Investing Internationally

Foreigners Buying in the USA

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Investing Internationally

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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote

This is very simple, in which countries you're investing and why?

I travel a lot, and have relatives in more than 10 countries so it will be interesting to know your opinions.

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Mark Masiel

Lima, Lima · Member since 2014 · 59 posts · 11 votes

12y

I have lived and worked (not in real estate) all over the world for 20 years in 7 countries. When I first started out I noted how cheap properties were in other locations, which were mostly "third world". Wow have things changed. Outside of say some reasonably priced areas of Europe (and I don't think it would be easy to purchase if you are not a citizen of the EU, but I am not sure) I find real estate as a whole, far cheaper and investor friendly in the US than most places of the world. I was looking at Costa Rica the other day and financing seemed doable but at 9-10 percent.

My family lives in Peru and it is way out of our budget, INSANE prices and they love cash. A beach house 2 hours north of Lima can cost 600000, the quality is nothing great and it can be used due to weather really only 3 months a year. Who buys that in cash? Financing is just taking off but you don't get anything like you would here. with high interest rates and stricter control, which is good I guess as they are hoping not to repeat the past errors in the U.S.

However, I mean does it make sense that my wife and I have an upper middle class US income right now and there is no way we could afford to buy property in Peru but we can buy in SOCAL or South Florida or whatever? And I don't mean just the capital Lima, it is expensive everywhere.

One of the reasons why I have become more interested in real estate lately as that I see that in the U.S., even though there aren't as many deals these days, the property is still so much more affordable than just about anywhere else. I know that is not reason enough to invest but sooner or later something has to change as I just don't see the combination of low interest rate and the relatively low prices of the U.S. practically anywhere else on Earth.

I hope I am wrong and look forward to biggerpockets.com users telling me where to invest, because I love traveling and living overseas!

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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
12y
Now, I only invest in Panama because I live here

The rules for investing in other countries are completely different so you need to know what you're getting in to before you sign on the dotted line. Have an attorney review all documents before you sign.

I bought an property with an organic coffee farm and house. It was a cash purchase yet it still took 6 months to close. Things are done very differently in other countries.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Jackie Lange Ohhh I see, I would like to invest besides United States (Puerto Rico, Florida, Texas & California) in Dominican Republic, Australia, Singapore, & Colombia. I have relatives & friends from there who are starting to be interested in real estate so it won't be a problem for me.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
Anyone else?
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Mark Masiel
Lima, Lima · Member since 2014 · 59 posts · 11 votes
12y
I have lived and worked (not in real estate) all over the world for 20 years in 7 countries. When I first started out I noted how cheap properties were in other locations, which were mostly "third world". Wow have things changed. Outside of say some reasonably priced areas of Europe (and I don't think it would be easy to purchase if you are not a citizen of the EU, but I am not sure) I find real estate as a whole, far cheaper and investor friendly in the US than most places of the world. I was looking at Costa Rica the other day and financing seemed doable but at 9-10 percent.

My family lives in Peru and it is way out of our budget, INSANE prices and they love cash. A beach house 2 hours north of Lima can cost 600000, the quality is nothing great and it can be used due to weather really only 3 months a year. Who buys that in cash? Financing is just taking off but you don't get anything like you would here. with high interest rates and stricter control, which is good I guess as they are hoping not to repeat the past errors in the U.S.

However, I mean does it make sense that my wife and I have an upper middle class US income right now and there is no way we could afford to buy property in Peru but we can buy in SOCAL or South Florida or whatever? And I don't mean just the capital Lima, it is expensive everywhere.

One of the reasons why I have become more interested in real estate lately as that I see that in the U.S., even though there aren't as many deals these days, the property is still so much more affordable than just about anywhere else. I know that is not reason enough to invest but sooner or later something has to change as I just don't see the combination of low interest rate and the relatively low prices of the U.S. practically anywhere else on Earth.

I hope I am wrong and look forward to biggerpockets.com users telling me where to invest, because I love traveling and living overseas!
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Buddy LaRue
Involved In Real Estate · Palm Springs, CA · Member since 2011 · 144 posts · 78 votes
12y
The United States has, traditionally, had lower cost housing than pretty much anywhere else in the world. You're in the right country, now just find the right place to invest.

I enjoy South Florida because Florida is the fastest growing state in the union due to the ever increasing retirement community, our great weather, and again our relatively inexpensive housing.
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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
12y
Most purchases in Central and South America are cash.

Financing is available with 20-30% down for non-citizens. In Panama and Ecuador it is 6.5% currently. They will only give you financing until you turn 70. So, if you buy when you are 50, you can get 20 year financing. If you are 65, they will only give you 5 year financing.

Plus you have to get a life insurance policy for the amount of the loan naming the bank as the beneficiary.

Financing for citizens is different than non-citizens. They get 5% down loans, and 3% with payments bi-monthly.

