Frequently asked questions
Why Invest with Riereta?
Riereta’s management boasts more than 80 years combined experience in real estate and has completed over €800 million worth of transactions.
Our team specialises in purchasing undervalued or distressed property, for example, buildings with squatters, then adding value before selling it for a profit. We see problems as an opportunity to purchase a property at a discount.
We pride ourselves on our professionalism, reliability and integrity.
We offer investors peace of mind:
- We co- invest a minimum of 10% in each project
- The investors become co-owners of the property
- The developer co-invests 10% in each project
- We pay our investors before anyone else- they receive the first 8% of profit
- All funds are managed within the SPV’s bank account, not Riereta’s.
- We typically buy properties at a 40%- 50% discount, so the market would have to crash by at least 40% for our investors to lose money (the biggest drop in real estate in the last 100 years was 36.8%)
Safety, Trust and Security
How does Riereta make sure my money is safe?
Your money is held in the SPV’s bank account, not by Riereta. Investors co-own the property through the SPV. This means you must complete paperwork when we buy and sell a property. Investors are welcome to appoint a trustee to oversee the SPV.
How do I know I can trust the other investors?
We ask investors to sign three contracts when we acquire a property:
- The incorporation document stating the exact business of the SPV (what business the SPV is in and how it operates).
- The management agreement clarifying the roles in the SPV and allowing Riereta to bring each project to a satisfactory end
- The investment contract assigning Riereta as a director of the SPV. The director is authorised to do whatever is required to achieve a good return on investment (ROI). The investors must agree to abide by the director’s decisions until the ROI is achieved. If the ROI isn’t achieved, the investors can delay completing the necessary paperwork.
What happens in case of a conflict of interest?
We have very strong corporate governance procedures. Riereta can’t invest in a project in a private capacity if it doesn’t stick to these rules.
How can I trust the lawyer and the notary recommended by Riereta?
We send all documents to our investors, so you can run them by your own advisors first.
How does Riereta source the properties?
In the Spanish real estate market, an extensive network is crucial. In the past, our network has grown as a result of working with many different partners, and these relationships bring undervalued properties to our attention. We also buy distressed property from bankruptcies and companies which have been acquired or transferred away from Barcelona. Most investors avoid these types of buildings due to the complexity of the legal system and the changes in regulation, but we have the experience and expertise to achieve a good ROI.
Who is in charge of making decisions?
Riereta makes all the decisions as long as the investors receive a minimum ROI of 8%. If we don’t achieve this ROI, investors get greater control over the decision- making process.
Investing With Us
What is Riereta?
Riereta is a private equity firm offering exclusive property investment opportunities in Barcelona.
What is your business model?
Investors provide 80% of the equity, Riereta invests 10% and the contractor funds the remaining 10%.
What kind of returns can I expect?
We aim to deliver a 9% return for our investors, although this figure may be higher or lower depending on the outcome of each project.
Do you pay returns after each project?
We pay returns on the completion of each project. You’re welcome to reinvest in any future projects.
How do I receive updates about the project I invest in?
We send a monthly newsletter with an update on how the project is progressing.
What is the minimum and maximum investment?
The minimum investment is €250,000. There’s no maximum investment, other than 80% of the equity (as Riereta and the developer invest 10% each).
How long does each project take?
The duration is different for each project and outlined in the business plan. A typical project lasts between three and 18 months, with an average of six months.
How many projects do you work on simultaneously?
We usually work on more than one project at a time.
Do these investments generate income?
No, the aim is capital growth.
Who decides on the sale price?
We set a sale price based on market conditions. We don’t hold out for the highest price if the property takes too long to sell.
Are you structured as a fund?
No- each investor decides whether to invest in an individual project or not.
Can I visit the property?
You can usually visit a property before and after the renovations, although sometimes access is restricted. Please speak to our Investor Relations Manager for more information.
What is a Special Purpose Vehicle (SPV)?
An SPV is a limited company set up to hold the property. As an investor, you’re a co-owner of the property, so you need to complete paperwork when we buy and sell it. The SPV is liquidated when the project is completed.
How much tax do I have to pay?
Your liability depends on the tax rules in your country of residence. We can’t provide tax advice but we recommend these international tax lawyers:
Phone: +31 61 089 57 04
Email: [email protected]
Company: Atlas Lawyers
Phone: + 34 93 503 48 68
Email: [email protected]
Company: Rousaud Costas Duran
What are the next steps?
1) Send us:
- The signed investment contract
- The signed shareholder agreement
- The signed KYC (Know Your Customer) document
- A letter with your bank details (bank reference document) or proof of your latest tax declaration (from the tax office) without any financial numbers
- Proof of address (copy of utility bill or state/government correspondence dated within the last three months)
- Proof of identification (copy of passport or driving licence)
2) Transfer funds
Transfer funds to the SPV’s bank account.
Ask the Spanish authorities for a NIE number. If you don’t have a NIE number, we can apply for one (and a Spanish bank account) on your behalf for a charge of €500 + VAT.
Buying a Property
Who makes the decision about which property to buy?
Riereta decides which property to acquire. Our commercial team closely monitors Barcelona’s real estate market to uncover potential opportunities. Management then assesses each opportunity and decides whether or not to buy a property. The decision- making process can take as little as a day thanks to our expertise and experience, and we like to move fast when we identify a promising opportunity.
Is there a danger of the project costs spiralling if the property is in severe disrepair?
We always purchase a property at a significant discount to market value and to be safe, we overestimate the cost of renovation. For example, we may base our estimation on the cost per square meter for a new build.
How does Riereta choose builders?
We always invite request for proposals (RFPs) from three different builders for a project.
How does Riereta decide about the amount of renovation a building needs?
We base our decision on how quickly we can sell the property and make a profit.
How long do renovations take?
Renovations typically take between two weeks and one month for an apartment. So a building with 10 apartments may take up to 10 months. Renovations rarely take longer than a year, including the time required to secure a construction permit.
What happens if the project goes over budget?
This is very unlikely as we overestimate the cost of renovations based on previous experience.
How does Riereta sell the property?
We find a willing buyer through our network of 152 agencies.
Can the buyer make any claims after the transaction is complete?
Not in Spain. The contract sets out strict terms for the buyer.
Does Riereta ever keep a building and rent it?
Sometimes. We have a SPV for rental properties. If you’re interested in an income generating investment, please contact your Investment Relations Manager.
Does the money from the sale of a property go straight into the SPV’s bank account?
Yes- the initial investment and profit all go straight into the SPV’s account.
What happens if the property doesn’t sell?
This is rarely the case as we prioritise a quick sale over a high price, but if we struggle to sell a property we can rent it out until the market recovers. That’s why we indicate a yield for each project.
Why do investors receive the first 4% of profit?
If investors trust us with their money, we believe they deserve to receive part of their profit first. So we commit to paying the first 4% to investors.
Why does Riereta receive a 2,5% fee?
Riereta charges a fee of 2,5% + VAT to cover the costs of running the company. Most other funds charge between 3%- 7%.
Is there a chance a project could lose money, leaving the contractor out of pocket?
This has never happened, partly because we always overestimate the costs for each project.
How does Riereta decide whether to sell the property through a real estate agent or Idealista?
Sometimes we sell a building ourselves and other times through an agent, depending on the market. If we sell through an agent, we usually expect the agent to help us source another property.
Can investors join the SPV at a later date?
Does Riereta’s strategy rely on buying properties from banks?
We buy undervalued property from all sellers.
Is this investment opportunity only available to investors in the EU?
No, everyone can invest with us.