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Special Situations Real Estate Investing
Today, we are joined by an international real estate investor and serial entrepreneur Noah Laith.
Noah is doing real estate deals in the Middle East, in South East Asia and in Europe with his favorite city Barcelona. In this episode, Noah’s story is quite impressive and he offers some incredible tips to entrepreneurs on how to invest in real estate. We will get into the mind of Noah and how he selects the best deals for his investors and his company.
He will take us through on some of the indicators he learned over the many years as an investor that helped him avoid the crash of 2008 and how he profited from the opportunities that followed.
Real Estate Case Study
This was a 2018 special situations real estate investment play. Riereta Asset Management S.L., managed by Noah Laith, suggested a very interesting investment opportunity in the Barcelona real estate market, that promised high returns, quick payouts and a risk profile that is uncorrelated to stock market risk. Here is the overview provided by Riereta:
Invest in a special purpose vehicle that invests in 10 properties carefully selected by Riereta’s management team. This investment opportunity is a portfolio of apartments in Barcelona, spread over the following areas: El Gòtic, L´ Hospitalet de Llobregat, El Raval and Nou Barris. These are all areas that are experiencing high levels of growth. Riereta’s goal is to buy, renovate and sell these 10 undervalued properties with 20% of its own capital, a diversified investor base and moderate outside finance from banks.
According to Riereta, the Barcelona property market grew significantly in 2016 and 2017. The city is considered one of the most strategic locations for real estate investments in Europe.
“Newly renovated small apartments and developments are in high demand, especially amongst local buyers and expats. Banks have resumed mortgage lending to local buyers, which has led to an expansion of the overall market.
A number of neighborhoods have seen a spike in rental and sales prices per sqm. In the center of Barcelona, real estate prices increased by about 22% per sqm between 2015 and 2017.
At present, the market rate (weighted average) for the areas in which these apartments are located is on average €3747 per sqm. Riereta expects a higher sales price and quick turnover of its ten properties due to the following:
- Buildings are newly renovated and furnished
- Apartments have luxury standards
Alternatively, Riereta has options for renting out the properties in this investment proposal, that should generate above market cap rates. Riereta plans to invest 20% of its own capital in this deal.”
Key Figures
* Estimates are only a guide and the duration may be longer. The 12 months duration commences on the purchase completion date, scheduled for February/March 2018.
** The net profit is shared as follows, the first 8% goes to the investor, the following 8% goes to
Riereta. All profit over 16% is split equally between the investor and Riereta.
Core Investment Risks
- Prolonged negotiations with current owners or renovation efforts due to specific property issues
- A sudden collapse of property prices in the region
Contact Riereta
To get more information and a personal consultation contact Riereta directly:
Riereta Asset Management S.L.
Carrer de Balmes 129 BIS, 3-1
08008 Barcelona
+34 935 130 120
Disclaimer: No financial compensation; no position.
About Noah Laith:
Noah was born in Iraq but grew up in Amsterdam and today he speaks multiple languages
