All Forum Posts by: Sam Yin

@Sam Yin

Since when is a 5% CoC a good return? Maybe you've spent too much time in beautiful LA and need to expand your investing horizons ;0. If that's your threshold, your market will be the world or almost. By the way bear in mind that Belize represents only 0,006% of the world population so it's in no way a representation of what international investing is.

Earlier this year, I spent a few months in Mexico. Half of the people I met were from LA or other places in California. They're buying hand over fist. Similar properties than in California for a fraction of the price. Similar but better lifestyle (they say) and very low taxes.

If you want to invest internationally, you want to make money and, most importantly not lose it. What's the point of making a 5% CoC return if you lose most of your principal?

The best advice I can give you from my experience and that of other successful international investors is to stick to established market. Follow the path of progress. Go where the money is going, the airlines are going, the hotels and resorts are being built, infrastructure like airports or highways are being built, where the government follows foreigner- and visitor-, and investor-friendly policies, where they have money to spend on infrastructure and marketing to get the people to come. That's the real tried and true strategy. But beware of avoiding places that are already overpriced (see my Costa Rica comment above).

If you try to find the next destination and invest there before anyone else, it's like playing the lottery. You might hit the jackpot but, most of the time, you'll lose your shirt.

The best example of this is Nicaragua. As Costa Rica had already become way too expensive for what it is, Nicaragua has been promoted over the last 30 years as being the next Costa Rica by people who, incidentally (or not) are promoting Belize these days. I know one investor who fell for that dream and bought himself a beautiful beachfront property there for $800k. I have to say that even I thought at the time that it was the deal of the century. Guess what. He sold 10 years later for $200k I believe and it was very difficult as the market is very illiquid no progress. What a horrible investment! By the way, even if you double your money but it takes 50 years, that's a horrible investment too, which will set up backwards because of inflation.

Fast forward to today and, sadly, while Nicaragua would have the potential to be the next Costa Rica, it has made little progress towards that over the last decades and it could even be argued that it's gone backwards. People familiar with the situation will probably tell you that nothing much is going to happen there anytime soon.

Whether investing in LA, anywhere in the US or abroad, it's all about figures. How much you invest and how much you make (or lose). Time is money. Maybe you can spare the time that you'd do a lot of initial research on Belize by getting yourself an Airdna subscription. That'll tell you how much gross revenue you could make. Check that against the local property prices. I don't know what the result will be but I wouldn't be surprised if you don't like it. If that's the case, don't conclude too hastily that you should stick to LA as there are other place that will give you much higher figures across the world.

You could also ask your fellow successful Californians (not sure how you call the LA residents) where they invest overseas when they do. My best best is that Mexico will come ahead and the rest will be some Southern European countries. Those happen to be the places where I have successfully invested overseas and maybe it's no coincidence since a large part of my closest family lives inn LA. :-)

Hope this makes sense.

@Sam Yin

Let’s say you buy a great ocean front property for $1.5mm in Belize.  Think you do MFH, but same discussion.  

Say you rent for $3,000 per week for 20 weeks.  Let’s say net cash flow is $50,000.  About a 3% return with a full cash deal.  Forget interest rate or lost opportunity income.

Believe you’re in LA.  I would rather take $500,000 down and $1.5mm loan at 7% and make $4mm capital gain in two years before taxes.    You can decide if you want to 1031.  Got to love that LA market.

See if your kids can get a GoPro for under water.  Nahuel will get 20 sharks surrounding them.  

Hopefully get you on a sea turtle and manatee.  If you like spearfishing hire Nahuel.  If you do a golf cart tour with Nahuel make sure you understand both the sewer and water systems for the island.

Watch Will Mitchell YouTube’s on Belize.  Yea he is selling but gives you a good approach to looking at countries.  During Covid shutdown I would say 1/2 of all properties were for sale.  No rental income.  

If you need a buyers agent use John Acott in San Ignacio.  He has lived there for over 30 years.  He is British and gets things done and dots his I’s and crosses his T’s.  Tell him I recommended him.  If you want to talk with a US builder down there I can hook you up.   He won’t do your deal along the coast.   He does Cayo district.  But with no skin in the game he would be a good one to talk with.  
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Take the family cave tubing. 
If you want to do a Mayan ruin let me know ahead of time.  Do the tour in the morning at Caracol.  Take a picnic basket with food and drink.  Stop on the way back at Rio On falls.  Family will love the falls.  Then take them to Blacaneaux for dinner just down the road.  Francis Coppola hotel.  
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You can’t do everything. Just pick an area.      

Quote from @Sam Yin:

Quote from @Henry Clark:

So let’s do a deal.

