Hi , Yes i heard of the deal in Dubai , i was staying at the ADDRESS hotel , i have never stayed at such a well run hotel , it is amazing , i read about the deal in the local papers there , my brother visited Lavagnac last week , he tells me the site is just stunning , and the work on the golf has begun , the deal is only for a tranche of phase 1 and will not be offered after thay have gone ? we were told that they are over 60% sold on the deal in the first Month and would be done by the middle of July ?
If the Address are doing the OPERATING then it's going to be fantastic , My brother has signed up for a Apartment on the deal , but i wish to use the property more than 4 weeks per year so have enquired about a upstairs apartment 375,000 and we use the 50/50 deal they are offering where i can use the it for up to 6 months per year if i want , considering the quality going into the project i think the prices are really good and i was told that a full campaign of sales sarts in the Autumn so it seems a good time to reserve the Location NOW ??? webber
Don't forget to factor in the growth of interest over the two years of construction when calculating your payements.
Should the limited capital company holding the lease go broke, what is the security of income? There is no bond or insurance in place. The management has a lease with the holding company but not with owners. That sub-lease could be turned over to the owners for non-payment and the clause: 'At any time during the 25 years, the 7% return can be exchanged for a 50/50% split' could be invoked. (would this include unused personal weeks?).
Where have you seen the clause : 'At any time during the 25 years, the 7% return can be exchanged for a 50/50% split' could be invoked. (would this include unused personal weeks?).
is this all doom and gloom?
I understand that the 7% is only offered to a small number of properties and not to the whole development.
I also understand that the larger properties have been bought by investors - who are not expecting any sort of lease back from a management company.
For Phase 2 Domaine are only offering 5 (+/-)%, and all cost woudl have to be covered by the buyer. Speaking with Sam Winters he said 7% was only offered to stimulate offers and interest but this could not be continued with the rest of the phase.
Also remember that the management contract is with Address group who are one of the largest hotel groups in the UAE. Domaine will be there flag ship into Europe.
i CANT MAKE YOUR MIND UP , BUT GOOD LUCK , SINCE I READ YOUR NOTE IT SPURED ME ON AND AGREED A 3 BED SEMI ( MERLOT ) THIS AFTERNOON ON THE 50/50 DEAL HAVING A GLASS OF WINE TO CELEBRATE , THANKS FOR PUSHING MY DECISION GOOD LUCK WITH YOURS ,, webber ,,
On resale or at any time during the 25 year term, the owner of the property can switch from the 7% of original purchase net return to the option of sharing “50% / 50%” of net revenue. This will ensure growth on resale values and enable owners to switch to proven market related rentals.
There is no clause in the Bail Commercial but by having such a clause in the contract which would come in effect directly with the management company, bypassing the lessee company of 7,500 euro capital, if contractual 'guaranteed' incomes fail to be paid would be sincere security. In a commercial contract, wouldn't a bank want access to an existing sub-lease to secure their money? Such a contractual covenant is less expensive than posting a bond or insurance as security. What would be the counter arguement?
Dubai-Nomad: It matters little who is managing if the lessee isn't paying. Unlike BTL, you are part of a group and can not rent independently; you will carry the costs until the Conseil Syndical finds a solution.
I have heard of project, St Thomas near Béziers, which the Cox brothers are involved in, unless I have been misinformed. It would be interesting to see if it has achieved viability after ten years. Anyone able to find information?
Not only you loose the rental income and will be left with an overpriced property. When Ronin says "It matters little who is managing if the lessee isn't paying... finds a solution" I think he forgot to add the fact that you will become liable to repay for the VAT to the French government. So don't forget to keep 20% in cash on your bank account...Pavel40303.4103703704
Societe Generale is one of the oldest banks in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />France. Most who are working through the broker representing the developer's interest, French Mortgage Direct, will be referred to this bank. They report that they also represent Credit Agricole and Caisse d’Epargne.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
IPIN Global agency is directing their clients to HSBC Bank.
While there is risk that the lessee may run into difficulties doesn't mean you are in the position to pay back the VAT. This is only applicable if you sell and even then, that is pro-rated. The difficulty lies in paying the mortgage while the copropriété syndic figures out how to handle the situation and find a new lease holder who will honor the 7% return. Here lies the overall risk. The solution is as I've mentioned before: security bond or insurance, which would be an added cost to the developer and therefore not expected, the third, which I can see no reason why such a covenant couldn't be afforded, is to offer the lessee's contract with the management company to the property owners in the case of default payments. If business is good, no cost, and no risk; if business goes bad, then the financially troubled lessee, Résidence de Lavagnac, is removed from the equation and all is preserved.
