Buying Property in Italy: Mortgages, Down Payments, and the Property Tax Advantage

Gaetano Mortati (00:00)
We have a different array of clientele. We have folks that are retired in America and the cost of living on Social Security has gotten so astronomical that they can’t afford it anymore. And I think one of the biggest perks for Americans to buy in Italy is that when you purchase a house in Italy and you buy the property, when you buy and sign for it, you pay the taxes at purchase on the house. And after that, there is no property taxes anymore for the rest of your life. Okay. So unlike in America, that every year, even though you own the house and you finish paying a mortgage and the house is yours, you still pay property taxes every year on that property.

Joseph Crooms (02:14)
Everyone, welcome to Investor Fuel Real Estate Pros Podcast. I’m your host, Joseph Crooms. Today I’m joined by someone I’ve been looking forward to go— chatting with. I don’t want to get his name wrong, so I wanna let him introduce himself, but I believe it’s Gaetano, but I may not be too fluent in my— my Italian. So I’m gonna let him say, because it— I don’t say hello to everybody.

Gaetano Mortati (02:41)
Hi Joseph, how are you? Thank you. Gaetano Mortati, I’m the founder and CEO of BuyItaly Mortgages.

Joseph Crooms (02:47)
Okay, great. So glad to have you here. I think our listeners are really going to take something away from how you approach the mortgage industry, but also foreign. So— so let me ask you that question. Let’s dive into it. So first off, for people who may not be familiar with your world, give us the short version. What’s your main focus of business and what markets are you operating in?

Gaetano Mortati (03:14)
We provide mortgage services for foreign buyers that buy property in Italy. There is a misconception out there that foreign nationals cannot— cannot get credit, cannot get a mortgage in Italy. That is not true. It is a complicated process, but that’s why we are in the business that we are, because we service that particular niche of getting the right bank, the mortgage approved for the person and— and the folks that are buying the property in Italy. So it is feasible. The only thing that there is a difference as far as the credit that’s given from the Italian banks, the most the Italian bank will give for a property purchase is fifty percent LTV, loan to value, which means that whatever price of the property is, we can get half of that through the Italian bank, and then the client will have to use their half of their own funds and liquidity to finalize the purchase. Some folks, you know, coming from America, you know, the— even having a— a good income and a lot of savings and a lot of money, they’re like, “Well, you know, we should get a hundred percent, you know, a hundred percent without a problem.” I says, “Yeah, but you— you have to understand something. You’re a foreign national. You don’t even live in Italy. Why would an Italian bank even wanna give you money?” You know? I mean, it’s like if somebody just came to America and says, “Hey, can I borrow a million dollars from an American bank?” It’s the same exact thing. There is no report. There is no, you know, mutual collaboration. It’s the first time that you’re asking for a financial extension to get some funds, so therefore they limit it to fifty percent based on your income, obviously.

Joseph Crooms (04:58)
You mentioned to me that sometimes they— American buyers have tried to purchase the proper— property and then come back for the mortgage. Can you explain what is your clientele look like and what are you doing to combat that problem?

Gaetano Mortati (06:02)
Yes, so we— we have had clients that originally found a property in Italy that they were interested in and proceeded forward with making a offer, a purchase offer, and giving a deposit on the property. Secondarily, they contacted us requiring and asking for a mortgage. The issue here is that when they signed the proposal agreement and left the deposit, they did not put in that proposal agreement that this proposal is conditioned to them obtaining a mortgage from the Italian bank. So without that condition in that proposal, if something goes wrong, they will lose their deposit on that property. So— but that’s beyond us. So it’s— it’s on the buyer’s side that the mistake was done. So we always try to put out that information out there for folks that do want to buy property: before you sign anything, before you make the step forward, before you do anything, reach out to us, let us look at the paperwork, let us look at the documentation and make sure that everything is in order so that you can make a sound proposal and not worry about losing any money in deposits in case the mortgage does not go through on your behalf.

Joseph Crooms (07:18)
Gaetano, how long have you been in this business?

Gaetano Mortati (07:21)
Well, my partner— Alber— Dr. Alberto Signorini’s been in the business fifteen years, here in Italy, operating in Italy. BuyItaly Mortgages is a three-year-old company. We started this business three years ago. I’m a disabled veteran, disabled combat veteran. And we opened up the business to provide the service specifically for Americans, but the international buyer market, here in Italy.

Joseph Crooms (07:47)
First of all, thank you for your service. Yes, sir. Let’s— what is your basic— what— what’s— which— what are your clientele? What is their financial status that they— that you, you know, they need to be a minimum at before you— that you look at?

