FAQs for investor

If you are a buyer, find FAQs for investor here. If you are a homeowner, find FAQs for homeowner here.
What is my role as an investor?

Your role as an investor is to borrow a bank loan on behalf of a homebuyer. You will then purchase the property under your name. Every month, the buyer will pay for the interest and principal of the bank loan, and also an additional fee for your service. Ultimately, no money comes out of your pocket, yet you get to enjoy the benefit of free passive income.

How does Homebase support investors?

Homebase offers comprehensive support to investors, including, but not limited to, the following:

  1. Sourcing and matching you with the most suitable buyer / deal that fits your investment criteria;

  2. Facilitating banking and transactional processes for seamless deal execution;

  3. Serving as the bridge between the investor and the buyer;

  4. Issuing timely notices and reminders to both buyer and investor (e.g. for their respective payment obligations etc.); and

  5. Supporting to resolve any disputes or conflicts that may arise.

What fees do I need to pay as an investor?

You can find all the associated fees from this table below.

With 2 small payments, you are set to start generating passive income!

Whose name will the bank loan be borrowed under?

The investor will be the borrower of the bank loan; however, every month the buyer will pay an amount to the investor that is to be used for paying the bank loan's monthly principal and interest (i.e. the investor does not have to put up their own money to pay for the monthly payments to the bank).

How much can I expect to make as an investor working with Homebase?

You can use the calculator here to find out how much you can expect to make working with Homebase. As an example, a person making 50M VND a month can expect to make between 4 – 9M extra free passive income per month, or between 50M – 110M per annum.

How long is the average contract?

The contract can be as short or long as the buyer and investor can mutually agree; however, it is typically 3 years by default.

Can I exit the contract early as an investor?

Unfortunately, you will not be able to exit early as an investor; however, there should be little reasons for you wanting to exit the contract early as you should be enjoying the benefit of free passive income as everything is paid forth by the buyer.

Who is ultimately responsible for servicing the bank loan?

While the investor is the one who is technically the borrower of the bank loan, the buyer will be paying on behalf of the investor to the bank each month.

What if the buyer stops paying / defaults?

If the buyer stops paying any of the payment obligations, we will give the buyer a grace period to remedy the situation (usually 30 days); however, if the buyer still has not remedied the situation after the grace period, we will declare an event of default on the buyer, and the investor will now be fully entitled to sell or keep the property, whichever they prefer. The investor also does not have to give back any of the money that the buyer has previously paid to them, including the initial lump sum deposit.

If the investor chooses to sell the property, rest assured, Homebase would be there to support the investor in the sale process. As for the bank loan, the investor will now be liable for all payments until the remaining balance of the bank loan is fully repaid. 

What is the typical profile of the buyers that Homebase works with?

Broadly-speaking, there are 2 categories of buyers that we work with: 1) foreigners; and 2) locals.

As you may know, foreigners typically do not qualify for bank loans in Vietnam, and even if they do, it is limited to the duration of their work permit, usually 1 – 2 years max.

On the other hand, many locals that we work with are self-employed, business-owners or freelancers. These people typically do not have stable income, and as such, do not usually qualify for bank loans, and certainly not for high loan-to-value ratio / financing amounts. 

How does Homebase's business model work?

The crux of the business model is as follows:

  1. There are homebuyers out there that cannot qualify for bank loans;

  2. On the other hand, there are people that qualify for bank loans, but currently do not want to buy a home (“investors”);

  3. Therefore, we match these homebuyers and these investors together;

  4. The investor, with the help of a bank loan, will buy the home on behalf of the buyer and put the property under their name;

  5. In turn, the homebuyers, on top of paying an initial deposit, will pay for the bank loan’s monthly payment obligations, and pay the investor (and Homebase), a small fee every month for the service;

  6. If the homebuyer pays of all outstanding remaining loan balance (i.e. have paid for the whole purchase price of the property), the property will be transferred into the name of the buyer;

  7. If not, the investor gets to keep all paid up amount from the buyer and the property. 

How long does your process take?

The process can be as short as a few weeks to as long as a couple of months. Usually, the delays are in finding a suitable buyer for the investor, and vice versa. 

Who owns the property initially?

The property will initially be under the investor's name. The property is only transferred into the name of the buyer when the buyer has fully paid up all outstanding balance (i.e. paid for the full value of the property).

What is the eligibility criteria for investors?

An investor is eligible if they meet all the following criteria:

  • They should be at least 23 years old and generally not older than 63 years old.

  • You need to have stable and sufficient income to qualify for a bank loan (typically evidenced by salary slips, bank statements, business financials etc.)

  • You should be willing to hold the property until the buyer repurchases it or for the duration of the contract, which is typically at least a few years, depending on the terms of each deal.

  • Both Vietnamese citizens and foreigners can participate.

Would my CIC score be affected if the buyer does not pay on time?

Your CIC score will only be affected if the bank does not receive the monthly payments on time. In the event that the buyer does not pay on time, you will have to step in to pay the bank's monthly payment with your own money first. For the inconvenience caused by the late payment, the buyer will have to pay you a late payment interest fee of 0.054% of the overdue amount per calendar day.

What types of property do you work with?

Homebase works with property that meets all the following criteria:

  • All property types are eligible.

  • The property should be located in Vietnam.

  • The property must have clear and undisputed ownership.

  • The property should have legal documents that make the property eligible for a bank loan.

  • The developer or seller should be free from any legal disputes or risks.

Instead of getting a bank loan, can I just use my own capital to finance the purchase of the property and have the buyer pay me every month in installments?

Yes, you can also use your own capital to finance the purchase without invoking a bank. The mechanics are exactly the same, except that you are the one receiving all the payments instead of the bank, on top of the fee for your service.

Apart from the downpayment provided by the buyer, can I use a mix of my own capital and also bank loan?

Yes, you can use a mix of your own capital and bank loan. The mechanics are exactly the same, except that part of the money will go to you and part of it will go to the bank pro rata.

What happens if the house price drops or rises drastically? Will there be any changes in the fee?

No, there will not be any changes in the fee. Similar to how banks work, the fees that the Buyer pays each month is pegged to the outstanding balance amount, so while the house price might have changed, the outstanding balance amount remains unchanged.

What stops a Buyer from defaulting especially after just a few months?

Buyers typically do not default within a few months because they are usually able to foresee their financial circumstances at least in the near term. This is especially so as there is a huge penalty when the Buyers default as they stand to lose their entire deposit, including the initial lump sum deposit, that they have paid to the Investor. However, once it goes into the mid-term, it is sometimes harder for the Buyers to be able to forecast their financial circumstances; however, by then the Buyer would have already paid many months of payments, and since each month’s payment consists of a portion that is for paying off the Investor’s outstanding balance, the equity buffer for the Investor is also getting larger overtime, making the penalty when the Buyer defaults larger and larger over time as well.