Find answers to your home equity investing and lending questions with Gap’s Investor FAQ resource.
Now that I’ve done a couple loans with gap investors, should I do a loan on my own? If you are happy with the results of the loans you have placed with Gap, it is because we have placed you in good loans, since the borrower pays all fees, why would you take the chance of placing your money on your own? Our experience and expertise in evaluating property, registry, municipal taxes, permits and the like properly, ensure you peace of mind and a consistent return on your investment.
At the end of the term if neither party communicates to the other about payment of the principal it is understood that monthly payments would continue until notice of cancellation from either party. Also the lender needs to give notice that he wants to call in the loan with a 30 day notice
You can get started by completing our new investor form and we will get in touch with you with equity loan opportunities that meet your investment goals.
An interest-only loan is a loan in which, for a set term, the borrower pays only the interest on the principal, with the principal balance unchanged throughout the term of the loan. At the end of the interest-only term, the borrower will need to pay off the principal of the loan.
Depending on the loan type, terms can range from 6 months for some hard money loans to up to 3 years for home equity loans.
We perform a site inspection. With over 75 yrs combined experience in Costa Rican Real Estate, we can give an accurate assessment of your property.
Typical interest rates paid to lenders will range between 8% and 18% or more per annum. Every loan is different depending on the risk, amount of collateral and duration of the loan.
Yes, you can invest in as many loans as you like.
The minimum investment with Gap Investors is US $25,000. There is no maximum investment amount.
If everything is in good standing, we will attempt to rewrite the loan, possibly using the current lender or offer the loan to a new lender.
All loans are secured by a mortgage lien on the property, or in the case of larger loans, the property can be transferred in trust if the lender wishes. In the case of multiple lenders a numbered holding corporation can be formed, which in turn is the beneficiary of the property in trust. This corporation would be used exclusively for the individual project and nothing else. As an investor you receive ownership in that holding corporation according to your level of investment.
Most loans require a broker for the lender and a broker for the borrower so the fees will be split between all the brokers that are working on the loan.
Then there are the office expenses, which include advertising, website maintenance, salaries, internet costs, communications, due diligence. Gap spends much of its time and energy on site visits that can entail long trips with overnight stays in many cases. Many site visits generate a 0% return as they do not fit our criteria or are not suitable for our lenders.
We strongly recommend that you research your tax obligations of your native country and comply with them.
If the borrower defaults on the loan, then Gap will help assist the lender’s lawyer in foreclosure proceedings or execution of trust guaranty on the property.
Closing costs can include costs for things such as attorney fees, appraisal fees, accounting fees, broker fees, lender broker fees, reporting, escrow fees, trust guaranty fees, government fees and stamps, and loan repayment collections if needed. Just like regular bank mortgages, the closing cost is taken out of the funds disbursed to the borrower. Closing costs are usually between 5% to 10% of your loan amount.
Bridge loans are typically higher because they are not conventional bank loans. These interim loans are a means to an end, and involve interest-only payments with the goal of traditional refinancing at a later time or through the property’s sale.
Banks are highly risk-averse and have certain collateral and income requirements for their loans. Someone going to the bank looking for a $2 million loan will have to have more than that in property, and possibly over $200,000 in yearly income. The borrowers coming to Gap are typically equity rich but cash flow poor, which leaves gap financing as an attractive choice.
At Gap Investors we have many qualified loan applications come to us on a regular basis. Our underwriters choose the best ones based on our previous experience with mortgages, and we work to establish terms that work for both parties.
At Gap Investors you receive the benefit of a wealth of knowledge and experience specific to Costa Rica, including the market, and laws and regulations. One shouldn’t be lending in Costa Rica on their own without a great deal of knowledge about the country. At Gap our goal is to give you a higher return than what you could get on you own, with the risks properly assessed and managed.
Absolutely not. Each loan is brokered, created and managed independently from every other. Unlike a general investment fund, the funds you provide for the loan are used exclusively for that loan, which is from you direct to the borrower.
No. SUGEF regulates banks and financial intermediaries, including investment funds that raise money from investors to place investments through their own company. At Gap Investors, we simply introduce lenders to individual loans requiring funding. Gap Investors Ltda. generates a commission for brokering the loan. Gap is a mortgage broker, not an investment fund.
Hypothetically speaking, what would happen to the funds I lent to a borrower, if Gap were to disappear?
Absolutely nothing would happen to the funds. The loans that Gap Investors Ltda. brokers are directly between the borrower and the lender.
As a mortgage broker, we charge a percentage of the loan in the form of a closing cost upon the signing of the mortgage contract. Just like regular bank mortgages, this closing cost is taken out of the funds disbursed to the borrower.
All mortgage contracts are between the borrower and the lender. The strength of Gap Investors is in identifying high value loans, evaluating the risk, and brokering the loan with your best interest in mind.
Gap Investors Ltda. operates by:
- Providing full transparency for its own operations.
- Requiring a good loan-to-value ratio (normally under 60% of appraised value), disclosed to lenders.
- Making sure investors and borrowers are protected by a mortgage lien.
- Being properly regulated by the laws of Costa Rica.
- Choosing reputable attorneys, accountants, title insurance companies, banks, appraisers, surveyors, and developers.