BRRR in Belize??

Question

Hi everyone.

So I'm doing a market study for different exit strategies for investors (current/future), and I know that one of the most difficult parts is the entry point for investing. With Belize being so close to the US and having easy systems, are there any US investors that have thought about trying that option?

Jay Hinrichs · Answer

@henry clark not sure if I tagged Henry but he does a lot in Belize and I would think he would be a great asset to talk to.

I went there a year ago as I have a client building a small resort on one of the islands and also trying to build some starter housing for the govmit.. It was interesting to say the least.

But there are plenty of homes and such so something gets done.. My guy had all local contacts but you have Belize time and that is real.. nothing happens in a hurry thats for sure.

Henry Clark · Answer

@Jay Hinrichs. Thanks for heads up.

OP. BRRRR won’t work in Belize:

1. Rinse Repeat-  Most people going there are doing a one and done for their residence.   So no rinse and repeat.

2.  Refinance- Belize banks will only finance 50% on 10 years at 12 to 15%.   No US bank will refinance.  So you have to have total Cash.

3.  Repeat-  Belize is a buyers market.  Properties can stay on the market for a long time.  So interest or time value of money can be significant.

4.  Cashing out- you have to get permission from the government to take money out of the country.  Unless you want to keep your money in that economy.

5.  Market-  you either have foreign investors who want the expensive beach scene.  Or the struggling retirees keeping housing costs low.  BRRRR won’t work for either market.  Doesn’t fit their objectives.

Your best REI strategy down there is to help a local convert government Lease land which is Pennie's on the dollar. Say USD $100 per acre for them to buyout the government lease. Then buy from them. Then do lots and sell for $5,000 or more per acre to expats.

No realtor or expat will touch this because it is risky.  Also long time.  We are doing one deal like this and it will end up taking about 1 1/2 years.  Can be behind the scenes politics involved.

Bill B. · Answer

“We” also don’t use proceeds from sales to go there because you can’t do a 1031 there out of the US. Something the USVI has going for it but for some reason you can’t even do to Puerto Rico.

Edwin Varela · Answer

This is good insight. I can see why it can be a challenge indeed. Thank you for sharing.

Andrew Postell · Answer

@Edwin Varela the main reason that we don't do BRRRR in other countries is because our loans don't allow us.  Meaning, the same loan types that we have in the US aren't available in other countries.  Now, in theory...if you could find the same HML, traditional loans, contractors, and renters anywhere else in the world, then yes, you could do it.  But that's why this is a US strategy.  All of those are available here and not elsewhere.

Hope that makes sense.

Henry Lazerow · Answer

I travel a lot and have looked into it in various countries. Biggest issue is you cant get good cash out refi loans outside the US. The rates are awful and they reset every few years with new fees. You also need be careful buying, realtors tend to sell things for legit 100% higher then what you can find them for if you drive around talking to locals or browsing facebook marketplace. Kind of two prices out there in these countries. Can be some great airbnb returns though if get it together!

Edwin Varela · Answer

Thank you for your input Jay. I agree, Belize really has it's own time. It's something even I as a local have to deal with. Will definitely reach out to Henry. I hope you return to Belize for visit sometime again!

Aaron T. · Answer

You need to come with capital, time, and connections of the locals and local area. We are building in Utila Honduras right now. Without the right local connections that know the area and people you will get nowhere as a foreigner. Then you need connections with good contractors that will not drag their feet or rip you off. Lastly, you need to pay in cash.

Depending on the demand, you may have equity, but it may sit on the market until the right buyer comes along, so that is all part of the holding costs and cuts into profit.

Edwin Varela · Answer

Makes complete sense. It's actually the same reason I gave to one of my friends in the UK, since I'm just really learning about this strategy while here. I don't think it's something that would work in Belize either.

I'm just curious what actual strategy would be beneficial for foreign investors in Belize so I can learn more about it and help provide them with solutions when they come to me.

BRRR in Belize??

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