and the city of Detroit continues to stand out after its bankruptcy in 2013 and it is still in the recovery process.
Opportunities are there, even during crises. You only need to know how to benefit from them.

If you need advice on Real Estate Investments, contact us by clicking here

Source: Bank Magazine

© 2024 - INMSA.

The content of this document is confidential and was developed by INMSA to provide preliminary and summarized information about this company and the investment opportunities offered by it and the use of this content for any other purposes shall not be allowed. This is exclusively for information purposes and it does not intend to be an offer or recommendation to acquire or sell any real estate or other values and it does not constitute an invitation to submit bids to acquire or sell any real estate or other values. Where applicable, INMSA will only provide preliminary information about investment opportunities and will handle the management processes thereof according to the instructions given by its clients.
The transfer, distribution or copy of this document shall not be allowed in any manner whatsoever and any violation to such rule, either regarding the entire document or part of it, shall constitute a violation of the applicable laws in the United States of America and other jurisdictions where INMSA operates and/or where this documents is submitted.
Any offer for real estate investment shall be exclusively performed by formally submitting all the necessary legal documents, which are not included herein, and such documentation must be revised and analyzed independently by each investor and their finance, legal and tax advisors and experts. In the event that any conflict arises between this document and the abovementioned legal documents, the latter shall prevail.
Neither INMSA nor its affiliates or subsidiaries, partners, directors, agents or employees make any representation or warranty, express or implied, about the accuracy or completeness of the information contained in this document and it shall not be considered as a promise or representation of any past or future performance. This information includes estimates, projections and analysis and judgment elements which have not been verified by INMSA or its affiliates, subsidiaries, partners, directors, agents or employees on an independent basis, therefore, no representations are made as to the accuracy of this information, for that reason, recipients of this information must conduct their own analysis process.
The conditions referred to in this document shall not constitute an offer to sell or an invitation to submit bids for the acquisition of securities or instruments, these conditions shall not apply to the territory of the United States of America and shall not available for investors residing in the United States of America or nationals of such country. Therefore, the instruments described herein have not been filed with the federal authorities of the United States, as enforced by the applicable regulations, in some cases, by the Securities Act of 1933 or with any other federal or state regulatory entity (and have not been filed with any other authority in a jurisdiction outside the United States of America).
INMSA is a company specialized in conducting the necessary management processes so that its clients can make profitable investments, by coordinating and facilitating the relationship between the investor and the different service providers and professionals (lawyers, accountants, realtors, real estate brokers, administrators, property management companies, contractors, service providers, financial entities and any other person and/or company involved in the investment process made by the investor), all of them being independent from INMSA, and their contracting is the sole and exclusive decision of the investor, under its own responsibility, releasing INMSA from any type of liability for any acts, actions and results performed by them.
Based on the above, neither INMSA nor its affiliates, subsidiaries, partners, directors, agents or employees shall liable, at civil, commercial or criminal level, for any damages that might be sustained by the investor when carrying out operations taking as reference the information, evaluations and opinions given by INMSA.