All Forum Posts by: Felipe R.

Please post actual responses rather than single sentences that make assumptions.

Real estate has cash flow. Stocks tend to retain their earnings. In USA, stocks outperformed real estate over the last 100+ years, before taxes, but across different countries, it tends to be mixed.

How well do stocks and real estate complement each other?

Stocks are amazing tax wise and have performed neck to neck with real estate (excluding taxes) in many countries due to the nature of business but they tend to have low cash flow and the volatility can lead to one needing cash right when the market is down. Real Estate tends to be extremely focused and thus, high risk due to being confined to a single neighborhood with a relatively high amount of capital but it cash flows better than anything else. This cash flow provides food when stocks are down or up.

The standard mantra in finance is to hold stocks and bonds but stocks and real estates seems wiser. You can diversify into other countries and land rights often have strong rights because they affect all classes and thus, all classes want to defend their home or farm rights.

Do you know anything about this asset mix relative to stocks and bonds? It's more diversified, cash flows better, and real estate cash flow can be more stable than the constantly changing cash flow from bonds.

So leverage is the only thing that makes real estate attractive? 10% cash on cash is asking too much of real estate. 

An inflation adjusted 6% is okay but I was really hoping for 10%. Including the inflation adjusted increase of principle, it may well be 9-10% total.

I've been reading a lot lately about investing in real estate. I'm considering transitioning the bond allocation in my portfolio to real estate if I can get a 10% net return on my investment.

My big concern is that I charge a percentage of the value as rent, I hear 1% is solid in a good area. At 50% expenses, I'd keep just 6%.

Learning this whole field of real estate for a 6% return seems ridiculous when you could get better returns via a basic stock index. For lifestyle or flipping as a job, I get it. I personally would love to have my own solid home base so even if I dont invest, I'll still have it as part of my allocation.

But really, why do you invest when the returns are so low? 12% net sounds great but to focus so much of my net worth into a single location seems foolish compared to buying stock that is diversified across many products, continents, and laws. Real estate investing also requires more input of time and energy. Leverage is the only situation in which this makes sense but again, you can leverage stocks quite easily and cheaply.

Thank you Anthony. I'm really excited to finally get some cash flow focused assets in my portfolio. I've been reading every day in my spare time to understand the process of what I'm getting into.

Hello,

I am new to the forum but have done well with stock investing and I am now getting ready to diversify into international real estate. I've deemed Colombia where I want to invest as it has great cash on cash returns and even offers a path to citizenship with about 170k invested. I plan to live in Latin America indefinitely starting in 2 months (April) and that may be largely in Colombia. I care solely for passive rental income with this part of my portfolio but I am happy to learn to remodel with a hired crew and architect if it signifcantly increases passive income returns.

How to Get Started:

I need to be on the ground walking looking for for sale signs as I take a trip through Bogota, Cali, Medellin, and Santa Marta. I look at how well kept the landscape, garage space, elevator, and walkways on the path to the home are; I look for quality neighborhoods. Once I see a good sign, I contact the property owner to see the property and calculate the projected rent, remodel cost, hoa fees, taxes, and cost/sqm. Then, chill there for an hour or 2 to see the vibe of the area around the sign.

I make analyses of at least 10 properties for the best returns in the best areas. Properties sell slow here so travel all 4 cities with a good spreadsheet and pictures of the best spots. Once I make a choice, I get a lawyer to make sure the property has a clear title and that it is eligible for the residence visa. I buy in the city center, in a pleasant area for >1% r/v and <1000 dollars per square meter. I then apply for my resident visa as I update the kitchen, baths, floors, and paint with an architect and construction team. Finally, I hire a solid property manager to handle the place and pay them, maintaince, HOA fees, and property taxes while keeping the surplus.

As I travel, I will see if any of the cities feel like home. My gut tells me I'll stay in Medellin or Santa Marta long term and I'll buy a personal home there after a few months if it truly calls my heart. I can even rent out my home for a few months when I travel elsewhere.

I know there's lots of ways for me to get screwed so I must find and build a great team. My biggest challenge is how do I find a quality architect/ renovation team, lawyer, and real estate agent in this process?

It feels exciting because it's so new and such a big decision.I know to take it one step at a time and get there but I need a clear plan to work on once I'm there.

Thank you for your help. I appreciate all the wisdom and if anybody has done anything similar to what I'm seeking, I'd love your input.