Foreigns Investing in Real Estate in U.S. (facing challenges)
Hello BigPocketers, I wonder how many of us does actually live abroad (let’s say outside U.S.) and is at the same time an investor in Real Estate in the United States. This great country and huge real estate market gives us great investment opportunities, but there is also a part of sacrifice on it. I can imagine you all face many challenges when analyzing a new business opportunity in RE from home adding the distance factor. How many additional things we have to consider to minimize risks? How does this planning affect our lives? What are the risks involved and how do we mitigate them? How do you guys manage the investment at the distance?
So, as an ice breaker I will briefly share my experience and invite you all do the same. I live in Latin America, I started investing in Florida 5 years ago and experience was mixed, nowadays I am investing in Detroit area.
First lesson: if I don’t have a top local team in that city I don’t go. I bought at good prices in FL but lack of good property managers and local staff got me crazy! I am now investing in Detroit area and besides all things you can find in internet about ridiculous promises of profits (90% nonsense) I would have never done it without my local team.
Second lesson: Not 1 or 2, 3 or more quotation of services. When I started with RE in Florida I started with the first realtor and CPA that was introduced to me (they resulted awesome! But it could have been terrible). Nowadays always I am always looking for alternative options: CPAs, attorneys, realtors, handy men, property managers, etc.
Third lesson: Check the U.S. calendar before planning your trip. This may sound stupid, but I once travelled to U.S. and pretended to meet with the CPA on a day that I did not know it was Labor Day (yes, you can laugh). I lost that day in “financial” terms.
Fourth lesson: Ask, ask, ask. Sometimes when travelling to U.S. (and probably most countries in the world) the best way to get good quality information is just parking the car in the neighborhood you are analyzing and talk to locals in a Starbucks or a Dunkin Donuts while having a coffee, people walking the street, someone parking his car arriving with kids from school, in a pub or bar, restaurants...I mean everywhere!
Fifth lesson: plan your trips and be there! Every time I plan a trip to monitor the investments in U.S. I have to “block” 10 days of my life. Generally booking flights, hotel, car etc. is done 20-30 days before each trip. Depending on how your life is structured, your beloved ones (spouse, kids, girlfriend/boyfiriend, parents, pets) also have to participate in the process, because they are lending part of their time so that you can be travelling.
I have enjoyed a lot this experience and plan to continue doing it!!!
Please share your experience.