1. What is MESPIL Investment Club (MIC) and how does it work?back
MESPIL Investment Club is a boutique real estate investment club whereby we connect investors with an appetite for Portuguese property with off-market quality real estate investment opportunities primarily in Lisbon, and Algarve.
Through MESPIL Investment Club investors have the opportunity to learn and invest in real estate opportunities through a private consultation with our Director of Funding Thomas Kottmann, through our monthly investment offer e-shots and/or through a number of events we hold regularly on the Algarve. Investors are welcome to review investment documents, analyse due diligence material, meet our team and sign any legal documentation at that time. Once invested, investors will have access to an investor dashboard through our CRM proprietary tool giving 24/7 access to watch how your money is working for you. You will also be introduced to a dedicated Investor Relations Manager who will be at your disposal for any reporting or further details you require.
MESPIL are here to simplify real estate investing in Portugal through our full-service offering.
2. Will my investment details be secure online?back
MESPIL Investment Club (MIC) is committed to protecting the privacy and confidentiality of our investor information. This includes but is not limited to physical and electronic procedures that protect information from loss, misuse, damage or modification by unauthorised access. Some of the central features of our security processes are:
Use of specialist software that scans for viruses and malicious content
Software that protects from DDoS and Brute-force attacks
A Web Application Firewall
“M.I.C. is following EU Data Protection Directives in order to protect the data of its investors and members.”
3. How do I get started with MESPIL Investment Club (MIC)?back
Feel welcome to contact MESPIL Head of Funding Director Thomas Kottmann for an initial discussion on +351 289 246 711 or via email
MESPIL are bringing full service real estate investment to clients and investors alike. Currently creating investment opportunities and lifestyle destinations in Portugal for our end buyers, MESPIL investors focus on property in the Algarve and Lisbon areas. MESPIL Investment Club benefits from acquiring off market distressed property offering value and uplift, an operational team on the ground and fast selling through our client direct channels and an established global agency network.
MESPIL was founded by Tom O’Connor and Andrew McAdam in 2006 with MESPIL Investment Club formally launched in 2016. Tom O’Connor is MESPIL’s Managing Director responsible for the company’s strategic direction and operations whilst Andrew McAdam acts as Finance Director supporting strategy direction, funding mitigation and risk, company financials and statutory compliance. Today, MESPIL has evolved with the addition of a Chairperson, additional Board members and an Advisory Board plus an experienced leadership team.
MESPIL is a team of professionals with significant experience in real estate, infrastructure, tax and finance. You can learn more about our Board and Leadership team here.
We are headquartered in Dublin, Ireland with an office in Algarve, Portugal. You can find our contact details here.
7. How is MESPIL Investment Club (MIC) capitalised?back
MESPIL is funded by strategic investors on a project by project basis. In June 2017 we completed our first capital raise in Portugal purchasing Pine Hills, Vilamoura a 55-villa apartment development from Novo Banco with a combination of senior debt and equity from MESPIL’s Principals and an European private equity firm. Since then we have acquired a further 2 regeneration projects in Lisbon, Portugal using the same funding model.
8. How much money has been raised and invested through MESPIL?back
The principals of MESPIL have collectively raised over 500M Euro that has been invested in real estate projects across Europe to date. Most recently, MESPIL has over 40M Euro worth of assets under management in Portugal.
MESPIL investors to date include HNWI’s, private equity and private investors.
10. What are the benefits of using MESPIL to invest?back
MESPIL make it easy for investors with an appetite for Portuguese real estate by providing access to off-market distressed property transactions. Our team focus on sourcing and acquiring real estate investments in the Algarve, and Lisbon allowing our investors diversify their portfolios and getting access to a number of debt and equity investment options. MESPIL make the process frictionless allowing you to screen investment projects online and have access to your investment dashboard through our proprietary CRM system ensuring you have 24/7 visibility on your investment.
11. How is MESPIL’s approach different than its peers?back
MESPIL employs a different approach to investment – we acquire, develop and manage all of our real estate projects as co-investors and believe this longer-term view is critical to the cyclicality of markets. Your investment is our investment too. We focus on quality investments in the right location over quantity and evaluate on a long-term strategy basis in building a yielding asset portfolio. To date we have not invested in a ground up development and instead we de-risk our investments by focusing on distressed assets that offer solid cash flow. We use a rigorous Ideal Project Parameter weighting matrix to scrutinise all potential projects and believe limiting what we invest in has been a primary driver of our investment results to date.
