How can Spanish Onions create a massive pension for you?
by Geoff Morris 

Copyright 2006 Geoff Morris

Next Page

No, this is not some recipe for a good stew, rather a practical solution to removing your fears of a miserable old age. And what has caused this state of mind? How about total failure of governments, employers and the stock market to provide what we used to take for granted as our inalienable rights – a decent pension?

Unfortunately, these days deplorably, due to many reasons, standard pensions are not going to produce that comfort zone we were all expecting,

So – what has that got to do with Spanish Onions? Are we all going to cycle round the country, festooned with strings of these big, juicy vegetables, selling them at every opportunity?

Nice thought, though not really the practical one we were looking for…

No, the connection is the land that the onions were being grown on and some pretty nifty ways of growing some really fast instant equity for you, that could grow and grow and grow, with virtually no further action from you.

Now, what does the Spanish farmer do when he is growing his onions? Well, he starts with his seed onions, plants them, nurtures them, and at the end of the year he will have 4 or 5 times the seed he planted.

So, moving into the property scenario, you plant your first seed onion – the deposit on your first property, and at the end of a two year period, low and behold, you now have around 4 new seed onions. Continuing the onion philosophy, if you were to plant these new onions, in another two years time, you would probably get 4 new seed onions from each of them, or an extra 16 seed onions.

That’s enough to keep you in onion broth for the rest of your life!

Want to know how to do this?

The secret is to get in bed with a developer that is really top-notch at building houses, but absolutely pathetic when it comes to finding buyers. And would you believe, this is the scenario with many a good building company.

So, along comes a marketing company that has lots of people on its mailing list (you included). This marketing company sends out its top person to hunt for developments that have been started, but are not being marketed very well, or where the developer wants to sell his properties quickly to pull out his cash so he can start on his next project.

The marketing company gets a local Bank involved, and gets the properties valued. This will determine what the ‘loan-to-value’ of the property will be (i.e. how much the Bank is willing to lend against its valuation of the property).

Now, as there has probably been sufficient time between the development being started, and today, the value that the developer may be willing to sell is way below today’s valuation – especially where prices have been going up between 15 – 20 % every year in Spain – the marketing company manages to negotiate a really good buy price for these properties, which will be way below the actual bank valuation.

The players to date are the marketing company, the hungry developer, and a bank with money to lend.

Let’s take an example of a recent transaction. This particular property, near Murcia, one of Spain’s fastest growing economies, had a Bank valuation of €325,000, and the marketing company negotiated a purchase price of €244,000. When buying Spanish properties, there are a number of costs involved, which as a rule of thumb, come to around 11% of the bank valuation figure, which in this case was €35,750. The total cost you would have had to pay to buy this property would have been €279,000. Now that’s convenient, because the bank was wiling to lend 80% of the valuation, or €260,000, leaving €19,000 for you to find.

However, the bank being the bank, it wanted to see some commitment from the purchaser, so an 11% deposit of the purchase (which is the seed onion) would be needed from you. This would amount to €25,840 in this case. (This deposit may be increased by the Banks to 12% - you know what Banks are like).

So, at closing you would have the mortgage plus your deposit, which came to €285,840, less your closing costs of €279,000, leaving a cash-back of €6,840. You would also have had an instant equity of some €65,000 in your property.

If, however, you had then wanted to participate in the guaranteed rental income scheme, so you could easily get your rental guarantee, you will need to provide a decent comprehensive furniture pack. Solutions for these particular properties would be in the region of £€12,000, but, once again, with the power of numbers, these were made available for just €8,995, fully installed and cleaned by the provider.

So, summarizing, including the furniture pack, you would have laid out the seed capital of €34,835. (£24,532) on a property already valued at €325,000, in which you had an instant equity of €45,000. (£31,690).

Continued on next page

Next Page

About the Author:

Geoff Morris has built up a multi-million dollar property portfolio in less than 18 months. He has written a number of articles aimed to help others follow the same path to financial freedom. Imagine the peace of mind that you would achieve if you follow the advice to be found in his Free reports and consumer guides to be found at
http://www.propertyprofits4you.com . More information and latest news can be seen at
http://www.propertyhorizons.blogspot.com

Free Content Article Distributed by Publish101.com

   article use and license restrictions apply