I would appreciate your thoughts on this matter. Have been approached by company ( registered financial services company) that deals in short term loans / financing. The company is based in a country that has not been affected by the credit crunch, banking regulation is much stricter, currency very weak at present and economic outlook looks to improve ( feedback of the locals - not the provider).
It works as follows:
Property owner sells their house. The time it takes for the transfer can be 6 - 8 weeks ( in this particular foreign country). In the meanwhile, the property owners needs financing for personal reasons, possibly in financial trouble or has to pay a deposit on a new house.
I as an investors ( me) "lends" this money to the property owner that needs the short term financing @ .75% per week. My money is secured against the mortgage of the seller including the deposit- this is managed by my lawyer and the bank ,which is subject to contract. So, property sales contract is signed, 10% deposit is paid and the mortgage is approved and signed. Once all of this is in place as security the property seller can then draw down the funds and pays .75% per week until the title has been transferred( 6 weeks) . 0.75% x 6 = great return ( min 4 week) . The big risk is naturally the currency, however, this is very weak at present therefore an improvement seems inevitable.
By the way, the money can be used in a similiar fashion by lending it out to estate agents awaiting commission.
The question is, am I missing something or is it a no-brainer???
It works as follows:
Property owner sells their house. The time it takes for the transfer can be 6 - 8 weeks ( in this particular foreign country). In the meanwhile, the property owners needs financing for personal reasons, possibly in financial trouble or has to pay a deposit on a new house.
I as an investors ( me) "lends" this money to the property owner that needs the short term financing @ .75% per week. My money is secured against the mortgage of the seller including the deposit- this is managed by my lawyer and the bank ,which is subject to contract. So, property sales contract is signed, 10% deposit is paid and the mortgage is approved and signed. Once all of this is in place as security the property seller can then draw down the funds and pays .75% per week until the title has been transferred( 6 weeks) . 0.75% x 6 = great return ( min 4 week) . The big risk is naturally the currency, however, this is very weak at present therefore an improvement seems inevitable.
By the way, the money can be used in a similiar fashion by lending it out to estate agents awaiting commission.
The question is, am I missing something or is it a no-brainer???