Success Stories
Success stories in real estate investments in Spain showcase the remarkable potential of the property market in this vibrant country. Investors have capitalized on various opportunities, from purchasing historic properties in culturally rich cities to developing modern residential complexes in emerging areas. These ventures not only yield impressive financial returns but also contribute to the revitalization of neighborhoods, enhancing the overall appeal of the locations. The combination of a favorable climate, a growing tourism sector, and a diverse economy has made Spain an attractive destination for both domestic and international investors. As a result, many have experienced significant appreciation in property values, making real estate a lucrative avenue for wealth creation in this dynamic market.
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Valencian Community
​A private investor had an investment capital of €1,250,000 and chose to invest it in residential real estate on the coast in order to obtain a monthly rent to cover the mortgage and to sell it after 5 years, when it has increased in value.
The real estate investor had set an investment target of 60% net profit on the capital invested in 5 years.
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After searching a few locations along the coast of Alicante, Valencia and Malaga, we found the opportunity to buy 4 finished villas at a price 25% below market near the town of La Oliva in Valencia.
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Villa nº.1 = 780,000 €.
Villa nº.2 = 380,000 €.
Villa nº.3 = 480,000 €.
Villa nº.4 = 560,000 €.
Total cost of the 4 villas = 2.200.000 €.
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We arranged for our client a loan of 70% of the value of the villas at 3.6% interest for 20 years. In other words, our client got from the bank a mortgage loan of 1.540.000 €.
Our client has now to invest = 2.790.000 €.
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And the purchase costs of the villas are:
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Price of the 5 villas .............................. 2.200.000 €.
Purchase costs approx. ........................ 220.000 €.
Furnishing and fitting out the 4 villas ... 110.000 €.
Advertisement of rental offer .................... 2.000 €
Other miscellaneous ................................................... 9.000 €
Total expenses = 2.541.000 €.
The client had a reserve fund of 249.000 €. which he decided to invest by buying an office for 182.000 € without mortgage credit and renting it for 960 € per month. The client maintained a reserve fund of €67,000.
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The client has invested €9,000 in promoting his villas and office for rent in different media and has managed in a period of 2 months to rent all the villas with 2 year renewable contracts.
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Rental of the villas:
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Villa nº.1 = 1.500 € per month.
Villa nº.2 = 1.200 € per month
Villa nº.3 = 1.800 € per month
Villa nº.4 = 1.100 € per month
Office = 960 € per month
Total income per month = 6.560 €.
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The real estate investor earns a monthly rental income of €6,560; a capital that allows him to pay the monthly mortgage payment of the 4 villas, the maintenance costs of the villas, administrative expenses and taxes.
In addition, there is the increase in value of the 4 villas and offices that during the 5-year maturity period will have exceeded 60% of the target.
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Andalucia​
​​​​We received the news that a 6-storey building well located in the center of Cordoba had been put up for sale. After checking the possibilities offered by the building through the urban planning office of the City Council, we contact a group of 3 investors and present them with the idea of investing in the purchase of the building, renovating it and converting it into offices and commercial premises.
A preliminary valuation of the building is carried out and with the results obtained we calculate the total capital needed to buy the building, the cost of the renovation, the management cost and the return on investment in 4 years.
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After the analysis, it was decided to include 3 other partners in the business and a partnership was created to purchase and manage the building.
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Using the credit capacity of the 6 partners, the company obtains a mortgage loan of 4.48 million euros at 3.5% for 20 years for the purchase of the building and to carry out the renovation that will last 5 months. Price of the building: €5.6 million. Purchase costs: €560,000. Cost of renovation 1,240,000 euros.
23,800 is expected to be obtained in monthly rent from the 12 offices (2 per floor) and the 2 commercial premises. This capital will cover the monthly mortgage payment, maintenance, insurance and administration costs.
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It is estimated that the property will increase in value by 12% each year based on the new valuation of the building once it is completely renovated. The rent will increase by 5% each year.
The investment objective is to obtain a net return of 60% of the invested capital in 4 years, which can be achieved very well with the above figures.
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In April 2028 the building is expected to be sold for a minimum price of 12,820,000 €. After the payment of taxes and the dissolution of the company, it is expected to be distributed among the partners for approximately 5.080.000 €.
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Price of the building = 5.60 m €.
Purchase cost = 0.56 m €.
Renovation cost = 1.24 m €.
Total = € 7.40 m
Mortgage loan = €4.48 m
Personal contributions = €2.92 m
Total = 7.40 m €
Sale price = 12,820,000 €.
Net profit to be distributed = 5,080,000 €.