IL Postcard

Your Chance to Buy the Last Condos on Fortaleza’s Boardwalk

Date: 11/08/2008

Saturday, Nov. 8, 2008

Read more about investing in overseas real estate in International Living Postcards—Saturday Edition

Dear International Living Reader,

As you know, my current investment strategy is to buy property in Fortaleza, on Brazil’s northeast coast. The market is hot, and the right type of project can sell out to locals within 24 hours. This is the right type of project. To get access to deals like this before they are released to the general public is key. Members of my Real Estate Trend Alert service have that access, and I have been able to use the leverage of our group’s buying power to negotiate special pricing and payment terms on members’ behalf.

One of the biggest construction companies in Brazil will release its first project in Fortaleza on Nov. 20. This project will be located on the best site in Fortaleza, right in the heart of the boardwalk. The site is cleared, and the company is building the show apartments for the launch party.

Here’s the kicker: There are no other developable sites on the boardwalk. After this project, that’s it...unless developers start knocking down existing high-rise buildings.
This construction company paid 56 million reais ($26 million) earlier this year to acquire this site. This site is so good and this market is moving so fast that the company was offered 100 million reais—almost double what it paid—for the site less than a month after it bought it.

This development company is from southern Brazil and is publically traded on the Brazilian stock exchange, the BOVESPA.

The building will be high-spec. Amenities include everything you would expect from a five-star hotel. Sizes and views will vary depending on the condo. The smallest unit is 40 square meters and the largest is 250 square meters. Direct ocean-view units will be released to the local market at launch for 7,500 reais ($3,444) per square meter.
The Real Estate Trend Alert members-only pre-release launch price for the 67-square-meter to 250-sqaure-meter units is 6,500 reais ($2,985) per square meter.

But as an investor, I prefer the smaller units. These 40-square-meter units have city views and are perfect for renting. Buyers of these units will have the option to include them in a condo-hotel-type operation. The RETA discount for these units puts them in the $1,800 to $2,100 per-square-meter price range.

As with another project that I bought and recommended to Real Estate Trend Alert members, I like the smaller units because they offer both the prospect for capital appreciation and for strong rental yields. I expect these units will net a rental yield of 15% on completion. They will have broad short-term and long-term rental appeal. Yields will be far lower on the larger, more expensive units to the front.

I reserved two of these smaller units for myself and will sign contracts once my lawyer has reviewed the sales contract and permits for the project.

I have also secured special payment terms on behalf of Real Estate Trend Alert members. We’ll pay a 1% down payment and monthly payments of 1%. On completion (in approximately 36 months), you can pay the balance or continue to make monthly payments of 1% of the purchase price until you have paid for your unit in full. Should you opt to take the finance offered by the developer, you will pay a monthly interest charge of 1% of the outstanding balance. Given the price point, this means that you can lock down a unit here with as little as 1,600 reais ($735) down.

I’ve seen the plans and architect’s renderings for this project—seriously high-spec. In fact, I was just in Fortaleza for our latest Real Estate Trend Alert scouting trip, and the plans were delivered directly from the printers to our hotel. We were the first people in Fortaleza to see the plans. We also visited the site, and everyone agreed: This is the best site in Fortaleza.

Ronan McMahon

P.S. Units are selling fast, but some of the 40-square-meter units are still available. Sign up for my Real Estate Trend Alert service today and you, too, can get in on this deal of a lifetime.

Read related IL Postcards:

- Brazil Beachfront: A Beach House For $30,000

- My Lucrative Long-term Investment Plan

- Putting the “Live” in “Live and Invest in Fortaleza”

- How to Lock Down a $100,000 Brazilian Condo for $750