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Thread: Financing Question: DR Real Estate

  1. #1
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    Post Financing Question: DR Real Estate

    Thinking of buying property for future rental in Las Terrenas, Samana.

    Investment looks good enough, but my question to DR1ers is the following: From your vast experience what are the most efficient ways to finance a RE acquisition in DR.

    Are local banks competitive in USD? All in rates are in the 7% to 9% range, which is a bit on the high end.

    On the other hand, have DR1ers financed RE in DR with US banks? Can you share tidbits from that process?

    Looks like foreign banks are the way to go here, but just looking for general input.

    25% to 30% down payment isn't an issue, the point here is maximization of capital!

  2. #2
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    If your legal resident in DR maybe with bank making you jump through hoops and proof of title 30-40% down ,non resident forget about it. Vendor take back from seller some will risk with 40-50% down not all... only way to finance from back home is if you have line of credit... 10 yrs ago interest rate was 12% in DR

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    Quote Originally Posted by principe View Post
    Thinking of buying property for future rental in Las Terrenas, Samana.

    Investment looks good enough, but my question to DR1ers is the following: From your vast experience what are the most efficient ways to finance a RE acquisition in DR.

    Are local banks competitive in USD? All in rates are in the 7% to 9% range, which is a bit on the high end.

    On the other hand, have DR1ers financed RE in DR with US banks? Can you share tidbits from that process?

    Looks like foreign banks are the way to go here, but just looking for general input.

    25% to 30% down payment isn't an issue, the point here is maximization of capital!
    Not 100% positive but I think you will hit a dead end trying to finance Dominican property with a US bank loan. The property has to be located stateside. Most likely you will have to finance through a Dominican Bank and pay the high interest, and jump through all their documentation hoops. DR is not such a good place to borrow money. The savings rates are higher though

  4. #4
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    Do you intend to be an absentee landlord?
    Cabin Attendant,
    Augusto Pinochet Helicopter Tours

  5. #5
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    Thanks guys for your input. To address some of the points above,

    1/yes i intend on being an absentee lanlord as the property is professionally managed. If i spend 4 weeks in DR it will be a lot! I can only wish...
    2/I've heard of rates for 5.5% in USD (which aint that bad) given the difficulty in arranging the financing in the first place
    3/i'm double citizen DR / US Of A!!! so i'm hoping my DR cedula and passport will finally be put to good use!

    Any other input i can get from people who managed to convince an american bank to lend them USD for DR RE is welcome..

  6. #6
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    You may want to consider a home equity line of credit from your USA bank. When we wanted to buy a commercial property to warehouse our inventory, commercial loan rates were over double residential rates. With a line of credit you can buy anything anywhere.




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  8. #7
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    AE i like the way you think man! i like it...

    Thanks for the quick brainstorming session..

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  10. #8
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    Quote Originally Posted by principe View Post
    Any other input i can get from people who managed to convince an american bank to lend them USD for DR RE is welcome..
    It is highly unlikely that a US financial institution will take a mortgage on a residence outside its service area, let alone one on an investment property outside its service area. If you default, the financial institution risks a loss or significant legal expenses trying to take the property. Financial institutions do not enjoy owning property. However, if you own real estate within the US, nothing prohibits you from pulling equity from the property and using it to purchase another property anywhere in the world. Some US financial institutions will not ask the purpose for pulling the equity; however, you can simply state that you are purchasing real estate.

  11. #9
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    Closed with Scotiabank at decent rate 5.95% fixed for 5 years/ 20 yrs mortgage in USD!

    Very good rate, super bureaucratic tho.

  12. #10
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    Quote Originally Posted by principe View Post
    Closed with Scotiabank at decent rate 5.95% fixed for 5 years/ 20 yrs mortgage in USD!

    Very good rate, super bureaucratic tho.
    You did well. And yes, DR banks could teach a master's class in bureaucracy. I have a story or two.

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