Does Venezuela's recession make it ripe for the picking?

Question

David Faulkner · Answer

I read that North Korea is also in a deep recession, just like Atlanta in 2008 ... maybe there are REI opportunities there too. If I can't find any opportunities in my own backyard, I'm going to seriously consider looking there ... oh, wait, there's a great deal next door ... nevermind ...

Michael Acosta · Answer

Absolutely no harm in considering opportunities outside of the US. But with regard to Venezuela in particular, the worst real estate market, in the worst city in the US would make a far better investment than Venezuela. Simply because of the fundamentals of each respective economy. Venezuela is a hopeless economic disaster. Of which there are no current viable solutions. Almost every US company that does business there has written off or sold their debt for pennies on the dollar. The outlook is VERY poor for the short to medium term. The decline in the price of oil and the political culture will be anchors for years to come. Think 10 years. Maybe.

Account Closed · Answer

@William Kyle Walker    There would be huge financial risks in investing there at the moment.  Some investors will probably get filthy rich.  Most will lose everything.

It is hard to explain what 750% inflation is like.  People in the US cannot imagine what it is like to stand in line starting at 3:00 am in hopes that the price controlled food store might get some food that day and if it does, that it will not run out before you get there.

Russell Brazil · Answer

@William Kyle Walker if you were to buy in Venezuela...and make a profit.....there is a reasonable the chance the government would seize your property and give you zero in return.  There is also a chance that if you visit Venezuela to see your property, that you would be arrested and charged with espionage.  My father in law was born in Venezuela, and he thinks it is too dangerous for him to go there and visit family.

Mike F. · Answer

Can you imagine managing a rehab in Venezuela? Better hire some machine gun toting 24 hour armed guards, then pay them off really well after it's done so they don't come back the day after its finished and gut the place to whatever they can on the black market. I think of the conditions in Venezuela as a cross between the United States during the great depression crossed with Berlin at the end of WWII sprinkled with the flavor of a cartel owned Mexican border town.

William Kyle Walker · Answer

Great feedback @Michael Acosta, as there are good and bad markets in every country there is going to be some opportunities in niches in Venezuela. If people are selling for pennies on the dollar someone else is buying.  But as they say in trading, never catch a falling knife. We should probably wait for the dust to settle there. I have an Airbnb guest right now from Ceracas and she said it is really bad right now and the people don't have the same mentality as Americans when it comes to home purchasing and selling. Her boyfriend is coming to visit her and to hopefully find work. She has been able to save money and send some home. Although the government is trying to crack down on that, she has to send it in alternative ways.

Does Venezuela's recession make it ripe for the picking?

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