Obtaining Bank Financing For Property Purchase Overseas

Can A Foreigner Finance The Purchase Of Real Estate Overseas?

March 14, 2014, Panama City, Panama:Options for non-resident foreigners to borrow for the purchase of real estate overseas are limited in the current market climate.

Dear Live and Invest Overseas Reader,

Yesterday afternoon I participated in our “How To Buy And Profit From Real Estate Overseas” webinar. For the hour-long conversation, Kathleen Peddicord, Real Estate Marketing Director James Archer, and I welcomed three special guests representing key markets of interest right now—Panama, Brazil, and Argentina/Paraguay/Uruguay.

The agenda for our discussion was broad. We talked about the main benefits of investing in real estate overseas, as well as the pitfalls and risks. We talked about how you get started investing in real estate overseas if you’ve never done it before. And we focused on some key current opportunities (this with the help of our special guests).

We also fielded questions. Unfortunately, we ran out of time before we were able to address all of the questions raised by participants in the event. One that we received from a number of listeners on the line but weren’t able to speak to before our hour ran out had to do with financing.

Specifically: Can a foreigner get financing for a property purchase in another country?

Like so many questions to do with buying real estate overseas, the answer is that it depends—first on the country. If you’re looking to buy in a country where it’s possible for foreigners to borrow for the purchase of property, then it also depends—this time on whether you can meet the local requirements for lending.

Often, in countries where formal lending for the purchase of real estate is available, banks treat resident foreigners the same as resident citizens. If you’re living and working in a country legally, banks likely will consider you a “local” for the purposes of lending money to you as long as you have a job with a local company and can show formal paystubs.

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How Buying Real Estate Overseas Can Reinvent Your Life...

An Investment, An Adventure, A Long-Term Retirement Plan

March 13, 2014, Istria, Croatia: A real estate investment overseas can bring adventure to your life immediately and develop into your retirement plan.

Dear Live and Invest Overseas Reader,

"But haven't we done this already? Haven't we already bought an old stone house surrounded by mud? Isn't that what we just did in Ireland? Why do you guys want to do this again?"

In 2004, my husband Lief and I spent a week touring around the Istrian Peninsula of Croatia with our kids. It was a family holiday that, as has become typical for us, we were combining with a property scouting expedition, this one with a focused agenda. We were in the market for one of the old white stone houses you find across this region of this country. To that end, Kaitlin, 15, Jackson, 5, Lief, and I, in one car, followed our property agent, in her own car, from one stone farmhouse to another, up and down the narrow winding roads of these mountainsides, through the medieval villages, and past the ever-present fields of olive trees, grape vines, and sunflowers.

We had recently made our move, at the time, from Ireland to France, and, one rainy morning of that Istrian family adventure, standing in one more muddy Istrian farmyard, Kaitlin made the observation I share above, reminding us all of our still fresh experiences as Irish property owners.

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How To Vet A Property Developer Overseas

10 Questions To Ask Before Investing With A Developer Overseas

March 12, 2014, Medellin, Colombia: Here are 10 questions to ask before investing with a property developer in a foreign market. Dear Live and Invest Overseas Reader,

Investing in a piece of foreign real estate can be a rewarding and even profitable part of a retirement move overseas. For most retirees, the easiest and safest way to take the overseas property plunge is buying into a development. Typically, developers in markets appealing to foreign retirees build to the standards those foreign retirees want and expect, speak English, and sometimes even offer developer financing.

But buying from a developer in a foreign country is not without its risks. How can you be sure you’re working with an honest, reliable developer who is representing his project fairly? Remember that overseas developers are often not subject to the same regulations and oversight as developers are in the United States, meaning you don’t have the built-in protections that you’re accustomed to.

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Recovering Property Market In Ireland

A Home In Ireland Could Subsidize Your Retirement

March 11, 2014, Dublin, Ireland: The recovering property market in Ireland creates opportunity for both the retiree and the global property investor.

Dear Live and Invest Overseas Reader,

Ireland left the IMF/EU bailout program in December 2013, becoming the first of the European bailout nations to recover its financial independence. In the same month, unemployment dropped to a three-and-a-half-year low of 12.4%, close to the EU average of 12.1% and down from a February 2012 peak of 15.1%. Meanwhile, Bank of America Merrill Lynch is predicting that the Irish economy will grow by 1.9% in 2014, which is the most optimistic growth prediction for any country in the Eurozone.

After a catastrophic collapse, Ireland is emerging as a leading light in Europe's economy...and real estate values are moving up. In fact, property values in some parts of the country have been increasing by double-digit rates for the past two years. House prices in Dublin rose by 15.7% last year according to the latest figures from the country's Central Statistics Office (CSO), and some current values are appreciating faster than they did during the real estate-driven Celtic Tiger boom period. Overall, values for residential property countrywide increased by 6.4% in 2013.

However, while Ireland is seeing boom-era growth rates, prices in many parts of the country remain at crash-era lows. Outside the capital, it is still possible to find properties with price tags that are half what they were during the boom.

To put this into perspective for the would-be retiree, Ireland’s real estate market is priced today where it was about 15 years ago, presenting the opportunity to invest in an Irish home of your own at pre-Celtic Tiger pricing. The best case would be a cottage or country house purchased as your eventual retirement residence that you could rent out between now and your eventual retirement. The ongoing recovery in this country means its rental markets are more active and more profitable than they have been in two decades.

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The Key To Buying Real Estate Overseas Is A Good Attorney

What We Global Property Buyers Can Learn From
Mr. Blandings

March 10, 2014, Panama City, Panama: The key to success buying real estate overseas is a good attorney and cool-headed due diligence.

Dear Live and Invest Overseas Reader,

Many people think buying property in another country is a risk-filled quagmire that is too complicated to overcome. Certainly buying property in a location you’re not familiar with requires due diligence and research, but that’s true whether you’re living in Chicago and want to buy a lake house in Wisconsin or living in Chicago and want to buy a beach house in Honduras. The same “foreign” effects can come into play.

A good example of all that can go wrong going wrong when buying real estate in a foreign place is the 1948 movie “Mr. Blandings Builds His Dream House,” which follows a New York City ad executive who’s fed up with apartment living and so searches for, buys, and then renovates a farmhouse in Connecticut.

One critical mistake Mr. Blandings makes early on is not consulting with his attorney, who also happens to be his best friend, regarding the purchase terms and contract. The price that Mr. Blandings agrees to pay for his land is multiples of even the “top-gouge price for city slickers,” as his attorney-friend explains to him too late.

In addition, Mr. Blandings’ attorney notices a note on the back of the title that explains that the amount of land indicated for sale may have been “optimistic”…and that the parcel likely will survey out to include 30% fewer acres than advertised, “more or less.”

The bulk of the movie follows the renovations to the house…well, the aborted renovations. Mr. Blandings and his wife quickly decide the old farmhouse has to be torn down and a new house built. The movie is a must-see for anyone thinking about renovating…the original “money pit” story.

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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