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9 Ways to Buy Property in the Dominican Republic:

It is always advised to secure the assistance of a knowledgeable, reputable and local real estate agency in order to secure a fully executed contract and title.

OPTION 1) Use your own money… Using your own cash or liquidating assets in your own country is of course the best and easiest way to not only secure property here quickly, but also buyers have the best chance to negotiate a better price and terms & conditions.  An offer could be structured as such… (Example only) 40-50% down upon acceptance of the offer, and the balance due approximately 30-45 days after the contracts have been legally signed and are in motion for expediting the transfer of title in the buyers name. It is always advised to secure the assistance of a knowledgeable, reputable and local real estate agency in order to secure a fully executed contract and title.

Please CONTACT US for more information.

OPTION 2) For a resale property (property originally purchased by another and sold by the individual seller).  Depending on the motivation of the seller, the same principals as outlined in option 1 could be applied.  The seller may even take less for the initial deposit and stretch the payment terms out for 6 mos. to up to 2 years – Once the final payment is made, the title transfer can be applied for.  The seller may or may not grant keys prior to the final payment.

OPTION 3) DIRECT OWNER FINANCING:  Similar to option 2, where a buyer, through the creative assistance and representation of a reputable agency, can formulate a lease purchase agreement with the seller, similar to a mortgage with a bank, but instead the terms of the lease purchase are made directly between the buyer and the seller. The terms of a lease purchase agreement changes on a case by case basis. An ideal lease purchase agreement would outline that with a small initial deposit (usually 5% – 10% of the agreed selling price, plus a % of the agency commissions and legal costs); the remaining payments would be set up on a monthly or sometimes quarterly basis. At the end of the probationary period (the time where both the buyer and seller have the option to ( a) proceed with a lease purchase arrangement- (b) go into a standard rental agreement, or (c) go into a more formalized “purchase agreement. The probationary period is typically 1 year. Should the buyer default with the obligations set forth, the buyer moves on and the seller retains the deposit. Should the buyer decide not to purchase, the deposit is either retained by the seller, or divided between the buyer & the seller as agreed in the probationary contract. For more information, please refer to this page.

OPTION 4)  - Convert your traditional IRA into a Truly Self Directed IRA- LLC/ Roth with checkbook control; then use this money as you wish BEFORE YOU RETIRE. This option is perfect for those who are considering buying real estate to and leverage as a short term vacation rental income property NOW; and who do NOT plan on living in the purchased property until later (time depends on your situation) – please consult with a financial consultant versed in Truly Self Directed IRA- LLC.

For More information start with: IRA FINANCIAL GROUP

Or Contact:
Avi Kaufman
Sr. Self-Directed Specialist
Broad Financial, LLC
Phone: 800-395-5200 x327
Fax: 845-352-7575
akaufman@broadfinancial.com
www.broadfinancial.com

OPTION 5) For brand new completed or near completed properties. Some developers are in a strong financial positions to accept payment terms:  i.e. Palm Suites offers 7.5% financing with 25% down stretched out over 8 years.  Or Santa Maria del Mar I and II is offering 6.5% interest with as little as 25% down, stretched out over 20 years!  Of course both these communities are almost sold out… so if you are interested in financing with either of these communities, please contact me ASAP to verify the inventory.   If you are interested in a different community/ development, check with RELIABLE REALTY DR to see if the developer is willing to accept creative terms.

OPTION 6)  For Preconstruction properties. Many preconstruction developers offer the best pricing and payment terms; sometimes 50%  less than when the condo or  community is finished – which makes for an excellent turn-over resale investment (i.e. 2BR condo in a beachfront community preconstruction price $250,000 V.S. completed sale price of $375,000).  Many developers will agree to stretch the payment terms over a 1-2 year period of time until the condo is finished.  I.e. upon accepted offer, 30% down, then 20% six months later, another 20% after 1 year – 18 mos. and the final 30% upon completion and turnover of the keys.  There is always some inherent risk in pre-construction, however, RELIABLE REALTY DR is in constant correspondence with most developers here and in most cases, able to recommend which projects hold deposits in escrow (Stewart Title), which projects are on target for completion as scheduled, those developers who are financially strong, and those will not provide status reports (which is typically an indicator there may be financial concerns). 

OPTION 7)  Finance with a bank in the Dominican Republic - Although we know even U.S. banks can fail, overall banks in the DR have had excellent financial stability because they are affiliated with the world bank and not primarily dependent upon 1 or just a few countries.  Popular Bank is the largest branch in the DR.  Other strong banks are:  Scotia Bank (also in Canada), and BHD Bank.  As you know Mortgage bank rates are directly tied into the real estate market and since most properties in the DR are purchased with majority cash, there are not many short sales or foreclosures in the DR, thus the bank rates remain more consistent.  Real estate throughout the DR is still very affordable compared to most Caribbean destinations and values are holding steady. 2010 once again reflected appreciated values, with modest increases compared to 2009. Thus, bank interest rates are higher than in the U.S. or other countries that need low mortgage incentives to stimulate the market.

Since the banks mirror the U.S. qualification process, requirements will be much the same (credit score, two years income tax records, debt to income ratios, etc).  The banks in the DR also require proof of title – and typically between 30% – 40% down. Titles for new or pre-construction properties, may take up to 18 months to obtain due to the high volume of sales over the past 5 years.  Therefore, if you are planning to buy pre-construction, under-construction or brand new, properties, please check with Reliable Realty to see where the developer is in the title process, and if he is offering direct financing as an alternative option.

Bank rates in the DR have come down considerably over the past 2 years. For example, in 2007 bank rates in the DR were still around 12%.  An indicator the DR government is recognizing the need for financing incentives for foreign investors in order to continue stimulating the DR economy.  If you are interested in bank financing options, please click on the following attachment for more information and direct bank representative contact information. Even after applying for a loan, you will need a responsive and reliable real estate broker here to coordinate the many details of the sale directly with the bank representative and other professionals in order to keep the process moving within a reasonable time frame.

CLICK HERE FOR MORE INFORMATION AND SPECIFIC BANK REQUIREMENTS

OPTION 8)  Rent out your property to cover loan payments and other cost of ownership. An established and reputable real estate agency will also provide property management services so although you are living abroad, you can convert your property into a Vacation rental investment, or rent out on a mid to long term basis. Then use this money to pay your mortgage/ loan or other payment (as expressed above).  There are no guarantees the investment will totally cover your payment (ROI), but chances are it will cover a good portion of the payment, and or all your cost of ownership expenses (maintenance fees, electric, gas, cable TV, homeowners insurance, property management fees, general maint. / repair costs) and may even provide enough income for you and / or your friends to use it 2-3 times a year as your 2nd Caribbean home.  For example, you could purchase a 2BR/ 2BA condo within walking distance to the beach for around $150,000 (yes we have several of these in this price range).  Your expected rent for sleeping an average of 5 people would be around $600.00 a week/ or $1500 a month (more during high season – late Nov. – early Apr.).  Or a 2BR Beachfront community priced around $295,000 you can expect to nearly double the rate with increased occupancy rates.  Of course it won’t rent out every week… but so far occupancy rates for properties managed and maintained by RELIABLE PROPERTY MANAGEMENT SERVICES have averaged 38%. I know of “NO” success stories from people living abroad who try to rent and maintain their own properties from abroad. It is mandatory to seek local, trustworthy and reputable property managers to assure your property investment is well maintained and secured, and that your vacation guests or tenants are happy.

Option 9) – NEW OPTION COMING SOON .... can't wait? Please contact me.