Originally I had intended to write about the auction day as an update to what I wrote in November. Today however, I have much to do in the next few weeks and need to use this time wisely. I have some announcements as well as news about our Italian investment property. Let’s start with the news….
Ospedaletto
As I mentioned, this is a property that we purchased back in June while my family was visiting. The process for completing documents has proven to be consistent with government labor stereotypes. Even augmenting the stereotype since we are working with Italian government entities. As of today, we don’t have the final documents nor the keys. Sounds like bad news all around. In reality, we are in a good place regarding this property. I couldn’t begin to explain why it is taking so long. I have some assumptions, but let me tell you why I am still happy about our decision.
Old Plan
Our intention in buying the property was to purchase and hold the property for a minimum of 5 years to avoid Italian capital gains and within the interim make some much needed repairs to entice a renter to generate some cash flow on our investment. As far as a timeline, we were looking at something like this.
Cash timeline
Expenses
June: Deposit for auction participation
October: Final property payment
November: Receive keys and begin remodel
December: Remodel
Income
January: Monthly Rent €300 List Rent Notice -Best Case Scenario to start earning revenue
It is a pretty basic explanation, but easy to see cash exiting and being recuperated in time. A 5 year rental at 100% capacity would bring in €18,000. Odds of that happening: Very low. Vacancy rates, taxes, and maintenance being the main culprits. In total, comparing a net income to price of purchase + remodel, Our rate of return would be nothing extraordinary. The sale of the property after 5 years however, would be the primary source of gain for two reasons: The price of purchase + no capital gains, is far greater than its intrinsic value.
New Plan
Not all plans go according to design, but that can also be a good thing! Since it has been taking some time to process the documents, we decided to attempt to contact the previous owner directly. The court had expressed having difficulties contacting them since they were constantly traveling to and from Morocco. We were fortunate to drop by at the right moment and through some discussion ascertained that they were interested in staying in their home and would pay rent. In addition, they would pay an entire year’s worth upfront since they had saved money during the auction period. I can’t say I expected it, but I was hopeful to find a way to help them transition during their times of difficulty.
Win, Win! Not only has it brought peace to the previous owners not having to worry about where they will go next. It has actually saved us an upfront remodel expense, not to mention the period of time the house could have remained empty while searching for a tenant. But the biggest plus is receiving an entire year’s payment as opposed to worrying about collecting rents every month. Here’s what the new timeline looks like:
Cash timeline
Expenses
June: Deposit
October Final payment
No Remodel
Income
January: Annual Rent Payment €5,000
Rent negotiations are still in process, so the the 5,000 euro is just an estimate, but I can tell you now, We already have a plan for what to do with it.
Big Events Ahead
Like I said this month is a busy time for us. We have a lot of things in the works and are excited for the future. Right now in Italy there are many investment opportunities for those that have some cash. Just look at the properties I’m tracking! (Click to expand photo)
The DauvO Investment Pipeline (Affiliate Link)
All the properties listed are on auction from today until January 26th, 2018. And these are just the ones that fit my criteria! Notice the base prices (In Euro) are all, save one outlier, less than €40,000! If you are reading this and are thinking… ‘Wow, I’ve got $10-$20k just sitting around!’ You’re in luck because I’m organizing partnerships!
Project: Lodi
Seriously! It’s what I do. I realize it sounds like a shameless plug for myself. And it is! But, these opportunities are ridiculous and are in reality, coming to an end. Some laws have changed within the last few years, which has made these low-priced investments a limited resource.
Why project Lodi?
Lodi is a province of Italy, located adjacent to the business hub of Northern Italy. Many people reside in Lodi and commute to Milan for work. Project Lodi is a multi-phase plan to make Lodi an extension of Milan by bringing jobs and innovation.
How can you Participate?
Phase One is already under way and the next 14 – 60 days are going to make or break the movement. If you have an interest in knowing more about Project: Lodi. Please click the ‘Tell me More!’ button or fill out the link form below, and you will receive more details, don’t forget to check your spam folder if it doesn’t appear within 24 hours.
Plans for December
It’s almost time to recap on our 2017 goals. Not sure how I’ve done since I’m slacked a little bit on keeping everything updated. A new development is that I’m determined to start using video more in the next few weeks, so feel free to follow us on youtube and facebook as well. We will also be holding a giveaway and unveiling a new site soon! It’s been really fun planning everything, and now it is time to take action! Enjoy your day!
