OPERATIVE PROCESS

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1. Source for potential operations


JJC Capital Partners has direct access to opportunities in the bare property sector. Our professional local network in the barter property sector enables us to detect, select and access the best opportunities in this niche. Furthermore, one group company dedicated to brokerage of bare properties redirects the most attractive potential investments that comply with our investment criteria for further due diligence.

We thoroughly evaluate each case

2. Operations analysis


Potential investments are carefully studied and due diligence is performed on the property and ususfructuary. Properties are evaluating through on-site visits and review of any potential issues. Once the opportunity is identified, we contrast our internal assessment with independent appraisal done by an official entity licensed by the Bank of Spain and the National Exchange Commission (CNMV). In addition to that, we consult regularly actuarial tables from institutions such as the general direction of insurers (Dirección General de Seguros) and the National Statistics Institute (Instituto Nacional de Estadística).

Projects carried out with experience and efficiency

3. Operations management


Once operations are approved and checked internally, our team carries all the steps necessary to formalize the investment including notary acts, compliance documentation and other legal and regulatory matters such as tax payments or official. After operation formalization, JJC Capital Partner manages all the tasks for the success of our investments such as attend to neighbor committees, pay regular duties and taxes, and contract adequate insurance among others.

We seek out the best deals

4. Investment criteria


In Spain, bare property operations are carried out with usufructuaries over 65 years of age. Our selection of investments will focus on age ranges with lower actuarial risk.

Bare property through a single payment

Property owners from 76 up to 85 years old

JJC Capital Partners maximum investment will not exceed 50% of independent appraisal value at initiation.

Bare property through a single payment

Property owners equal or over 85 years old

JJC Capital Partners maximum aggregate monthly payments until the usufructuary’s life expectancy will not exceed 65% of independent appraisal value at initiation.

Full ownership investment and long-life rent

Long-life rent received from elderly people over 80 years old

JJC Capital Partners for full ownership will not exceed 80% of independent appraisal value at initiation and the minimum net rent yield will be 4%.

Minimum entry and allocation of funds

5. Investment


The minimum investment in JJC Capital Partners is €100,000 and is based on loans. Our management model for subscriptions, outflows and reinvestments is based on accounts managed for each client.

Each investor invests through its one account and operations are assigned according to time criteria and proportional to the capital subscribed.

We show you our operations

6. Expected returns based on scenario analysis


Expected return is the key estimation of operation profitability. It is mainly influenced by 2 factors operation maturity and final property value. Each operation is analyzed based on different scenarios. Expected return depends on assumptions on expected maturity and final property value Each operations analysis comprise 3 scenarios: Favorable, Base y Bear.

 

SCENARIO DEFINITIONS

EXPECTED MATURITY

FINAL VALUE

Favorable Scenario 70% of Life Expectancy Property annualized growth +3%
Base Scenario Life Expectancy(*) No growth on property value
Bear Scenario 1.3x Life Expectancy -20% writedown over initial value

 

* Life Expectancy taken from INE mortality tables

Transaction costs


Transaction costs (brokerage fees, taxes, notary, register fees and so forth) will be satisfied by the buyer (investors), except for the municipal tax (Plusvalía Municipal), which will be satisfied by the seller. Once the transaction is formalized, some operating expenses will be take out by seller (usufructuary): annual property taxes, ordinary community fees, extraordinary community expenditures, real estate insurance, specific individualized supplies and so forth. Valuations include the following transaction costs derived from acquisition and sale of properties:

  • Initial transaction costs comprise variable costs (one-off property taxes and brokerage fees) and fixed costs (property legal register, initial independent appraisal and notary).
  • Final transaction costs (final sale) mainly comprise by local municipal taxes on gains (Plusvalía municipal).

 

OPERATIONS ANALYSIS

 

Operation analysis examples for 2019

Full ownership and rent Life-long monthly payments Single payment
Location Coslada (Madrid) Marbella (Málaga) Cádiz
Usufructuary Woman, age 91 Woman, age 81 Woman, age 93

 

Annualized expected returns

Favorable Scenario 12,4% 28,9% 15,1%
Base Scenario 7,9% 10,7% 8,1%
Bear Scenario 3,8% 1,9% 1,5%

 

CONTACT US

We will help you as soon as possible

 

Madrid Offices

Príncipe de Vergara 132, Floor 9

+34 606 900 730
+34 619 937 014

info@jjccapitalpartners.com