Benny Mints (©Frederick Van Grootel)
Benny Mintjens has been an entrepreneur since he was fourteen, although he prefers to call that initial phase his ‘escape from school’. It did provide him with the necessary capital to buy his first building plot at the age of 16, which gave him a taste for real estate: Mintjens opened shops, bought houses and apartments and set up real estate companies. When people asked him how they could find profitable real estate themselves, he came up with the idea of Smart Real Estate Investing Solutions: investing in sustainable high-yield real estate.
“More and more people asked me how they could be supported in smart real estate investments and how they could therefore jump on that train,” begins Benny Mintjens. “Besides, because of my early contact with financial markets, I was also familiar with wealth accumulation and wealth growth and even give seminars about it, I realized that I had to tackle this. Smart Real Estate Investing Solutions is actually very simple – although it is often quite complex to arrive at something simple (laughs).”
“We buy real estate with the company, finance it for 80 percent through the bank and, as far as the remaining amount is concerned, we give participants the opportunity to step in to close that difference financially.. These participants also benefit from the rental yield. We consciously speak of low-threshold investing, because that is already possible for an entry amount of 5,000 euros. The maximum entry is limited per building.”
We consciously speak of low-threshold investing, because that is already possible for an entry amount of 5,000 euros.
“Once that residual amount has been fully financed, no more participants can join and we will look for the next building to do the same with it. That also means, of course, that as an investor you can only get in once we have found a new property.”
“That process is less obvious than it sounds, because we only buy profitable real estate that already has a tenant with a solid lease. And that is rather rare in the real estate offer. That is why we look for so-called ‘burnt properties’, usually properties that are linked to emotional problems with the seller of the property,” says Benny Mintjens.
“I’m talking about properties that have to be sold because of a divorce, death, quarrel, gambling debts or something else. But also properties that have already been sold several times, but the original buyers did not receive financing. Both the seller and the broker then become tired of selling.”
“Properties that we can always purchase at least ten to fifteen percent cheaper than the asking price for the reasons stated. By ‘burnt’ I therefore never mean ‘material damage’ for the sake of clarity. That is also the reason why we can finance so much from a bank: because the bank bases itself on the valuation price and not on the actual price we pay.”
The unwritten sixteenth rule
“But ‘burned’ by no means means ‘less quality, because we apply no fewer than fifteen golden real estate rules when purchasing’, Benny Mintjens continues. “For example, when we buy an apartment in a complex, we not only want it to be of above-average quality, but also that the current tenants have indicated that they will continue to rent for a long time because of their social network in the neighbourhood. Of course we check in advance whether they have an impeccable payment history.”
“So we have fifteen rules, but the most important is the unwritten sixteenth: can we continue to let the investment property under the same current conditions once a tenant moves out? Only if the answer is ‘yes’ will we make a purchase”, says Mintjens.
“A final way to keep the building above average yielding is management & maintenance: we also look at which investments are really necessary and which are not, so that the costs remain in balance. Although the participant does not have to worry about this, this is entirely at our expense.”
Processing withholding tax
“Each month that a building is paid off, our equity increases. That’s where our profit is. The participants enter with an amount that is much smaller than the purchase price. They get the rental yield. That is also perfectly possible, because suppose a property costs 100,000 euros: the interest rate is still low on the at least 80,000 euros that we finance with the bank.”
Every month that a property is paid off, our equity increases. That’s where our profit is
“Which ensures that we have properties where we can offer participants a return of between five and seven percent gross yield – and those percentages are not fickle, but fixed per property and during the entire term. This return is also paid monthly, which participants greatly appreciate”, states Benny Mintjens.
We have properties where we can offer participants a return of between five and seven percent gross return
“Moreover, in the case of a private investment, we pay the withholding tax required by law and file a declaration. Entrepreneurs can also invest perfectly through a company, then the interest received will be added to the profit of the participating company and the then applicable corporate income tax will apply. Furthermore, no visible and invisible costs or other possible fees are due for the participant.”
Stripping and redecorating
“The only thing I must emphasize is that we do not know how long the investment period for participants will run. We buy the properties, but as soon as the tenant moves out, we have to look for a new one. If we succeed within three months and we can continue to rent out under the same conditions, nothing will change for the participant.”
“But if that is not possible, the investment will stop and the participant will receive a refund of his initial investment amount, of course with interest. We do not want investment money that we cannot match with a rental return, because that is where the magic lies. But we rarely have that situation, because our rents are affordable for tenants.”
“The participant’s investment only runs if a tenant is present, otherwise the investment stops and we pay back the investment amount in full to the participant. What we do if we do not find a new tenant within three months is either to wait until we do select someone, or to partially or completely strip and redecorate the building and determine a new rent.”
“The original participant is then the first to get the chance to re-enter at the then prevailing yield. Otherwise, we offer that opportunity to new investors. Existing participants can also reclaim their investment at any time and will always receive their return for the month that has ended. It is therefore better to ask for your money back on the fifth than on the 25th of the month (laughs).”
Due to the law of supply and demand, non-returnable real estate still finds its way to the market, from which we can conclude that real estate is and remains a reliable investment in any case. And certainly with a player like Smart Real Estate Investing Solutions, which durable profitable real estate.
“The market will only become more attractive, and for various reasons,” Mintjens points out. “Firstly because a concrete stop is coming, secondly because the price increases on construction products ensure that the value of real estate will not fall, thirdly because migration figures will only increase because of ‘the production companies to be brought back to Europe’ and fourthly because there are more and more single-parent families.”
“But for our concept that value doesn’t even matter, because once we have purchased a property, the participant will receive its (rental) return in any case, without any risk. And the rental market we invest in will only continue to grow, for the same reasons I just mentioned.”