Right now in the US I’m looking at 160 acres for sale.  Would use this to make country subdivisions.  This is too big for our market so will need to hold part as farmland or sale part immediately.   I know the banks I would go to.  

Downpayment amount 35% for agriculture and approximate interest rate 7%.  Have my team.  Realtor, lawyer, surveyor, banker, title company, excavation, know where the flood high schools are, electric and fiber costs, cell reception, etc.  

Now let’s do this in a foreign country.

1.  If I resale a portion the commission rate is 10%.

2.  If I buy there is no Title company or title insurance.  You have to give the money to their lawyer, their realtor or to them.  When you sign the purchase agreement.  Might take a year for the title to get recorded.  Until then you can’t build.  Or you can build.  They don’t keep computer records.  So when you ask how your title is coming you have to find the person whose desk it is on.  Hopefully they aren’t out, because they don’t cross cover for each other.

3.  Can’t read Spanish, French or Tongan.   So have to get translated.

4. Have to go all cash since no US bank will finance out of their jurisdiction. Or go local and pay either 50 % down with 12% interest on a 10 year note; or different country 15% down at 3% on a 30 year note. REI is about leverage. If you pay 100% cash then no leverage. Not as good a deal.

5.  May have to pay up to 10% in transaction fees to the government on top of the purchase price.

6. Have to build a team.  In a country with a minimum wage rate of $2.50 people get pushed to the honest or dishonest side really quickly.  Your tools may represent several weeks of pay this they may walk off.

7.  They work 6 days a week.  You pay on Saturday otherwise they won’t show up after Friday.
 
8.  You pay in cash.   It’s a cash economy.  So every Friday you go to the bank to get your payroll.  The person in front of you is taking 20 minutes.  They are having the teller make separate envelops for each worker.   Also they are doing banking for each worker if they want so much deposited into their accounts.

9.  So forth.   Now I actually like this.   Because I like learning.   But I like making money more.  So it can’t be a similar investment to the US or it won’t pan out.   All of us learned by paying for our mistakes.  Same for investing overseas.

Even with all of the new things to consider I would invest overseas. 

On a different post @Mike Lambert I believed mentioned Uruguay.  About 240 countries in the world and that is one of the last countries I would have thought of. I looked at it.   Can you imagine living in Europe but in South America?  There are many different overseas options out there.

It’s your Money, Your Always Right, Even When Your Wrong.  

Go for it, if you’re at that point.  Don’t come to Belize though.  Want to keep it a Buyers market.  

 Henry,

I hate to say this... but I'm coming to Belize.  My wife like the Blue Hole. My buddy has a few acres on the beach with a few ABNB. He also had a few Chinese restaurants and Liquor stores. He is from Belize and worked for me, that's how I found out about Belize. I promoted him at work after everyone else passed him up. I knew he was a quality person. He is an investor and a smart one at that. He bought and built next to the Sofi stadium and he is doing well.

I will probably buy a few things here and there in Belize. Not a plantation,  but some businesses. I'll be flying out there for spring break. May be I'll run into you, if my wife doesn't make me dive that blue hole or go to Cuba.

 If you go to San Pedro on Ambergris Caye google Nahuel Ayala.   Under da seas adventures. Ask ahead of time if he will give you my free trip for 4.  He owes me if he hasn’t forgotten.  Do the all day snorkel extravaganza. We both dove and snorkeled.  This will be the highlight of your trip.

Blue hole. We went.  They split you up based on if you want to surface dive 40 feet or do the deep wall dive.  We chose to do the surface dive.  Would only do the Blue Hole if it is a bucket list item.      
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If you’re in San Pedro go to Carambas for dinner.  Have fresh fish or rock crab claws.  One evening go early for dinner and entertainment at the TruckStop.  Even the kids will like it.  Hopefully they are doing family feud or name that song.  

If you go to Placencia.  Gelato at tutti fruitti.  Best outside of Italy.  They are from Italy.  
 Forget the name.  Tallest hotel in town 4 stories.  Go before sunset and have drinks on the veranda side.  Make a reservation for dinner inside.  If you’re wanting to cook go to the end of the peninsula around 3 when the fishing boats come in.  Don’t be bashful or the fish will be gone.  Jump in and grab your fish.

I’m San Pedro rent a golf cart and pay Nahuel to tour you around the island.   He grew up there and you can talk with him.  He has no skin in the game.   

Both locations tell two Realtors what you are looking for.   They will take you to 3 or 4 houses or condos.   Don’t buy.  But this is an easy way to see what is available and at what price.     

We are in the Cayo district inland. Rivers and Mayan ruins.  You can stay at our house even if we aren’t there.  Can have or plantation manager set up whatever you want to do.  

