Dear Gutierrez Group Friend,
A new year has begun and, as has become customary here at G-Group, what better way to welcome it than with a brief review of the investment opportunities that we have to offer this year which, as usual, comprehend a fair array of industries and remarkable alternatives to profit from, always prioritizing what for us is our greatest premise in this field; a prudent, risk-controlled yet financially attractive maximization of wealth.
Many of you have been faithful witnesses of how we have grown from a small company merely dedicated to offer legal services to our international clients, to a fully integrated Family Office that, besides Business Law, also counts with a robust Wealth Management Division, with well over USD 30 million assets under management, and an auspicious Real Estate Division, with an ideal integration of brokerage, property management, and project development. Some others have known us for less time, and a few of you don’t even know us at all (at least in person) and are receiving this e-mail because you’re included in our database of clients. Regardless of the group you are part of, we’ll be glad to offer you the highly personalized, completely turnkey and fully integrated attention that we’re known for.
Now, where do we see ourselves and our clients investing this year?…
Before the imminent closure of one of our signature products (Factoring with Judgments with the Colombian government) due to the fact that the government is implementing a plan to pay this type of debt in full in within the next two to three years, this year we have decided to channel all of our efforts in the following three industries:
These are some sectors of our economy that we believe will perform very well during this and the coming years. With tourism expected to get back to pre-Covid19 standards, when hotels and AirBnb rentals in Medellin were pulling the very best occupancy rates in history, during the second half of the year. With an agro-industry that is back to being heavily supported by the current government, to the point that even some subsidies are being re-implemented. And with very attractive lending opportunities with different types of collateral and turnaround periods.
Let’s review in greater detail the opportunities available through our firm in each of these industries…
1. LENDING | Become a private lender, put your money to work for you and earn 10 to 12% per year
We began brokering Mortgage Loans back in 2012, connecting investors (creditors) with individuals willing to take debt to purchase real estate in Colombia, being these individuals mainly foreigners who could not borrow from local banks due to their lack of local credit history.We allocated a few dozen loans of this kind. Since then, however and as we kept growing, this product has critically transformed. Today we place much larger loans, and we lend mainly to local real estate developers, using a methodology that allows us to have several creditors in every single loan. This has allowed us to lower the minimum amount for our clients to participate in this product, from 300 million pesos to only 200 million pesos (less than U$60K at the current exchange rate), and to offer a very attractive short-term alternative since the term used is usually less than 3 years. Even though every loan has some particularities, this is what you, as an investor, can expect to obtain if you invest in this product:
- Minimum amount: $200,000,000
- Term: 1 to 3 years.
- Interest Rate: 11% per year, in average.
- Interest paid monthly or quarterly. Principal paid at maturity.
- Risk: Very low. We use highly commercial properties as collateral and we lend only up to 50% of its value.
- GG input: If you want exposure to real estate but prefer to have a completely turnkey solution, without having to own a property and deal with the nuances that owning a rental property implies, this product may be ideal for you.
- You can find an example of a payment plan clicking here.
And this is not our only product that involves financing. Back in 2014 we created what has shown to be one of our preferred products: Sutax Capital Taxi Loans. In essence, the concept is the same, lending money, but the features of these loans are diametrically different to those of mortgage loans. With more than 500 taxi loans placed since 2014 and a default rate of less than 1%, this product has become one of our clients’ favorites, especially to those who are interested in receiving a large inflow of cash in Colombia. The features of these loans are as follows:
- Minimum amount to invest: $120,000,000 (around U$ 35K)
- Term: 5 years.
- Interest Rate: 10 to 12%.
- Fixed monthly payment of interests + principal.
- Risk: Mid. Loans are collateralized against the pledge of the vehicle and the license to operate the taxi-cab, and we lend up to 70% of its combined value (car + medallion).
- GG input: This is the product where we’re able to deliver the largest amount of cash-flow.
- Ideal for expats living full-time in Colombia, who require cash-flow to cover their living expenses.
- You can find an example of an amortization plan clicking here.
2. AGROINDUSTRY | Colombian Timber, a project that besides changing people’s lives in a forgotten region of Colombia, also aims at making the world a better place for all of us
Plain and simple, the most rewarding venture in which we are involved. More than 300 active employees; a top-notch forestry management team; more than 20,000 hectares of protected native forests; more than 15,000 hectares of commercial species planted; more than 15 million trees planted; more than 40,000 tons of CO2 captured every year; socially and environmentally responsible, with all important certifications (FSC, The Gold Standard) already secured; a projected IRR as from 16% per year; and Colombian visa eligible.
In 2020 Colombian Timber became our most important product, with almost USD 10 million deployed in all of our projects. This year we’ll have two projects available for our clients to invest in:
Colombian Timber IX: Planted in 2020, this year we’ll have 6 units for sale, at a price of $150,000,000 each. This is a traditional project and it is expected to be harvested in 2027. Curious to see how this project looks like? Feel free a recent video of the tree plantation here
Colombian Timber VII: Using a land that we bought two years ago (hence the number 7), this will be our largest project to date. Besides the traditional forestry species, it will also include cashew, which provides fruit, and therefore cash-flow, after the third year. See the location of this and the rest of projects here.
Here’s what we have accomplished to date since we created Colombian Timber back in 2016. In yellow, the projects that are available this year:
Note: The table above shows what we have under the Colombian Timber name (projects owned by G-Group clients). However, the figures mentioned at the beginning refer to all of what our forestry operator has under management.
As seen in the table, this project hasn’t stopped growing since we developed our first one, and we don’t have any intention to stop, especially now that we’re in the very verge of consolidation of this industry, with the construction of our very own port, right in the same land where CT9 was developed.
3. REAL ESTATE | Different projects for different tastes, all of them with our special G-Group touch
Even with the countless difficulties we all had to overcome last year, 2020 ended up being a very positive year for us, as we were able to develop our first project in Laureles: 3450 Living, to be operational as from the February 1st. Luckily, for those of you that are interested in this type of asset, this year we’ll be developing other Real Estate projects, targeting different sectors:
An exclusive residential building located in the traditional neighborhood of Alejandria, right in the middle of El Poblado, featuring 18 large, luxurious and fully equipped apartments, and a 400 m2 commercial space. As opposed to Mr. Odd, where we sell fiduciary rights on the entire building, in Kiral we’ll be delivering individual deeds to every buyer. Prices starting from 1.3 billion pesos (U$360K). Both short term and monthly rentals will be allowed in the building. Project currently in licensing phase, expected to break ground in the second half of the year. To see our preliminary presentation, click here.
A mixed development in the beautiful town of Guatapé, located only an hour and a half away from Medellin and considered one of Colombia’s most beautiful towns. The project consists in residential and touristic development featuring 17 urbanized lots for buyers to build their own houses, 50+ apartments, a hotel and a boat marina. The first phase of the project (urbanized lots) is already finished, and during the next 24 to 36 months the other two phases will be developed. To see our preliminary presentation, click here.
And this is the new strategic turn that we have implemented at Gutierrez Group for what has to do with investment opportunities in Colombia: Financing | Agro/Forestry | Real Estate.
Would you like to create your own investment portfolio with us? Reach out to us, give us a figure and we’ll help you configurate your portfolio according to your cash-flow needs and expectations. We’ve been doing this for almost a decade, with a reputation that speaks for itself.
Cheers, and the best of wishes for this 2021 from all of us at Gutierrez Group!
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