All Forum Posts by: Mike Lambert

I'm investing internationally because it can be much more profitable than investing in the US or Canada. That's not the case everywhere and as far as I know properties in Dublin are horrendously expensive. The time to invest there was 2011 when there were bargains were to be had as a result of the global financial crisis. Certain things are the same and certain things are different compared with the US. As far as I know, the multifamily game that everyone is playing in the US (buy, renovate and increase the rents and refinance) doesn't work in Europe but don't take my word for it and check for yourself.

@Curtis Chen

I live in Montreal and, even though valuations here are no where near as in CA, I realized a long time ago that investing overseas in places like Mexico, the Dominican Republic, Costa Rica, Panama, Colombia, Brazil, Spain or Portugal and that's what I'm doing. You're on the right track with that I think.

@Cameron Riley

I used to be a banker. Now full time real estate investor. I invest in those faraway places because it is much more profitable than what I can get at home or closer. Let me add to this that having to visit these nice places regularly is a plus.

I live in Montreal, Canada. So far it was Playa del Carmen / Tulum in Mexico 1884 - 1920 miles away. I thought I'd beat that with the deal I'm working on in Las Terrenas, Dominican Republic but it's "only" 1827 miles away.

@Lance Bloggs

Premium properties in touristic areas, the type which we're buying and most foreign investors buy are traded in dollars, not in pesos. Since they are in short term rentals, the income is in dollars too. They only thing in pesos are some of the costs. So, if the peso depreciates further, it's a positive. If the peso appreciates, the costs are so low compared to the revenue that it doesn't matter. So no FX issues for Americans.

As to the tax returns, it's not that complicated to file in two countries. We're on BiggerPockets here. Are we going to stop at that kind of complication? :) As Canadians, we are also taxed on our worldwide income. So we have to file in Mexico and then we deduct what we pay courtesy of the treaty for avoidance of double taxation. So we end up paying the same as if the property was in Canada and it will be the same for you because taxes are much lower in Mexico.

@Matt Ayoub

The security situation is not that bad, especially for foreigners. Did you know that the Institute for Economics & Peace recently ranked countries by order of safety. The United States came out at number 114, right behind Rwanda! Granted, Mexico is lower. But did you know that the murder rate in NYC and LA is higher than in Cancun? Do you not invest in NYC or LA because of crime? I don't think so. You just avoid certain areas. Same in Mexico. If you don't look for trouble, you won't get it. I guarantee you you have more chances being shot by somebody mentally ill doing your groceries anywhere in the US than being shot by a narco doing your groceries in downtown Playa del Carmen. In spite of the media attention on the way too many murders in Mexico, tourists keep coming in ever bigger numbers because they're almost never affected.

I'm happy to let you know about these units with great financials. Talking about what I do (international real estate investing) is my passion. So feel free to send me a private message if you have specific or other questions. 

Of course I agree, investing overseas, in Mexico or elsewhere, demands specialized knowledge and connections. If you don't have them no worries. Investors invest with me so that they don't need to have or acquire those themselves as I can share mine with them. And you know the irony is that, even though I'm doing the heavy lifting for them, they end up making more money and taking less risks than if they were investing by themselves.

@Jennifer Velez @Michael Baum @Matt Ayoub

Yes, investing in real estate in Mexico can be very lucrative. I've been investing over the last two years in the Riviera Maya with investors. The area has been booming and we have been buying pre-construction condos over the last two years at wholesale prices with financing from the developer. But even if you can't do that, I know people who have bought condos there for less than 200 k and they make more than 60 k, while still using the condos themselves for part of the year. I have access to similar deals in Los Cabos as well but haven't pulled the trigger yet since they have a lower return, being more expensive.

While Matt's return is nice, this is almost 3 times more! Generally speaking, the more expensive the property, the lower the return. If I invest in Mexico, I want to get returns higher than I can get at home or I don't see the point. Unless, of course, I just want to own a nice house that I can use and rent it to cover my costs or make a small profit.

@Account Closed

Yes Mexico is a great place to invest! The issues are not as bad as your post seem to suggest but you're right you have to know what you're doing or know something who does.

Yes Las Terrenas has plenty of potential and that's where we're investing and it's earlier on. However, like everywhere else, it's does who are early who will make most of the money. Through direct personal connections I know that Luxury Retreats, the luxury division of Airbnb is about to open the Las Terrenas market. Knowing that the area is supported by dollars for the government and the biggest short-term rental company in the world, the risk/reward for going in now is perfect. But I don't want to convince anyone here since I want the price to stay low until I'm fully invested :)

For the taxes, there is a 3% transfer tax upon purchase. The annual property tax is 1% but it is charge only on the value of the property above $144,000. If the project you're buying into has been approved under the a special law designed to encourage foreign investment, the transfer tax will be waived and the property tax will be waived for 15 years. The tax rate for both income and capital gains will be between 0% and 25%, depending on the amount. However, if you reside overseas your income, the tax will be withheld at a rate of 27% flat (it's only 18% for us Canadians).

@James Knecht  This makes total sense! I'm currently arranging deals to invest with investors in Las Terrenas. While I'm doing that because I have the necessary connections and access to special deals, the Dominican Republic is an awesome place to invest in real estate for anyone and the returns can be much higher than Miami. More and more Americans tourists visit the country as its 8 international airports have direct flights to cities like New York, Atlanta or Miami. If you invest in the Dominican Republic, it's better that you have the right contacts and know what you do or that you know people who do.

We're about to invest in the Samana province. Arguably, it's the most beautiful part of the country and it has more potential than Punta Cana, as it is much earlier in terms of development stage. Punta Cana represents two thirds of the tourism in the country and is already very developed. The Dominican government has been awesome at promoting Punta Cana. I know they are going to push more the other destinations going forward. When I was visiting the Ministry of Tourism a few weeks ago, one of my inside contacts told me "you can make more money investing in other parts of the country".

Many people go to Punta Cana for the all-inclusive experience so you have a competitive disadvantage if you own and rent short-term rentals. Most of the people who dislike the all-inclusive concept and rather have their own place go to other parts of the country like the Samana peninsula. So, if you own short-term rentals there, you own what visitors want. Moreover, there aren't that many hotels there so you have much less competition from hotels there.

@Account Closed

Vidanta is a company that sells timeshares. I have nothing to do with them and I would never invest in timeshares. I you are  referring to the developer(s) I'm working with, I don't disclose them in public forums because the investors who invest with me and myself are getting special terms and the developers want to keep that confidential. While you'd pay more than I would if you were dealing with them our any developer, the alternative strategy that I outlined would still work. 

@Trudy Pachon

Different people tolerate different levels of development. I think Cancun is too much but I like Playa del Carmen and Tulum. The thing is, when a nice place gets discovered, it's hard to keep it off tourists and developers. Actually, the local governments in Playa del Carmen and Tulum have been taking action to preserve their city to a certain extent and avoid them becoming another Cancun. Playa del Carmen initially allowed only 4 floors, then permitted 5 and then went back to 4. In Tulum, it's maximum 3 so big hotel chains are de facto banned. These cities have been the fastest growing in the world and are still in the top so there inevitably are environmental issues.

What about Zipolite? I have friends who want to semi-retire there. It's supposed to be beautiful and still undeveloped.