HOW DOES IT WORK?
The formula is pretty straightforward;
Buy a large chunk of land at the most competitive price in a suburban part of a major Brazilian city.
Subdivide the land into smaller plots designated for residential homes
Finance the sales to local Brazilian buyers on a monthly instalment basis over a 10year period.
WHAT ARE THE PROFIT MARGINS?
It is best to give an example here for the lowest end of the market;
Let's say you buy a 5 hectare land parcel(50,000m2)for 500,000reals
40% of this land must be allotted to roads/pavements(20%)and green areas/community facilities(20%)
This gives you 3 hectares to subdivide(30,000m2)
Standard plot size for the popular market is 200m2(10x20mts)
This yields 150plots.
Each plot can be sold for 200reals per month over a 10year period(the deposit is paid to the agent as commission)
24,000x150=R$3.6million
The monthly instalments are price indexed.
Plots can sell for double this price or more depending on the desirability of the location.
The 20% costs involved include licensing,advertising,providing basic infrastructure(with installation of roads,power lines and water supply to service the plots) plus administration of sales revenue.
WHAT ARE THE BENEFITS?
Ability to multiply your land asset.
Ready demand for the product
Constant liquidity over 10year period
Huge profit margins
Limited liability
Exit strategy in place(repatriation of profits)
WHAT IS THE PROCESS?
1.Purchase the land and acquire a public deed.
2.Contract an engineer to submit a project to the local prefecture with design,chronology for delivering the infrastructure,water/electricity supply,road,green area distribution
3.After municipal approval,the project is analysed by state,environmental departments.
4.The project receives a permit(Alvara)from the municipality
5.Notary office registers the whole site plus individual plots
Please contact me for more information on the setting up a loteamento in Brazil
Mike Smith
Real Estate Professional in Brazil
License number;3125
Website; http://www.brazbeachhouse.com
Blog; http://brazilbeachhouse-wwwbrazbeachhousecom.blogspot.com.br/
FB; http://www.facebook.com/pages/Brazil-Beach-House/126654720715275
Tel; NATAL,BRAZIL
Office ; 0055 84 2010 9807
Cellular; 0055 84 8807 5651
SKYPE ; mikebrazilbeachhouse
E-mail ; mike@brazbeachhouse.com
