List of current GV real estate projects - experiences

Greetings. I have been doing a bunch of research and thought it would be good to consolidates all the current projects that we have each investigated for a Portugal GV. Here is where I am right now:

  1. Mercan: Lagos. Lots of posts about this project. 280K Euros, buyback, total cost of program (depending which cost calculator they send you) is $317K-$319K.

  2. Mercan: Porto Lapa II: 350K Euros, gross returns five years 52,500, investment buyback. Total program cost: 338,438

  3. Investaureum: Covento. They have a 280K Euro option with a buyback. Their catch is they have a 5,000 Euro MOA fee that they charge to get started. It’s a fee for future management of the property and coordinating with you. They won’t waive. Operations should start late 2024 but they have not broken ground.

  4. Investaureum: Covento. 300K freehold option for a 1 bedroom unit. 3% yield after operations start late 2024. Total program cost 330,886 Euro. You do own the deed to your apartment and it is part of the hotel group. so like Mercan you get seven days a year to use it. they also have other freehold options for larger units. There is no guaranteed buyback, so you get whatever the market price is when you sell.

  5. Investaureum: Residence Anatara. 390K freehold option. 4.5% yield guaranteed for the first three years that totals 53,325. Then roughly a 3.89% yield (not guaranteed) afterwards. So that’s another 46,051 in years 4-6. It’s a larger two bedroom unit. The upside is that the project is already under construction (it’s an addition) and is supposed to be in operation late 2023. total cost of ownership is 338,359 euros. There is no guaranteed buyback. So if you sell, it’s whatever the market will pay.

The are the ones I have looked into so far. So the question for the group.

  1. The 280K deals with guaranteed buyback pretty much costs out of pocket is about 38K euros for all the fees. If we use a 3% inflation rate (which seems awesome right now, but let’s hope things cool off) for the next seven years to get your passport then the 280K is really only worth about 227K when you get it back. So said another way you are spending roughly 90K euros to buy a Portuguese citizenship. This is assuming Mercan or other deals all do the buyback when they are supposed to.

  2. The Freehold deals all have a yield which sounds enticing especially if getting a passport takes longer than seven years which right now reading everything could happen. They don’t guarantee their yield (except the residences project above guarantees the first three years) which means they could pay back nothing. Also there is no guaranteed buyback when you get your passport. With that risk comes the upside. You own your own deed to the property. These properties tend to be more boutique and in places I would not mind spending a week. They are selling you on the promise that some other investor will want to buy these freehold units in the future because the return (yield) is more operationalized and consistent. Supposedly a 3-4% return in Euros is a good investment. I guess in the US we think our stocks should return 7-8% on average. One other downside is more cash out of pocket day 1 with the hopes of a return in the future to get you to around the same cost of program.

Let’s discuss. I’m struggling deciding which direction to go.

It’s getting pretty confusing.