Youngfield’s OCP are a small team of highly specialized and experienced operators in the greatly undervalued German Real Estate market. Headed up by Finbarr Flahive, Youngfield’s German partner company has very strong contacts in the banking and finance sectors there which allows opportunities to be identified and closed off before they ever come to market. However, it’s the business model in its entirety which delivers the big money. Finbarr’s team of accountants, tax experts, lawyers, investment managers, bankers and property managers combine to make big money from commercial investment property. Here are the four principles which Youngfield’s use to ensure big money returns.
This is where several investors pool their money together to buy a much more expensive property than any one of them could afford individually. A German limited company is formed with a shareholders agreement. Foreign investors have equal property rights before the law in Germany. The company wholly owns the property and there is only one property per company. Typical loan to value ratios are 65%.
2. Purchase Strategy
Substantial value is built in to the deal at purchase because of buying off market. Through Youngfield’s German partner’s extensive network of contacts in the banking and finance sector suitable opportunities can be acted upon quickly when they present themselves. Thorough legal and structural due diligence is carried out on the property and this allows the management team to identify and quantify opportunities to increase the yield during ownership and/or add value through repairs and improvements.
3. Property Management
The typical investment will have been neglected to some extent and the management team will have to play catch up to bring it up to its potential. The Chemnitz medical center is a classic example of this where there was considerable vacant space when the property was taken over. In the months leading up to completion, deals were done with new tenants to fill most of the vacant space at current market rents, upon completion. Although structurally perfect, the building was a bit dowdy and was freshened up as part of the strategy to seek modest rent improvements from existing tenants. The ongoing schedule of improvements is monitored every month.
4. Sales Strategy
The typical Youngfield’s deal is five to seven years in length and this is specified in the share holder’s agreement. Coming up to this time the market will be praised for an exit which will complete in that time period. Unlike paper securities, property doesn’t sell in a day and the property managers along with the rest of the team will decide when is the best time to sell.