TIP? PREP? What are you talking about?
As you already know, with the exchange rate at an all time high, now is the time to get in on the best real estate deal in South America.
What you may not know is that you don’t have to have a few hundred thousand dollars in your back pocket to take advantage of this rare opportunity.
You also may not be aware that you don’t even have to come to Colombia to buy real estate here.. sound crazy?
In fact, for years First American Realty have been offering all kinds of turn-key investment alternatives for smaller investors to get into the market, and for the hands-off investor to buy a prepacked, income producing rental property from the comfort of their own home.
We call these investment packages TIPS (Turn-key Investment Properties) and PREPS (Packaged Real Estate Projects).
So what does that mean?
For investors considering Colombian real estate and are looking to maximize total returns with FAR International they basically can choose one of three options:
1. The traditional method of buying residential real estate and then utilizing a property management company like FARM to manage their rentals.
This method has the following characteristics:
- Investor has 100% ownership and control of liquidity decisions
- Investment is very proactive and involves time and expense to travel, visit, do showings on one or more visit, pay legal fees and closing costs and make
- Decisions regarding remodeling, furnishing and decorating.
- 95% of investors have visited and seen properties before buying.
- Average investment cost in El Poblado Medellin is $175,000 USD.
- It is visa eligible.
- Rentals will be for 30 days or longer.
- Expected net annual ROI´s of 4-8% on average.
2. PREPS (Packaged Real Estate Project) FARM´s commercial real estate option for buying entire buildings, remodeling and furnishing to a high standard and listing the properties (usually 3-5) in our short-term rental program.
For this option these are the key points:
- Investor has a % ownership in the project determined by the amount of the investment; Investor can vote on, but does not control liquidity decisions.
- Investment is passive and 95% of investors have not seen the project prior to investing; legal and closing costs are covered.
- Minimum investment for most PREPS is just $25,000 USD!
- PREPS allow for more diversification.
- It is visa eligible.
- These apartments benefit from the ability to be rented on a short-term basis (30 days or less)
- Preferred dividends typically are 8%, Plus equity upside.
3. TIPS (Turnkey Investment Properties) where FARM has identified well located undervalued properties with high rental yield potential and will partner with a single investor.
Primary points to consider are:
- Investor has 100% ownership and controls liquidity decisions.
- Investment typically is passive in that FARM has already identified the property, executes the pre-approved design, furnishing and decorating decisions, pays all legal and closing costs and does not require any travel or visits to the property.
- 90% of investors have not seen the property prior to investing.
- Typical investment price range is $85,000 to $120,000 USD.
- Allows for diversification.
- It is visa eligible* (This would require a purchase in a SAS at extra cost).
- Rentals often are for both long or short term.
- ROI´s typically are in the net 8-10% range.
- Take a look at the currently available TIP project