REAL ESTATE INVESTMENTS: BUY PROPERTIES WITH UNHEALED SECURITIES

In a market such as Peru, where the levels of informality are very high, the possibility of finding real estate that does not have the necessary documentation to carry out some acts such as construction, expansion, demolition, titling, buying and selling, increases, etc. In order to put all the documentation in order and ensure that the property appears in Public Registries, the reorganization process is carried out.

Since a large investment of time and money, as well as legal and technical knowledge, is required to carry out the physical-legal reorganization, the owners prefer immediate profits and sell at low cost. This situation, in turn, is presented to the real estate investor as a great opportunity to achieve a good deal that will mean an attractive capital gain. real estate agent in edmondson park

THE INVESTMENT MODEL

What this investment model proposes is to acquire real estate at low cost given the lack of sanitation, carry out the process, and finally benefit from the property with all the documentation in order. It is true that, at first glance, it seems like a simple procedure, but this type of investment is one of great complexity (although it comes to report large returns), due to the variant and complex nature of the reorganization process. In this article, we will deal with this form of investment referring to sanitation in general and within a larger investment scheme.

In legal terms, the concept of reorganization refers to the procedure aimed at the regularization and formalization (improvement) of the property right or other real rights, and its final objective is the registration of the rights that exist on the property.

FEATURES

Determining the necessary acts for the sanitation of the property requires an evaluation of the legal and physical state of the property. Note that the greater the informality of the same, the greater the complexity and the number of acts to be carried out. Based on these considerations, it is important to know the following:

The time that will elapse before receiving the projected financial return will vary depending on the complexity of the reorganization process . This is an investment with results in the medium or long term for the final buyer.

It is necessary to have sufficient capital to carry out the physical-legal reorganization process .

It is necessary to have an interdisciplinary team (lawyers, engineers, architects, etc.) that, in addition to evaluating the viability and profitability of the business, will be in charge of executing the necessary measures to achieve sanitation. You can negotiate this service with part of the property in payment, which is an option to evaluate.

The sanitation process can take place on:

Possessions

Building departments that are not independent

Land without registration in public registers

Aires

Sub divisions of houses

Intestate successions, among others.

LEGAL FRAMEWORK

The most important norms that regulate sanitation in Peru are:

27157 : Law of Regularization of Buildings, of the Procedure for the Declaration of Factory and of the Regime of Real Estate Units of Exclusive Property and Common Property.

Law 27333 : Complementary Law to Law No. 26662, the Law of non-contentious matters of notarial competence for the regulation of buildings

Law 29090 : Law for the regulation of urban authorizations and buildings (and complementary regulations).

COSTS AND OPPORTUNITIES

Finding opportunities for this type of investment will depend on the ability to project the cost / benefit of carrying out all the physical-legal reorganization. Given the highly informal scenario in Peru, we can find various cases that generate a wide negotiation margin for the benefit of the real estate investor, for example:

Informal possessions

Departments without independence

House with Public Deed, but without registration

Property without factory declaration, among others.

This way of investing implies that the reduction in the purchase cost of the property is a function of the cost of formalization, the risk of the operation and the natural laws of the market (supply and demand). The profitability real estate that the final buyer expects by following this type of investment will be obtained in the medium or long term, depending on the complexity of the reorganization process that must be carried out.

By way of conclusion, it is important to emphasize that the physical and legal sanitation of properties is one of the most complicated processes. You must have detailed knowledge of the technical-legal requirements and procedures that must be used, so it is advisable to evaluate the investment together with a multidisciplinary team before proceeding. It is advisable to take into account how long the cleanup process will take, in addition to the expenses for possible delays, fines or even demolition of what was built against municipal regulations. That is why this type of investment is more useful for real estate investors who have enough support to carry out the process and wait the time necessary to obtain the highest possible return.