Myself, I'm bidding my time until the last moment before making a commitment. I thought someone on one of these forums would have more assuring and firm information countering the obvious risk inherent in this contract such as it's vagueness.
I have opposing information on this subject: A lawyer read in the inital draft that the rent in kind will consist in the right to occupy the property (either personally or for friends and family) while the Ms. Jeanty offers that only the owners will enjoy personal use.
No i am not a agent and i did not buy through your source by the sounds of it , my brother and i have bought through Lavagnac direct ? sorry to mis-lead you ?
Based on what you have written above I would suggest you go away and do some more research before you enter into any leaseback.
I am now 6 years down the line from signing for my first leaseback and am now in a money making position for the first time. However it will take me another 3 years to get my losses back providing nothing else goes wrong. I also potentially have another 2 legal battles to get through. I have no capital growth and no original leases.
You have got to be the hunted rather than the hunter with the French legal system!
Thank you for your constructive advice Mutley, although, if I decide to follow through, this will be my third leaseback project. I am not disgruntled nor disillusioned but I would point out that being the hunted would also eventually imply being the victim.
Six years to be in a money making position? Given your financial situation, I suggest you take your own advice.
If I have mis-stated myself, I humbly welcome anyone to correct me so that we may all profit.
English
Français
Hi , Yes i heard of the deal in Dubai , i was staying at the ADDRESS hotel , i have never stayed at such a well run hotel , it is amazing , i read about the deal in the local papers there , my brother visited Lavagnac last week , he tells me the site is just stunning , and the work on the golf has begun , the deal is only for a tranche of phase 1 and will not be offered after thay have gone ? we were told that they are over 60% sold on the deal in the first Month and would be done by the middle of July ?
If the Address are doing the OPERATING then it's going to be fantastic , My brother has signed up for a Apartment on the deal , but i wish to use the property more than 4 weeks per year so have enquired about a upstairs apartment 375,000 and we use the 50/50 deal they are offering where i can use the it for up to 6 months per year if i want , considering the quality going into the project i think the prices are really good and i was told that a full campaign of sales sarts in the Autumn so it seems a good time to reserve the Location NOW ??? webber
Here is a list of French property prices: http://www.french-property.com/news/french_property_market/c ity_property_prices_france_2010/
For lack of a proper comparison, it would be fair to select Montpellier at 2,500/m. (80m x 2,500 = 200,000)
A search engine can match you with a calulator for the present value of a 7% over 25 years. (25yrs, 7%, ~25,000/12, FV=0, PV=~48,000)
Here is a link to the latest French mortgages for leasebacks and others:
http://www.athenamortgages.com/French_Mortgage/Best_French_M ortgages.php
Don't forget to factor in the growth of interest over the two years of construction when calculating your payements.
Should the limited capital company holding the lease go broke, what is the security of income? There is no bond or insurance in place. The management has a lease with the holding company but not with owners. That sub-lease could be turned over to the owners for non-payment and the clause: 'At any time during the 25 years, the 7% return can be exchanged for a 50/50% split' could be invoked. (would this include unused personal weeks?).
Im well up in the waiting list for one, have to decide this week whether to go for it or not. In two minds still.
Ronin,
Where have you seen the clause : 'At any time during the 25 years, the 7% return can be exchanged for a 50/50% split' could be invoked. (would this include unused personal weeks?).
is this all doom and gloom?
I understand that the 7% is only offered to a small number of properties and not to the whole development.
I also understand that the larger properties have been bought by investors - who are not expecting any sort of lease back from a management company.
For Phase 2 Domaine are only offering 5 (+/-)%, and all cost woudl have to be covered by the buyer. Speaking with Sam Winters he said 7% was only offered to stimulate offers and interest but this could not be continued with the rest of the phase.
