All Forum Posts by: Jackie Lange

Talk to the neighbors.  They usually know how to get in touch with the owner.    

Also, call 411 to see if he has a land line listed anywhere.

If the owner has died, you should do a title search to see if there are any liens or back taxes.  Has probate been filed?  If none of the above it could be a perfect Adverse Possession opportunity even if you have to pay back taxes.  Get with a real estate attorney in your state to know what the rules are.  They are also published in the property code for your state.

These property management fees are ridiculous.

You should contact Michael Bielon.  He does Master Leasing in that area and does not  charge any property managment fees.  Hi web site is OnTimeRents dot com

or contact DavidTilney dot com for other recommendations in that area.  David trains people to do Master Leasing and has been doing it for more than 30 years. 

PM fees are another good reason to not buy outside your own market.  Those initial fees are just the beginning.  If you need an air conditioner repaired or a roof replaced, a PM will tack on 10-20% of the cost of the repair .. just for making the phone call.  Beware of additional fees for sending you accounting every month, etc 

Someone who does master leasing does not play those games.  

Yes, I live in Boquete Panama and I own a small organic coffee farm so I know that business too.  I just finished a coffee harvest.

The ROI quoted by some companies selling coffee farm parcels in Boquete is totally unrealistic.
Buyer beware!!!!!

Reality is often completely different than what it looks like on paper.

If you have to get bank financing, it would be much better to do a 30 year amortization.  You can always make extra payments to pay off the loan in 15 years.

This will increase your cash flow

do not accept a loan with a balloon or adjustable rates.

Visit the next foreclosure auction in your town.  It will have plenty of CASH buyers looking for a great deal. 

David, you brought up some excellent points.  I do not think it is a good idea to invest in real estate in a foreign country unless you can be there often.  If you live there full time it is better.  But at the very least you need to check on things  every couple of months.

A lot of things can change very fast in foreign countries.  

Sometimes the numbers look really inviting in a foreign country ( or even a different state) because they are so much cheaper than prices in your own backyard.

But the rules of engagement are completely different in foreign countries.

Even closings can take 3 months.  

If you need to sell fast, you can forget it unless you take a deep discount.  

Cash buyers rule in foreign countries.  So, you'll need to set up a bank account in the country then pay hefty wire fees to get your money to the account ( you do not want to trust wiring the money to someone else).  You'll also need cash for repair costs.  Keep in mind that if you have $10,000 or more in a foreign bank account, you will need to report that to the IRS and the Treasury Department if you are a US citizen. (FATCA)

Getting a mortgage is not so easy I've been told.   You will need at least 20% down, it could take 2-3 months to get a mortgage, you'll pay a higher interest rate, and probably need to buy a life insurance policy naming the bank at the beneficiary. I have never gotten a mortgage so I can't speak from experience on this.

Build your buyers list first.  Know who you will flip to.  This helps to build your confidence when talking to sellers and making offers. 

Look for properties second.

George, good points.    You are right that a good lawyer is the most important factor in buying in a foreign country.  And it needs to be the lawyer YOU picked based on a lot of local recommendations, not the one the sales person recommends.  

You should not sign any agreements until your lawyer has done a title search then created the purchase contract.  If the property is not titled (ROP property), then they can't do a title search.

When a whole country is experiencing growth, like Panama, then everyone benefits. You see new construction everywhere ( not just a few select cities).  The middle class grows.  There are more homeowners.  Wages go up.  New cars are on the roads.  And crime rates go down.

When there is a big divide between the have's and the have not's, with low low wages in most of the country, then crime is a problem.  

All the research in the world cannot replace a "boots on the ground" tour of the the country you are considering investing in.  Don't just visit the nice big metro areas.  You need to get out to see more of the country to get a general feel for the country, the people, the police/military, etc.  

I've been to 26 countries and lived in 4, so I have a good comparision of what one place is like compared to another.  

As a US citizen, you do not have to report any real estate holdings overseas if you hold title in your own name.   But it is much more common to hold title in a corporation or foundation ( similar to a trust), which has to be reported to the US government.  

Some countries have rules about foreign workers coming in to do work.  A work permit is required.  So you can't just fly in your rehab crew to any country, you usually will need to hire local workers.

There is a higher ROI in many foreign markets but you need to look at much more than just ROI.

Some markets allow foreign investments without getting a visa, others do not.  Some markets add a VAT tax (in addition to capital gains tax) for foreign investors which you get hit with when you sell the property and even more tax when you try to take the proceeds out of the country.

Most importantly, is the stablity of the government and the economy.   Colombia inflation is going through the roof - currenlty at about 7.5% which is not good.  Other Latin American countries, like Panama have a much lower inflation rate of less than 1%.  Unemployment rates are another important indicator to check out before infesting in a foreign market. 

Another good indicator of stability is the average local income which you can find on WorldBank.org and the GDP per capita.  If that number is too low, there will be much more crime and break-ins to your properties.  (Colombia is about $7900)

Your ROI can be greatly increased by doing vacation rentals vs long term rentals -- if it is allowed in the market without heavy taxation.

In most of latin america, It may be cheaper to build new than to rehab old properties.  I'm building 6 rental houses in Panama at a cost of $35,000 each for a 1200sf house that will rent for $750 all inclusive. Build time is about 3-4 months for new construction.

There could be a better use or ROI for the land than building residential or commercial estate. A commercial greenhouse can product about $50,000 a year in income.

I just bought a couple of acres with plans for greenhouses.

Some other great investments.. 

20 acres Pacific Ocea front - spectacular views - only $450,000
Ocean front lot for only $15,000

Presonstruction sales are popular in latin america.  Don't even think about getting involved in this unless the builder is a local citizen and has been building for a long long time ( 20 years or more).  Avoid foreign preconstruction projects.  

It is always best to go visit the area before you jump in to any investment.  And talk to a LOT of locals before you invest any money.  You'll hear the good, the bad and the ugly. 

Beware that some property it titled and some of ROP (right of possession).  You should only buy titled property even if the numbers on ROP look extremely attractive.

In Panama, where I live, there are real estate scams all the time. The investor seller (usually US or Canadian) usually moves out in the middle of the night after he has carefully wires all investment capital to a different offshore bank account... and leaving the investor buyers high and dry.

Not much you can do legally when you have been taken advantage of in a foreign country.  Most latin American countries do not have contingent fee attorneys so you will need to pay a lot of money up front to even start an investigation which could last for many years..with no resolve. 

So, buyer beware in foreign countries. 

But there are some incredible opportunites if you check them out personally before you buy and always use your own attorney to investigate the title and prepare the purchase contact for you.