We`ve grouped your most common questions into 3 sections: land buying process, safety & realising your investment. Of course, if your question isn`t answered here, please contact us directly – we`re happy to help.
1. Buying process
What is the minimum investment period?
Does everyone in the fund have to exit at the same time?
It makes it a lot simpler if the length of time of the investment is pre-written into an agreement when the company is started.
Are we able to get local mortgages to make our buying power greater? If not it would make more sense to invest in bricks & mortar where the capital exposure is less and we are making use of banks money?
As we have built a track record of trading, we are now finding banks willing to lend to us for land deals, something that they have not widely been doing in Romania. So leveraging is now a real possibility. We are seeing that as an asset class land has the highest return on investment in Romania currently.
Is it safe to invest in a Romanian company?
Yes. As a member state of the EU, Romania must now abide by similar rules in their company law that protect shareholders.
How do we know our money is being used to buy the best land deals possible?
WE ONLY work on profit on exit strategy and manage the company and its assets and costs. Hence it is in our interest to get you the best! The better the location and deal the more likely prices will increase dramatically and the greater our performance bonus. We`ve been careful to make sure our interests as investment managers are closely aligned with those investing.
How is the money introduced safeguarded?
For all transactions over €1M, All investors are made shareholders of the newly formed investment company. Their signatures are required before land owned by the fund can be sold in order to buy new land. As a minimum, the signatures representing the majority shareholders will be sought, before major transactions. For all transactions under €1M, a separate loan agreement and deal/project based shares are assigned and managed by the company accountant and lawyer for the agreement.
What`s the worst that happen with a land deal? Can the money be lost?
It is highly unlikely. The worst that`s happened in our experience is when the land doesn`t appreciate as quickly as we would have liked. In this case the capital is still protected and we`d advise on the best strategy for accelerated capital growth or EXIT.
Have any previous deals gone sour?
Yes, in the sense that we have pulled out of deals- usually when sellers have pushed prices too high for our strict buying criteria. Have we ever lost any of our or our inevstors cash – NO!
Can we speak to previous investors?
Yes, of course. Our track record speaks for itself. Check out the case studies in the Assurance section. If you want to speak to any previous or current investors just let us know.
Once money is introduced, what`s to stop your finder paying an inflated price for a piece and splitting the difference with the land finder?
Well if this came to light he/she would lose an extremely well paid job. We pay the local people that work with us handsomely (even by UK standards!) and the trust we have built up, and their knowledge of our ethos means that they don`t engage in unfair practices.Our incentive policy drives a good behaviour and hence we get the best deals first compared to market prices which are tested regularly in order to ensure a good price !
3. Realising your investment
How does the land sales process work?
We will contact you before the end of the investment period/Exit strategy execution, to let you know our plans and recommendations re the sale of assets.
We will either sell via our extensive sales channels (often the big agents, our own sales force and the various networks we have in the market place to sell) or alternatively sell to developers. In simple terms, the two parties agree a price and a buy sell contract is executed in front of a notary that would check all legal owners and sellers shareholders agree (if via a company) and the administrator has the right to sell. Once that is done, the contracts are signed and monies exchanged via the bank and the notary.
Once land is sold, where does the money go? What is the process of transfer?
We recommend monies are held in the investors bank account with a 3rd party signatory until the distributions have been agreed.
If investors want to remove their money, what is the process?
If it is during the investment term the capital amount can only be withdrawn under certain circumstances. It is much better to leave it in for the pre-agreed investment period.
Who has previous land been sold to at the end of the investment period? Will the demand for land be there when we come to sell?
We usually sell to corporate developers, property funds, or other land investors. Demand is currently very high for quality, sizeable pieces of land and is likely to remain so for the next 3 years. Majority of the end users demand comes from he local Romanians who want to own land to build their own houses.
What about liquidity? If we want to sell up quickly how are we likely to find a buyer at the price we are looking for? We could be left with land we can`t sell given the high prices we`re looking for..
If all (or a majority of) shareholders are in agreement, then we will sell. In any situation selling quickly and before the end of the investment term will not get the best returns possible. However due to the high demand for quality land it is still likely that a quick sell such as this would result in gains that outstrip an investment in UK property over the same timescale.