The trade off, is that most of these areas have no or very low property taxes. In panama, you get a 20 year property tax exemption. Compare that to the $3000 - $4000 per year per property that I'm paying for my houses in Texas, it is a huge savings. Even after the 20 years, the property taxes are 1/2% of the property value, vs the 2.5 to 3% tax in the USA.

I like to diversify and not have all my money invested in one country.
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Mark Masiel
Lima, Lima · Member since 2014 · 59 posts · 11 votes
12y
We have dual citizenship in Peru and I can tell you we would get nothing near 3 percent and cash is still king.

Most is cash and property taxes are cheaper though in Peru at least there is always another document to get stamped or whatever. Our relatives just paid a lawyer 1500 dollars for some issue they had with a title from our family house and that was talked down from 10K.

Plus, I just don't see myself paying cash for some tiny ill built apartment for 110K in a not very special area just because everyone else is doing it. I would think that 110K would go farther in other investment vehicles. I know very few Americans with 110K in their pocket anyway.

How about investing in international Cd's? The PTA of our school in Indonesia made great income on Indonesian cd's at 7 percent. Sure you have fluctuation in currency (can go both ways) but investing in real estate overseas has similar risks, and if you are not a citizen your have very little protection, unless of course you are a foreigner investing in the U.S.!
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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
12y
just a basic savings account earns 2.5% in Panama and Ecuador. You sure can't get that in the USA.

Some credit unions offer as much as 7-8% interest

I don't know about other countries
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Mark Masiel
Lima, Lima · Member since 2014 · 59 posts · 11 votes
12y
Yes, banking in other countries can be an easy way to gain income though there are of course the risk/reward scenario.

I was getting paid in Thai Baht in 98 and woke up one morning with the realization my currency was worth half the amount it was the day before. Of course my salary stayed the same. It was not a good year.

As far as the initial question, I had looked into Australia a few years ago (my daughter was born there) and it seemed that Queensland offered pretty good deals as they suffered a bit of the housing bubble that the states did and Aussies bought into the North for investments and second vacation homes. However with the currency exchange the prices did not seem within my humble reach. The U.S. was still cheaper.

I don't know how Singapore can even be a possibility unless you are independently wealthy as they were rated I think # 6 most expensive city for real estate in the world recently.

When I lived in the Emirates there was a ton of development in Dubai and Abu Dhabi that was very fashionable to purchase/invest in. Last I recall the bubble burst around 2009 but now has been creeping up again. I personally wouldn't trust the construction for a moment and they were basically built on slave labor in my opinion.

My experience tells me that people in England and Europe invest overseas lots in places like Egypt, Tunisia, etc, so you could always go on U.K. websites to see where they are flocking to. There are incredibly cheap prices in some areas of Italy but I do not believe a US Citizen can buy them-not sure about that though.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
What about Belize? I watched some videos about real estate opportunities . there's a PDF with the benefits of invest there.
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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
12y
I would not invest any money in Belize. Their economy is a mess. The government defaulted on their debt. And they have hurricanes.
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Thierry Van Roy
Maastricht, The Netherlands · Member since 2013 · 131 posts · 18 votes
12y
Europe is complicated. Every market is in a different situation, interest rates and financing vary and so on. The best way to understand Europe is that the EU has rendered all competition to a fiscal nature. So in order to attract international "hot money", they need to make it interesting for investors. That's why France is going down (the Hollande fiasco) while Germany and The Netherlands are on the up and up again. Though Germany is also because of Eastern Europeansd, while the UK is booming because of Hong Kong Chinese and Arabs. Meanwhile, cheap deals in the south (Spain), but there are a lot of pitfalls.

Don't expect big fiscal advantages though. If you have the capital for Monaco and such, then you're probably not on BP seeking advice.

If Asia peaks your interest, I remember this documentary series by some Brit on (among others) Dubai, Signapore, Vietnam, Japan. Don't remember the title and can't find it keyword searching youtube anymore. But the series was very helpful to me as an investor.

As the above have already stated: you need cash. At least compared to Europe and most of Asia, the US is dirt cheap. You can get financing, but don't expect anything for below 80,000 EUR in cash deposit.

Or you need to be willing to go on an adventure in a third world country like Cambodia. Did you know Nigerian houses have "NOT for sale" signs outside, because their house has been sold nine times over to 'investors'?
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Rodney Walker
Stone Mountain, GA · Member since 2014 · 37 posts · 11 votes
12y
I like the Dominican Republic myself. There are significant tax incentives investing there and the weather is perfect. Biggest rick is getting a lawyer that is well versed in international law and has experience in real estate sales to foreigners. The title on real estate can be tricky and squatters can be a major problem.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Rodney Walker thanks for the tip, I want to rent a raw land in Dominican Republic to export livestock to Asia
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Mark Masiel thanks for the info !
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Elizabeth B.
Investor · Beijing, Beijing · Member since 2013 · 8 posts · 6 votes
12y
We've bought a small place in Sicily to let to tourists, and are in the process of buying another in a different part of the island. Both managed by the local agencies from which we bought them. In 2015 we may go for another in Athens, if prices remain a good value there. In these areas there aren't many jobs and the local rental market isn't great, but these are popular tourist destinations, and foreign guests pay more than locals could, even accounting for the short peak tourist season..

