Being in the Right Place at the Right Time — Being in Paris

Saturday afternoon, I did what’s called a “Meet and Greet,” welcoming a renter to Le Provençal (my studio rental apartment — a Parler Paris reader and past attendee of a Living and Investing in France Conference, who is in the process of purchasing a pied-à-terre just a block away for rental investment purposes.

While we were having lunch together at the corner café, a call came in from another reader (and friend) who hadn’t been in Paris for well over a year. He and his girlfriend stopped by to join us for drink, only to discover that not only had he once lived in the same building in which she was buying, but on the same floor opposite each other!

The expression of Gustave Courbet’s face in his self-portrait that acts as the signature piece of his retrospective at the Grand Palais (on only until January 28th), illustrates the surprised looks on our own faces to learn this synchronistic news…telling us all that we must be in the right place at the right time, doing the right things.

If you haven’t yet visited the exhibition, the ‘hot spot’ is not only the room temperature-wise warmer than the rest, but is also the most crowded, thanks to his painting of a torso of a reclining female nude, with her legs parted, entitled “The Origin of the World” that gets most of the attention. (Learn more about the exhibition at http://www.paris-update.com/art/courbet.htm )

Then, last night, we took a look at the real cost of property in France through a clearer lens. Mary Fort, Director of the International Department at BPI (Banque Patrimoine et Immobilier) led a conference call free to subscribers of our sister publication, French Property Insider, to introduc

e a new loan product — one she called “embryonic” that is so new, it has yet to be named!

In fact, the new “scheme” started as just a glimmer of an idea and thanks to our own enthusiasm for it, we (our readers!) are largely responsible for its development and growth! None of the other banks are offering it…yet…so Mary is feverishly working to bring it to full maturity before the competitors copy the concept.

In my opinion, it’s a brilliant way of virtually eliminating the rate of exchange issue for Americans who are suffering from the weak dollar (or anyone wanting to make a smart financial investment), but want to diversify their assets by owning property in France (or who just yearn to be here like so many of us!).

The basis for it is that the down payment (20%) is held in an interest-bearing account, kept in U.S. dollars, while the loan is offered for 100% loan to value. The initial investment of 20% remains the borrower’s money and grows with the interest as well as the potential with an improving rate of exchange. The loan product was first introduced by Parler Paris in a past issue.

In last week’s issue French Property Insider, we went further to illustrate not only this particular loan offering, but all the reasons taking a loan make so much sense. My favorite reason of all is called “leverage.” The same investment capital can purchase a property for 100% cash or if 20% is utilized as a down payment, that same investment capital can purchase five properties, each yielding five times the return on the capital investment. The article illustrates it clearly and my personal experience proves it to be true.

Since 2000, I have purchased four properties (three in Paris and one which will close this Summer in New York) valued at approximately more than $2 million for a total out-of-pocket investment of $40,000. Hard to believe, but true. It started with a 20% down payment and then as the equity in the properties built, was able to take equity release loans. The properties continue to appreciate, those with rental income continue to earn revenues and the potential to leverage the holdings to acquire more continues to offer new opportunities.

Does ‘synchronicity’ play a role? Of course it does! One must pay attention to the opportunities that come along and see them as part of the natural path one’s life takes. If that path keeps taking you to Paris, then this may be one of those opportunities…

Editor’s Notes:

Subscribers to French Property Insider can listen to the conference call by clicking on this link: /frenchproperty/insider If you are not a subscriber and would like to be, visit /frenchproperty/insider

Mary Fort will be joining us at the Living and Investing in France Real Estate Conference February 16-17, 2008 in Miami Florida. Visit /frenchproperty/conference for more information and to register.

To contact Mary or learn more about a mortgage in France, contact our Mortgage Manager, John Rule, at [email protected]

A la prochaine…

Adrian Leeds
Editor, Parler Paris