Gaetano Mortati (08:03)
We have— I have to say— I have to say that the clientele is— is a broad spectrum. We have a very various clientele for the reason that the real estate market in Italy, it’s so big and it has so many different price tags. You can go from little houses, little villas and everything, for less than a hundred thousand euro, up to millions of euros for really massive and ma— immaculate and beautiful villas. So we did get— we do get a— a broad array of clientele. We have had clients that bought very, very, very luxurious and important villas in Tuscany and in Sardinia, over eight, nine million euros. And we have had customers that bought a nice little house right in front of the water on the Italian coast in southern Italy for a hundred, hundred and fifty thousand euros. So it just— it just depends. The market is so broad, and the availability for folks on the properties, on the real estate properties, is really immense.

Joseph Crooms (09:04)
So you’ve been talking Euros. Can you sort of like say, on the high end, how— how— how does that convert to American dollars? At fifty percent also, how much would they have to put down?

Gaetano Mortati (09:15)
Yeah, you’re right. Right now the exchange rate is a little bit more favorable to us, as the dollar started gaining a little bit onto the Euro. We’re still a little bit lower. We’re about fifteen cents shy than being part— par with the Euro. So technically, whenever you do something, you always add a fifteen— fifteen to eighteen percent more on the price tag. So if you’re paying in Euros, obviously from dollars, it’s gonna be fifty percent more because you have to do the US dollars exchange into the euro.

Joseph Crooms (09:47)
Yeah, so sa— say— say five dollars. What would that be like?

Gaetano Mortati (09:51)
Five dollars would be right now about three euros and fifty cents.

Joseph Crooms (09:55)
Okay, so that’s— so they— they got it s— so actually they’re gonna pay three dollars and fifty cents instead of four or five dollars. Got it. Right.

Gaetano Mortati (10:03)
If you’re looking at a hundred thousand euro, exactly a hundred thousand euro home, for example, that means for us in the US, it would cost us about one hundred and twenty thousand dollars because you got the exchange rate in the forex exchange to send it over.

Joseph Crooms (10:55)
In the three years that you’ve been operating, what have you— what is basically what is your revenue? How has it increased from— from year one to now?

Gaetano Mortati (11:04)
Okay, well year one was a struggle, you know, obviously to— to— to get clients, to get the name out there, to be able to show that there’s a service that can help you and provide you know the assistance that you need to buy property and also to be able to access financial liquidity here in Italy. So the first year was a little iffy there, you know, we kinda— kinda pulled the belt a little bit, you know. The second year we started picking up momentum, and and then our names started getting out there, especially on social media. And now the third year is really— we are getting overwhelmed by requests and contacts from— from folks looking to get a mortgage and buy property. So it’s definitely increased within the last year. We’ve seen an uptick exponentially on the demand for this type of service.

Joseph Crooms (11:53)
So if I was to say, how long have you been operating at the level that you are now? Let’s— give me an idea, what’s that level right now?

Gaetano Mortati (12:01)
At this level here right now with the requests that are coming in— and I’m talking about about two to three requests daily of new clienteles or at least potential clients, because not everybody then winds up buying a house or wanting a mortgage or whatever— but the contacts we get, two to three contacts a day asking for information and wanting to know. At this level here, it’s the last— the last six, seven months right now that we are at this level here, where it’s a constant.

Joseph Crooms (12:28)
And what would that translate into revenue?

Gaetano Mortati (12:30)
Revenue, it depends. Obviously, you know, the work we do today is paid months from now because we— we get paid when we go to closing, when we close on the property. So, you know, it takes the process of getting everything and getting the mortgage approved and then setting up the closing dates. So usually from when we start the process of the mortgage to when the client goes to close on the property, it’s about two to three months. So we work today and then two or three months from now we’ll be able to see our fee being paid by the client when they pro— when they actually purchase and— and buy the product.

Joseph Crooms (13:05)
So this— this is a revenue question because I— this is for our audience. How much does your business do about a month now for the sake— since you know, you said this last year you’re doing better. So how much are— how much better are you doing, and— and dollars and cents?

Gaetano Mortati (13:20)
Okay. Our fee— our fee for our service is five percent of the mortgage amount. Whatever the mortgage amount is being issued by the Italian bank, five percent is our fee to find the mortgage, get it approved, and do everything for the client. Right now we are doing on average about two closings per month, two to three closings per month, and probably about fifty, sixty grand a month coming in.

Joseph Crooms (13:46)
Okay, great. That sounds good. You guys are doing— y— you— you’re lifting the weight now, so that’s— that’s great. Let me ask you something. How long— you saw the answer before, but how long have you been operating at this level? How are you sustaining it?

Gaetano Mortati (14:00)
At this level here, like I said, the last six, seven months has really been an increase in volume and demand. Okay. So— so at this level here, we’ve been working for the last six, seven months, it’s been increasing steadily. A lot of calls, a lot of people, folks reaching out to us, a lot of people that are seeing properties and wanting to get a mortgage. So it has definitely had an uptick of the— of— of demand in the last six, seven months. Certainly.