Re. investing in Europe, it's relatively straightforward to buy RE as a foreigner. Residency is another matter. However, Greece has a program to offer residency to foreigners - and up to 9 family members - who buy a home for 250K Euro or more.

Singapore is pricey, and to get good financing you'd want to be living/working there. However it often tops lists for "best location" for expats. We are looking to relocate there from Beijing eventually.
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Matt C.
Rental Property Investor · Jupiter, FL · Member since 2013 · 48 posts · 18 votes
12y
Mark Masiel My wife is Peruvian, from Arequipa. We were down there over Christmas. Arequipa has changed so much in the 8 years I have been going down there. 3 big American looking shopping malls and high rises everywhere. The traffic has gotten ridiculous and everything cost as much at does here. We have cousins in Lima, Mira Flores to be exact. Their apartment has doubled in value in the last 3 years. I feel like I am missing out on a boom time. But I agree cash is still king down there. And. I only have enough to be the court jester.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Thierry Van Roy thanks for the info
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Thomas Alexander
Investor · Los Angeles, CA · Member since 2013 · 32 posts · 3 votes
12y
Jorge C. I would probably want to detour this a bit to talk about an underlying issue that is outside of fundamentals, analysis, and credit risk when investing abroad. Americans, culturally, are raised and educated differently than any other country in the world. There is no doubt in our ability to use the knowledge we have gained from our education system here and access to that knowledge making us extremely "book smart". Unfortunately, the majority of us Americans lack the "street" smarts it takes to broaden our desires to take our investments internationally. Unless you are an institutional firm in the US, you run the added risk of being swindled, hustled, and straight up robbed by places in the world that would appeal to is American investors because it makes sense "on paper". I grew up shadowing my dad as he built his international oil company every step of the way . While he while he was very "book smart", his success was credited to the street smarts he had gained by growing up in a very rough communist country of Eastern Europe. To emphasize the importance of this skill, he was utilized by many of his friends to expand their American banks and private equity firms to capitalize on other markets internationally and successfully did so. I say this also because I have a couple of friends who tried to do the same and got burned badly and after talking to others I have heard of similar stories. The global economy preys upon us Americans so you need to incorporate this into your decision to go internationally. Again, I don't mean to say this to discourage you, I am saying this because it plain and simply is the truth. Unless you are the exception or have a reliable resource, I think this factor weighs more than the incorporated factors of valuation, analysis, and foreign political instability. Tread lightly. As one poster mentioned above, real estate in America is the best place to focus on and it's for good reason that foreign investors want a piece of this market.
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Thomas Alexander I appreciated your time for replying, thanks !
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Account Closed

I had 8 properties in Australia at one stage and have slowly sold out of the entire portfolio.

The market is booming quiet heavily there at the moment and I don't believe its sustainable. Buying based on hope a property will go up in value more than you paid is a recipe for disaster especially when investors are getting into so much debt.

Hoping is not a strategy.

On that note I would love to buy a holiday apartment in the Bahamas hehe.

Thanks
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Engelo Rumora Thanks for the feedback. I want to visit Australia soon.

Also the Bahamas haha
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Account Closed:
@Engelo Rumora Thanks for the feedback. I want to visit Australia soon.

Also the Bahamas haha

You definitely should hehe

The Bahamas are amazing also
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Multi-family Investor · San Juan, Puerto Rico · Member since 2014 · 90 posts · 1 vote
12y
@Jackie Lange Interesting, look what I found about Belize [REMOVED]

Hurricanes? I have been living in Puerto Rico & Florida all my live LOL (It's not a problem for me)
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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
12y
My last visit to Belize was a one day cruise stop. I don't care about the touristy things so a friend and I asked a local driver to take us around to see the REAL Belize. That is how you see what is really going on in a country. If you go with a real estate agent or developer, they will only show you the best of the best.

Have you been to Hell, Belize? There really is a town named Hell.

At the end of the day trip, the driver was driving down a beautiful road in the jungle but we could see there was a road block at the end of the street. There were 5 people with rally big machine guns pointing at us.

Our driver said "don't worry, those are just Honduran guerillas guarding their drug turf. I will talk to them and everything will be ok" He spoke to them in Spanish, paid a bribe to get away, then speed away as fast as possible. After we got back on the main road the driver saw a 12 foot long snake crawling along side the road. He quickly moved the car to run over the snake saying "snakes are the devil"

But all of that together with their severe economic problems, and it is not the kind of place I would want to live or invest.

Yes, Belize is an English speaking country, and the official language is English but many Belizeans have such an accent it is hard to understand at times. Remember that Belize is surrounded by Spanish speaking countries and there are many people in Belize who only speak Spanish ( like the guys with the big gins)

Yes, there are some parts of Belize which are beautiful. But it is not for me - not even a place to vacation. There are too many better places to go

Just my 2 cents
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