12. How does MESPIL use technology to reduce expenses?back
We have built a proprietary CRM tool that in real time manages all of our real estate projects, financials, sales and marketing including individual investor dashboard access. We are a small team that relies on a number of different technologies to support our business.
13. When is an investment opportunity proposed to investors by MESPIL?back
MESPIL have built a dynamic database of potential real estate opportunities all of which go through an in-depth financial and due diligence process. Along with our legal team Global Lawyers, Lisbon a decision is made whether the project is a good fit to propose to the MESPIL Investor Club. We are good at scenario planning and understand the variables of each transaction including return structure, market statistics and demand, quality of the property and have a 3rd party independent valuation completed. At MESPIL, we typically fund residential buildings that provide cash flow to investors as quickly as possible through sales off-plan and that increase cash flow over the life of the investment as a yielding asset.
Although no investment is guaranteed, by investing in a MESPIL project you are investing in physical assets in Portugal and we usually structure investments that provide first charge security to our investor.
There is no guarantee when investing in real estate due to dynamic economic cycles however real estate provides a chance for better returns requiring investors to perform a cost-benefit analysis to determine where their money is best held.
16. Does MESPIL run background and/or credit checks when in discussions with new investors?back
Yes, MESPIL carry out a number of KYC (know your customer) and anti-money laundering checks with all potential investors as part of our investor onboarding process.
Yes, however it is different for each investment opportunity. The minimum to date invested in any one project has been EURO 1M. However, we are currently pursuing a number of Lisbon refurbishment opportunities which have smaller investment requirements.
When an investment has been transferred via bank, monies are held securely in our Portuguese client account. An investment is not final until all legal documents are signed, and funding has been cleared.
20. How will investors be updated about their investment status?back
MESPIL has a dedicated Investor Relations Manager who will manage the communication between our company and clients. Your IR Manager will provide timely updates at least quarterly via both email and the investor dashboard on our CRM tool. The dashboard will provide key metrics on project milestones, sales analysis, and financials.
Real estate by its nature is illiquid. However, liquidity is released as sales complete over the life cycle of the investment term and this provides liquidity for MESPIL clients.
Each MESPIL real estate project will have different hold periods for investment funds. The hold periods are the anticipated time investors will be involved with the specific investment until the underlying asset is sold or the loan on it is paid off. Each investment term is different however typical timeframes are between 12-24 months.
23. What would happen in the case of MESPIL financial difficulty?back
Investors who invest with MESPIL are either investing in a project that we manage, or that we co-invest in however these are standalone SPV’s which are not subsidiaries of MESPIL. Each SPV is a sole, separate and legal entity meaning if ever MESPIL was in financial difficulty these SPV’s would remain standalone. Also, in most cases, investors have a first lien pledge over the asset/building.
Our clients are looking at real estate in Portugal for investment, lifestyle, retirement and golden visa reasons. For the Golden Visa market, much interest comes from Asia, India and Brazil.
25. There will inevitably because of Covid-19 be a slowdown in travel through Europe and Portugal, what impact in sales for your projects do you foresee?back
Although Covid-19 impacted the market it also resulted in an uplift in demand from Asia & the Middle East. In addition, purchasers are now completing sales online which is speeding up the closing process. In general, MESPIL believe that the demand for real estate will remain robust since Portugal remains a highly attractive proposition globally due to its Golden Visa program, it’s safety and its very high quality of life stats. The Covid-19 outbreak has been well managed by its government and as a result its citizens have showed relatively low exposure.
26. What additional costs are expected for a delay in sales? After what timeframe will the profit be zero?back
MESPIL will work with our investors on scenario planning however worst-case situation will be renting some or all of the units. All projects acquired by MESPIL have high rental demand which mitigates investor risk. Lisbon followed by the Algarve have the highest demand for both short and long-term rentals.
27. What would be the worst-case outcome of an unsuccessful investment?back
Worse case is a collapse in the Lisbon/Algarve property market and MESPIL cannot sell any of the units. In this situation and as part of our scenario planning, we will provide estimates on minimum rental yields and would propose refinancing the deal and replacing a lender in the transaction.