Joseph Crooms (14:28)
What— what— what do your clients look for? Are they normally vets or that go overseas and they— they or— and they see these— tell me about who your client would be.

Gaetano Mortati (15:19)
We have— we have— we have a different array of clientele. We have folks that are retired in America and the cost of living on Social Security has gotten so astronomical that they can’t afford it anymore. And I think one of the biggest perks for Americans to buy in Italy is that when you purchase a house in Italy and you buy the property, when you buy and sign for it, you pay the taxes at purchase on the house. And after that, there is no property taxes anymore for the rest of your life. Okay. So unlike in America, that every year, even though you own the house and you finish paying a mortgage and the house is yours, you still pay property taxes every year on that property. In Italy, you don’t have that. You pay it when you buy it, when you do go to closing, and then after that, the house is yours. So a lot of folks see that as a— as an incentive to say, “Well, you know what? Let’s sell the house we have here in America, let’s buy a nice little house by the water, right on the beach or whatever, or if we want, up in the mountains, you know, on the hills and whatnot in Italy.” We pay the taxes once, and then the rest is ours. And our Social Security, our retirement pay every month is going to go a longer way because we don’t have all of those expenses and taxes that we have to pay in the US right now. Okay, that’s— that’s the retiree. I’m talking about the retirees. Then we have folks in the younger, so to speak, generation that are looking to invest in a property as a vacation home. So they like to buy a nice property by the beach, on the water, as a vacation home. They come to Italy on vacation two to three weeks, and then when they’re not here and they go back to the States, they actually rent the property out as a B and B and they have an income generated from the property that they purchased, which by the way, offsets the monthly mortgage payment because the rental of the property is paying the monthly mortgage payment. So they don’t have to even make a— a— a— a mortgage payment out of pocket.

Joseph Crooms (17:18)
See. So let me ask you this question. What’s been keeping that machine that you are running now smooth?

Gaetano Mortati (17:25)
Well, a lot of dedication, I must say, that’s for sure. A lot of dedication. I’m a military guy, you know, I had a career in the army. So you know, I was an NCO, non-commissioned officer, you know, and leader of men. And dedication and operational procedure is an important thing. I answer my phone, even if somebody calls me in America and it’s a six-hour difference, eleven o’clock at night, I’m gonna answer the phone anyway, you know. So I— I— I don’t put it off because the client might not know that I’m in Italy and they’re calling the 800 number in America, I’m gonna answer, you know. So for me, the dedication to the client and— and— and helping the clo— the customer is paramount. I think that’s what makes— sets the difference is that no matter what time it is, no matter what you need, we are there and I will always answer and— and— and be on the— on the client’s side a hundred percent.

Joseph Crooms (18:22)
Now I know every operator has had a moment when things got real. Maybe a deal that just went sideways. Do you mind sharing one of those moments with us?

Gaetano Mortati (18:30)
Yes, yes. I had a— I had a very, very important client from Miami that was buying a beautiful, gorgeous villa and old borgo in— in Tuscany. I think it was— final price was eight point seven million euro. And we started the mortgage application for him and this guy— this guy was making a good paycheck, about three hundred thousand dollars a month paycheck, okay, out of his business. Yet the bank in Italy reduced the amount of the mortgage, you know, and he got very upset and was like, “Well, I don’t understand, you know, I got— I got the money. Why are they— why are they giving me less?” And then they just reduced it. And you know, it took us about eight months to finalize everything, going back and forth, you know. And it— it was difficult and very stressful for us because we were the— in-between go-to. So we’re trying to, you know, relate to the client and— and— and calm him and explain to him how things are in Italy, the bureaucracy, the issues you can come into. And also we’re fighting with the bank saying, “Hey, you got a solid client here, a company that is— is— is on the NASDAQ on the New York Stock Exchange, okay. How can you say or be afraid that it’s gonna go out of business? So you’re afraid to give a few millions because it might go out of business, you know?” So we had to go back and forth. That was a very stressful moment. However, after eight months of— of— of dealing with it back and forth, we finally were able to get it finalized. The Italian bank was able to issue a two million euro mortgage. The client came up with the other liquidity on his own and we went to closing, and he bought the villa, the beautiful villa, and he— he’s all happy.

Joseph Crooms (20:18)
Sounds great. It’s not— that’s the kind of stuff people don’t talk about enough. And honestly, it’s what separates the folks who are just— just dabble from the ones who stay in the game for the long term. Let me ask you this. What are you focused on solving or scaling right now? What’s your next real goal?