Try to have cowfoot soup  and pigtail with peas.  I like these better than lobster or rock crab legs.  Ask his wife and her mother to cook for you.   They are great Cooks.   Just tip them.  They are professional cooks and bakers.  

Tell her way ahead to make a special cake for your trip.  See picture above.   Can be anything.  

Let me know when you plan. We go one week a month over the winter and spring.  Can show you around.  

So let’s do a deal.

Right now in the US I’m looking at 160 acres for sale.  Would use this to make country subdivisions.  This is too big for our market so will need to hold part as farmland or sale part immediately.   I know the banks I would go to.  

Downpayment amount 35% for agriculture and approximate interest rate 7%.  Have my team.  Realtor, lawyer, surveyor, banker, title company, excavation, know where the flood high schools are, electric and fiber costs, cell reception, etc.  

Now let’s do this in a foreign country.

1.  If I resale a portion the commission rate is 10%.

2.  If I buy there is no Title company or title insurance.  You have to give the money to their lawyer, their realtor or to them.  When you sign the purchase agreement.  Might take a year for the title to get recorded.  Until then you can’t build.  Or you can build.  They don’t keep computer records.  So when you ask how your title is coming you have to find the person whose desk it is on.  Hopefully they aren’t out, because they don’t cross cover for each other.

3.  Can’t read Spanish, French or Tongan.   So have to get translated.

4. Have to go all cash since no US bank will finance out of their jurisdiction. Or go local and pay either 50 % down with 12% interest on a 10 year note; or different country 15% down at 3% on a 30 year note. REI is about leverage. If you pay 100% cash then no leverage. Not as good a deal.

5.  May have to pay up to 10% in transaction fees to the government on top of the purchase price.

6. Have to build a team.  In a country with a minimum wage rate of $2.50 people get pushed to the honest or dishonest side really quickly.  Your tools may represent several weeks of pay this they may walk off.

7.  They work 6 days a week.  You pay on Saturday otherwise they won’t show up after Friday.
 
8.  You pay in cash.   It’s a cash economy.  So every Friday you go to the bank to get your payroll.  The person in front of you is taking 20 minutes.  They are having the teller make separate envelops for each worker.   Also they are doing banking for each worker if they want so much deposited into their accounts.

9.  So forth.   Now I actually like this.   Because I like learning.   But I like making money more.  So it can’t be a similar investment to the US or it won’t pan out.   All of us learned by paying for our mistakes.  Same for investing overseas.

Even with all of the new things to consider I would invest overseas. 

On a different post @Mike Lambert I believed mentioned Uruguay.  About 240 countries in the world and that is one of the last countries I would have thought of. I looked at it.   Can you imagine living in Europe but in South America?  There are many different overseas options out there.

It’s your Money, Your Always Right, Even When Your Wrong.  

Go for it, if you’re at that point.  Don’t come to Belize though.  Want to keep it a Buyers market.  

Yea this is same thing like when we said MF Class A yield has 10% IRR, it's gross IRR, in real term post tax it's more like 8% IRR. Same investment internationally may have 14% gross IRR, since there's no almost no tax, it's net , but since Dollar appreciates heavily, then the number reduces to 11%-12% net IRR.

By default, in high populated country, default cap rate in international city is way lower outside US. If typical cap rate in LA's MF is like 4.5%, think 2-3% cap in other country. Having said that, it's true that appreciation velocity may be higher in the US as home still considered cheap esp. in the south/midwest.

As summary, US is still more promising. In the whole G7 nation, US is still having the lowest home price to income ratio.

Based on my research, actually US is 20 years late in catching up with the appreciation game. While other country land price usually skyrocket since the 1990s, in US the pivot is post GFC 2010 era. So there's that for consideration as well. When we target cash-flow or appreciation, we're chasing this velocity.

I am mostly investing in South East Asia as well. So I'm not that unfamiliar with what @priti offering. One good thing is that, it's conservative money printing system, as land is few and population is much more. It's kind of set-and-forget investment, either it is land, house or STR. You don't have to do anything , no complication and buum the IRR is 12-14% with no hefty tax after selling unlike USA. The drawback is of course the dollar, which is always strengthening and cause deprecation. Also it only make sense to buy with cash only. In few areas, investment could actually yield more than 10% IRR, when the timing and business opportunity is right.

Also, when investing internationally, it is actually more important to analyze from international economy standpoint as well. For example, after  the Ukraine wars, coal price is rising sharply, this cause a lot and a lot of richer company --> increase spending in few countries because they ow the coal mining. Overnight the owner become the new tycoon in the city LOL and land price increased as well.  Globalization is complex but exciting, whatever you do here may affect someone in other side of planet. 
Now these are business opportunity, by either buying the land, buying the company stock, or buying the coal mining itself LOL