Hey all!
I work on the private equity/private debt side of real estate here in the States and figured I'd see if anyone has had any exposure to that in their real estate-related activities in Portugal. The U.S. real estate market is certainly different from almost any other across the world, though I feel like, barring any regulation that would hamper it, there would still be a need for these financing layers for investors looking to add value via renovation or create value via new construction.
I know I'll probably be able to answer a lot of these better once I'm immersed in things in Portugal, but if anyone has some insight into the below, I'd super appreciate having a chat.
- Does "hard money" exist in Portugal? Hard money loans are essentially very high-interest, short term loans with very low qualification barriers leveraged frequently by flippers.
- Does "private money" exist. in Portugal? Private money was essentially created when institutions realized that they could do what hard money was doing at less interest, but still more interest than typical banks and without the mortgage qualification barriers.
Essentially, are there any institutions and/or lenders in Portugal who lend at higher interest rates than the banks, who base their lending decisions primarily on the opportunity (ie. resale potential) of a property rather than the borrower?
- Is joint-venture common in Portugal? In real estate here in the states, "syndication" is fairly common. You'll have a "sponsor" of the project who is the main person responsible for executing the project, and several "passive" participants who contributed toward equity and cost. They'll split proceeds at the end.
I've found that banks do offer rehab 'mortgages' - you can typically do 90% rehab financing if you already own the property outright, or 70% of prop + rehab combined, with principal payments being deferred for two years. So there's that. But for reference, private lenders here are lending sometimes up to 90% LTC @ 8% interest.
I know these are niche, but perhaps someone has some insight as to how things work over there.
I'd also be happy to talk to anyone interested in learning more about this side of real estate investing, if you have such a curiosity. 😀
