PROSPERITY
The “Prosperity” project is about creating a portfolio of apartments for short-term lease (up to 90 days) with a stable revenue for a period of five to ten years and then selling it to an investment fund.
The essence of the product:
Step 1: Portfolio creation: purchase and renovation of the initial apartments
Step 2: Renting apartments and resale, to increase portfolio revenue
Step 3: Selling the portfolio to an investment fund
We use the compound interest methodology to create the portfolio. So, profits earned during the year are not paid to shareholders but are reinvested to buy extra apartments. Thus, there is no income tax, VAT does not apply to short-term rentals and the resale of secondary market housing.
We offer you the following ownership structure to invest in the project:
The Luxembourg holding company ⇒100% ⇒ French real estate marketer
100% of the shares of the Luxembourg holding company will be sold to an investment fund, the sale of shares is subject to Luxembourg taxation, which is better for an investor.
Our team of tax lawyers is ready to provide a model for investing, holding, managing, and selling assets to each investor individually, depending on the country of the investor’s tax residence.
Download our presentation to discover 3 options of ownership we offer
We only choose apartments in the regions with stable growth of speculative sales of real estate and also with short-term rental profit for the portfolio.
The key criteria for investing are quantity, quality, and occupancy rate of international exhibitions and congresses in a region. According to these criteria, the best performers in Europe today are the Côte d’Azur, Paris, and Milan.
Real estate acquisitions
We buy apartments at the best possible prices, to do this we use our long-term connection in the real estate market and we also buy at specialised auctions.
In the past six months, more than 200 properties in the south of France have been sold at auction. The average price was €2,226/m2, while the average market price is €4,747/m2 for secondary market housing.
The total price of apartments sold at auction in the past six months is 35 million euros.
Property management
The French real estate trading company makes all the contracts for renovating apartments, buying furniture, and signing an agreement with a management company which coordinates the rental, minor works, and tax payments.
All local agencies will have non-exclusive mandates for the short-term rental and sale of the portfolio apartments. Information on the apartments will also be displayed on the following websites:
Portfolio rotation
The apartments purchased will not only generate rental income as we will also constantly make sell-buy deals to keep only the best available apartments on the market for the portfolio.
As practice shows, it takes an average 8 – 12 months to buy, renovate, and resell an apartment with 15 to 20% profit, if the apartment is bought on the market. In the case of the acquisition of real estate at auction, the profit increases.
Below you will find a provisional calculation for the project.
Option 1 / 100% your own funds:
1st year
-
- Initial investments for purchase + renovation apartments = €100
- Resale income 15% = € 115
- Profit = €15 first year
- Reinvesting profit € 15
Option 2 / 35% your own funds, 65% bank financing
1st year
-
- Initial investments for purchase + renovation apartments = €100 (€35 equity + €65 bank financing).
- Resale Income 15% = € 115
- Profit = €15 first year
- Bank rate: currently Euribor + 1.2% per year (use 1.2% for the calculation)
- Bank rate € 0.78
- Reinvesting profit € 14.22 (or 40.60% profit on own investments)
Profit is increasing each year due to using the compound interest methodology to create the portfolio. So, profits earned during the year are not paid to shareholders but are reinvested to buy extra apartments. Thus, there is no income tax, VAT does not apply to short-term rentals and the resale of secondary market housing.
The business plan and financial plan are prepared after agreeing on an investment strategy with each investor individually.