28. Why doesn’t MESPIL typically get the capital as a loan from a bank and increase profit?back
Banks in Portugal are not an efficient and effective option for MESPIL, they are not very agile when it comes to doing short-term project financings for the size we are targeting. Our preference is to work with co-investors/private lenders so as to keep full control and flexibility and also to continue building our MESPIL Investment Club membership.
29. Is there insurance on the real estate assets?back
The day MESPIL take ownership of the asset a fully comprehensive insurance cover will be activated on the property.
30. What types of properties are available through MESPIL Investment Club (MIC)?back
MESPIL offers access to investment opportunities in residential, commercial and holiday letting real estate projects in the Lisbon, and Algarve areas of Portugal.
31. How are MESPIL investments typically structured?back
MESPIL structure investments on a case by case and we try to match the investors preference. We are flexible but typical structures are as follows:
An investor can be a lender to the SPV with a fixed coupon or
An option that works quite well in Portugal, an investor can lend to the SPV at an interest rate that tracks profits (i.e. the more profits, the higher the coupon) or
An investor can participate as an equity investor.
32. When I invest equity with MESPIL, what do I own?back
MESPIL Investors will acquire shares in the SPV that owns the building. If the SPV is funded entirely through equity, then there will be no charge on the building ranking ahead of the equity. If the SPV borrows money, then this lender will hold a first charge over the building / asset.
33. When I invest debt with MESPIL, what do I own?back
MESPIL Investors typically lend directly to the company that owns the real estate property. If there is no senior bank debt, MESPIL Investors are given a first lien pledge over the asset/building.
34. What if I invested equity and more money was needed for the real estate asset in the future? Am I obligated to invest more as an equity owner?back
MESPIL have not to date required a capital call from any of its investors. We do detailed scenario analysis along with alternative exit strategies, to ensure that this requirement does not arise.
35. What equity/debt does MESPIL contribute to each investment?back
MESPIL usually invests in the project by way of equity. MESPIL’s investment will be subordinate to investor debt and will rank pari passu with investor equity.
MESPIL usually charges a management fee for the operation of each project and this allows are investors to be truly passive. This typically includes a profit share dependent on results. This is negotiated project by project and details are included in the investment summary sheet provided.
37. Who makes decisions in MESPIL investor projects?back
For each of our investments in Portugal we structure an asset owning company and, if required, an operational company as part of the transaction. We believe in active asset management and this position allows MESPIL to add value and proactively do our best to protect investor capital. Decision-making authority differs investment to investment.
38. Have any of your previous project investors participated again in a transaction?back
Yes, we have had investors re-invest and each potential project is reviewed and proposed to different investor types depending on the size and type of opportunity presented.
39. What if you fail to collect enough capital for a certain project?back
As part of our project onboarding process, MESPIL line up sufficient commitments from investors before signing the purchase contract.
Interest payments differ investment to investment however MESPIL typically distributes interest payments on investments quarterly.
41. What taxes and fees will have to be paid for buying and selling real estate in Portugal within a 12-month period?back
Typically the real estate asset will be purchased through a tax-exempt vehicle to allow IMT / stamp duty to be deferred. We then have a three-year period to sell the property before IMT / stamp duty would become payable.
42. What are the tax implications of investing in real estate investments with MESPIL?back
By investing in an IMT / Stamp Duty exempt SPV we can avoid these significant transactional taxes. Each SPV is then formulated in a way to be as tax efficient as possible, whilst being cognisant of investors personal circumstances. We use one of the large accountancy firms in Portugal to guide our decision making here.
For debt investors, interest can typically be paid to investors without deduction of any withholding tax (once they aren’t located in a black listed offshore location).
For equity investors, profit share will be subject to Portuguese Corporation Tax. However, we can normally structure it so that your return is a combination of interest / profit share and this can make it more tax efficient.
MESPIL and its affiliated companies do not provide tax, legal or financial advice. This text is for informational purposes only, and all investors should consult with their own tax, legal and financial advisors before engaging in any transaction.
43. Will this be a bankable security e.g. visible in a bank depot in Switzerlandback