Gaetano Mortati (20:37)
Well, right now, right now our goal is to open up our own real estate agency so that we can provide the service to the clients. Because a lot of clients come to us asking for a mortgage even before they have located a property that they want to purchase, okay. So in that case, I have to refer them to various real estate agencies to be able to help them locate a property that they might be interested in. And— and I see that, you know, that right there is giving business to other agencies when then we see that we can provide the same services. So that’s what we’re doing now— BuyItaly Mortgages is gonna be the financial means of getting the mortgage through the Italian bank, and we’re gonna have the real estate company that is gonna be able to provide properties directly for our clients so that we don’t have to, you know, send them out to different real estates throughout Italy.

Joseph Crooms (21:33)
So will you be— do you plan on having an American-based?

Gaetano Mortati (21:36)
The real estate company is gonna be in Italy. BuyItaly Mortgages is based out of Florida. We are a Florida-based company out of Fort Lauderdale. But operationally speaking, in Italy for the financial mortgage with the Italian bank, the real estate itself is gonna be here in Italy, but we’re gonna launch it, you know, online as a website too, so folks can see it right there and they can look at properties directly online.

Joseph Crooms (22:03)
That next move can either compound things or create chaos, depending on how you play it. Now—

Gaetano Mortati (22:15)
Yes, yes.

Joseph Crooms (22:16)
—so now, a lot of people are listening, either early in their journey or looking to level up. I think they benefit from hearing this. When it comes to building relationships and growing your network, tell us what that network has been and what’s been the biggest difference.

Gaetano Mortati (22:25)
Well, we’ve had— we had real estate agencies that have contacted us as they have properties and have international clients that wanna buy but that wanted to get a mortgage. Right now, there’s only three banks in Italy— there’s only three banks in Italy that provide mortgages to foreigners. Three banks, okay. Nothing more than that. So we have established a good rapport with them, we have established a good working relationship with them, and therefore we are able to provide a mortgage for a foreigner, unlike other companies that are out there that are not that successful, although they say, “We can do it.” The key is the working relationship and agreement that we made with these banks, as my partner has been doing this business for 15 years, especially for the American military community in Italy. As you may know, we have different military bases throughout Italy.

Joseph Crooms (23:31)
Sure.

Gaetano Mortati (23:32)
And he was providing that service to service members and families and contractors and civilian employees of the DOD. Now that opened up the door for us to be able to provide that also for Americans coming directly from the United States.

Joseph Crooms (23:37)
You’re on the— on the military website itself too? Do they advertise you guys?

Gaetano Mortati (23:42)
I do. We— I advertise in the military bases here. We do. Yeah. Yes, yes, absolutely.

Joseph Crooms (23:46)
That keeps a relationship strong. Yeah, yeah, so— so, yeah, that— so we can’t fake, the relationships are everything, especially with those three banks. I’m pretty sure you’re— you’re gonna tighten that relationship. Right now, before we wrap up, if someone wanted to reach out to you, Gaetano, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way to reach you?

Gaetano Mortati (24:07)
Okay, they can reach me directly through my email address, which is my first name dot my last name. So [email protected] is my direct email. Or they can call my 800 number and I can answer and talk to them directly and then we’ll exchange the direct line phone number, which is fine.

Joseph Crooms (24:31)
Hey, why don’t you spell— spell it out and then you can— let’s give it one more time. Do you spell it out? Yes.

Gaetano Mortati (24:36)
G-A-E-T-A-N-O dot M-O-R-T-A-T-I at buyitalymortgages dot com. That’s all one word. Buyitalymortgages.com.

Joseph Crooms (24:52)
Number.

Gaetano Mortati (24:53)
My direct line? You want my direct line or my 800 one?

Joseph Crooms (24:58)
Whatever you want to give. You can give the 800 if you want.

Gaetano Mortati (25:00)
My— yes, my 800 number is 888-711-1447. Okay, that’s my— my toll-free number. But if somebody wants to reach out to me, WhatsApp, I have WhatsApp on my Italian number. My Italian number is plus thirty-nine— that’s the country code, 39— 348-91-45-137. And obviously if you call with WhatsApp, it’s— it’s free completely. Even— even messages and phone calls are free on WhatsApp, so we can talk with no problem.

Joseph Crooms (25:35)
Perfect. Well listen, I appreciate you being your— your time, Gaetano, your story— especially, you’ve enlightened so many people— and your perspective. I wish you guys all the best as you move forward. Thank you for your service once again. We need more people in the space who are doing it the right way. Thanks again for being here. And for those of you tuning in, I know you got value from this. Make sure you subscribe. We got more conversations coming from operators just like Gaetano who are out there doing— building real businesses. We see you on the next episode. Gaetano, say see you later.

Gaetano Mortati (26:13)
Thank you so much, Joseph, for inviting me. It was a pleasure. Thank you so much, I really enjoyed the conversation with you today.

Joseph Crooms (26:19)
Thank you, my guests, and thank you for being here for Investor Fuel Real Estate Pros Podcast. See you on the next episode.