What would you do if you were us?

Question

Hello everyone!

So this is my story. I'm a 32 year old teacher and my husband is a 33 year old engineer. We both found jobs in Dubai and we are earning quite a bit of money ($14k a month tax free). I'm from Puerto Rico (USA Passport), he is British. We've lived in Houston, Texas and London so we know a little bit about both countries.

We've been in Dubai for 2+ years now and we've saved some money. We have paid our debt, we have an emergency fund, have some money invested in the stock market and crypto and now we want to start investing in real estate.

Where would you invest if you had to do it from abroad? Britain, Puerto Rico, USA?

I don't trust Dubai that much for it to be an option but you can change my mind if you know about the market here.

We have around 70k right now of just leftover cash and we were thinking to invest in our first property by January and keep investing from then on. We've been reading books and listening to podcasts but I feel like it's so overwhelming.

So, if you were in our position, what would you do? I want to hear everyone's opinion!

Vernon Watts · Answer

Hi Daliz Colon

Lets keep things simple when it comes to real estate. You're in a good place to start your venture into this fluid market, I agree with  Gimenez as he states, you have to be careful as you invest in this market, you can lose money but gain insight into your next deal. First, settle on what Country you want to start your real estate venture in. Two, find out what criteria, within the market you feel more comfortable investing in ( i.e.commercial, residential, multifamily units, land, rehab homes etc.) Third, build your real estate portfolio (easily done) with your BP family, the BP family already have investment property for sell you can tap into.

Also if you need a quick walk through of contracts we will be happy to share that info with you as well. Fourth, pull the trigger on your first property to get your foot wet. Fifth, make a profit off your project, look over what you need to do better the next time, and do it again.

Happy Hunting, Vernon

Jennifer S. · Answer

Hi @Daliz Colon, wow well done on your savings rate, that is great!

I frequently compare value between the US and UK markets and while there are always opportunities in both places, I am currently focusing on trying to make something happen in the US until I can see how Brexit shakes out and based on my own mix of currency exposures long term.

One thing I am stuck on is finding affordable financing to make the numbers work. Interest rates of 6-7% when folks on the ground can get sub 4%, make the numbers trickier. In the past I got a good 30Y fixed rate loan from a big US bank off a UK income. I can't use that bank (I think) because of a tax related issue I have. But it may work for you. Happy to DM

Wale Lawal · Answer

@Daliz Colon

If I am in your shoe, I will invest in a market that I am familiar with and where I have resources that can make my investment safe and stress free. As @Courtney King mentioned, Texas market especially Houston and Dallas are very hot right now due to low interest rate, low inventory, high demand among other reasons.

I will suggest you narrow down your options and take actions. You are on the right track with multiple streams of income.

Thomas Greer · Answer

@Luke Hadden sure thing, I will shoot you a message.

Luke Hadden · Answer

@Thomas Greer, Just picking up on the key word “Singapore”. We started a monthly meetup a few months before Covid. If you have any contacts that are still here and interested to collaborate, please put them in touch with me. We meet the third Thursday in Rob Quay.  It would be interesting to learn more about your land deals as well.

Thanks!

Luke

Thomas Greer · Answer

Hey @Daliz Colon! I was an expat in Singapore for 7 years before making my way back to US.  I hate to default to "depends" but I think it really does.  It comes down to what you expect to get out your real estate and your relative risk/return profile.  When it comes to out country execution - US is super easy.  Also, if there is likelihood that you will be domiciled there...than that may be your best bet.  You are going to be more likely to find stable, cashflowing properties with 10%+ IRR in tier 1-2 cities.  If that is what you are going for.  If you are targeting high risk (high return land development deals with 2-3x multiples) than Puerto Rico or other places may be more conducive. (I have land deals in SE Asia, because of my stint there).

On the other hand, being an expat, you can more easily diversify across political/currency risk. If your stocks are all highly correlated w/ US markets than maybe you would want to diversify you exposure to another country.

Just some things to think about and I hop helpful: What are your target returns/cashflow for real estate? How "easy" do you need the process? Do you need want to diversify your portfolio.

All the best! I never made it to Dubai, but a lot of my old colleagues said good things.

Guy Gimenez · Answer

My first recommendation is to be very, very cautious. Believe none of what you hear and only half of what you see or suffer the risk of losing it all. Do significant due diligence on anyone you may choose to work with in any capacity. The real estate industry has more actors than Hollywood, some of whom are very skilled at helping people like you lose money, intentionally or otherwise. It never ceases to amaze me how easy it appears to be for someone to be separated from their money...so don't be that person that gets shorted because of unwarranted trust. Figure out your short term/long term investing goals, study the market, build the relationships you need to succeed and investigate all of these relationships since you're not here to meet with them face to face.

Sandy Sawyer · Answer

Where do you plan to live? Or where would you like to visit that can become a tax-free trip? Build your business to pay for your lifestyle!

Elizabeth M Williams · Answer

Hi! I live in Dubai, too. Let's connect on the phone, met a few people here that way. I can tell you what I've done, been here 8 years. I haven't bought in the market in Dubai, either. Nice to meet you 😊

Shahriar Khan · Answer

@Daliz Colon we have been in your shoes before. We both used to work at IOCs. We didnt end up going for different reasons but i recall numbers were great at net basis. 1 year expat net savings = ~1.7 years net savings in USA with home ownership. Knowing what I know, if i were to go then I would save every penny and invest passively in apartments (2/year) and then right before i get back to US, i will just buy 1 large commercial property over 40K retable SQFT  (preferably NNN warehouse/apartment complex) for myself and call is done :) ... very simple and it can be done by the time you reach 40.

Now if you ask where to invest in multifamily/commercial ... thats a different case... (PS: I would not invest outside USA, risk adjusted return factoring in country risk is too much risk to handle)