Also remember that the management contract is with Address group who are one of the largest hotel groups in the UAE. Domaine will be there flag ship into Europe.
i CANT MAKE YOUR MIND UP , BUT GOOD LUCK , SINCE I READ YOUR NOTE IT SPURED ME ON AND AGREED A 3 BED SEMI ( MERLOT ) THIS AFTERNOON ON THE 50/50 DEAL HAVING A GLASS OF WINE TO CELEBRATE , THANKS FOR PUSHING MY DECISION GOOD LUCK WITH YOURS ,, webber ,,
Switching to 50/50 net rental
On resale or at any time during the 25 year term, the owner of the property can switch from the 7% of original purchase net return to the option of sharing “50% / 50%” of net revenue. This will ensure growth on resale values and enable owners to switch to proven market related rentals.
http://www.sapropertyinvestor.co.za/investments/domaine_de_l avagnac/docs/Brochure%20Domaine%20de%20Lavagnac.pdf
There is no clause in the Bail Commercial but by having such a clause in the contract which would come in effect directly with the management company, bypassing the lessee company of 7,500 euro capital, if contractual 'guaranteed' incomes fail to be paid would be sincere security. In a commercial contract, wouldn't a bank want access to an existing sub-lease to secure their money? Such a contractual covenant is less expensive than posting a bond or insurance as security. What would be the counter arguement?
Dubai-Nomad: It matters little who is managing if the lessee isn't paying. Unlike BTL, you are part of a group and can not rent independently; you will carry the costs until the Conseil Syndical finds a solution.
I have heard of project, St Thomas near Béziers, which the Cox brothers are involved in, unless I have been misinformed. It would be interesting to see if it has achieved viability after ten years. Anyone able to find information?
So basically what we are saying is if the lesse goes under, we loose the 7% income and would be lumbered with a over priced property.
What is the relationship between the lesse and the Address group? Are they the same thing?
I bet you're an agent really . Thought they werent taking reservations from people at the top of the list until today.
Still undecided
Not only you loose the rental income and will be left with an overpriced property. When Ronin says "It matters little who is managing if the lessee isn't paying... finds a solution" I think he forgot to add the fact that you will become liable to repay for the VAT to the French government. So don't forget to keep 20% in cash on your bank account...Pavel40303.4103703704
The following bank is financing this development :
The bank Societe Generale http://www.societegenerale.com/
Anyone heard of this bank?
Societe Generale is one of the oldest banks in <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />France. Most who are working through the broker representing the developer's interest, French Mortgage Direct, will be referred to this bank. They report that they also represent Credit Agricole and Caisse d’Epargne.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
IPIN Global agency is directing their clients to HSBC Bank.
While there is risk that the lessee may run into difficulties doesn't mean you are in the position to pay back the VAT. This is only applicable if you sell and even then, that is pro-rated. The difficulty lies in paying the mortgage while the copropriété syndic figures out how to handle the situation and find a new lease holder who will honor the 7% return. Here lies the overall risk. The solution is as I've mentioned before: security bond or insurance, which would be an added cost to the developer and therefore not expected, the third, which I can see no reason why such a covenant couldn't be afforded, is to offer the lessee's contract with the management company to the property owners in the case of default payments. If business is good, no cost, and no risk; if business goes bad, then the financially troubled lessee, Résidence de Lavagnac, is removed from the equation and all is preserved.
Myself, I'm bidding my time until the last moment before making a commitment. I thought someone on one of these forums would have more assuring and firm information countering the obvious risk inherent in this contract such as it's vagueness.
I have opposing information on this subject: A lawyer read in the inital draft that the rent in kind will consist in the right to occupy the property (either personally or for friends and family) while the Ms. Jeanty offers that only the owners will enjoy personal use.
No i am not a agent and i did not buy through your source by the sounds of it , my brother and i have bought through Lavagnac direct ?
sorry to mis-lead you ?
Ronin
Based on what you have written above I would suggest you go away and do some more research before you enter into any leaseback.
I am now 6 years down the line from signing for my first leaseback and am now in a money making position for the first time. However it will take me another 3 years to get my losses back providing nothing else goes wrong. I also potentially have another 2 legal battles to get through. I have no capital growth and no original leases.
You have got to be the hunted rather than the hunter with the French legal system!
Mutley
Thank you for your constructive advice Mutley, although, if I decide to follow through, this will be my third leaseback project. I am not disgruntled nor disillusioned but I would point out that being the hunted would also eventually imply being the victim.
Six years to be in a money making position? Given your financial situation, I suggest you take your own advice.
If I have mis-stated myself, I humbly welcome anyone to correct me so that we may all profit.
Ronin
If only you knew and if only I could tell!
Mutley
Well I have reserved a two bed penthouse. Still not sure whether I will see it through.
Mutley,
Spill the beans.....why are you being so coy? If you have hatched a plan to beat the crooks why not immortalise it by spreading the good word here.
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