Global Real Estate Investing Primer Part II
How To Buy Real Estate Overseas, Part II
Sept. 17, 2009
Panama City, Panama
PLUS:
- La Rentree Effect--Creating Bargain Opportunities In The Other South Of France...
- Moving To Cuenca With Kids...
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The Buyer's Market Of Our Lifetime
Sellers and developers worldwide are more willing than they've been in two decades to negotiate terms of purchase with you. No money down. No interest. Offer to lease. Offer to take over existing financing. Payments over time...
Whether you're looking to speculate, to invest for long-term gain, or to take advantage of the current climate to purchase the retirement or second home overseas you've been dreaming of, now is the time to act.
Over two-and-a-half days next month in Panama City, resident global real estate investing expert Lief Simon and the 12 successful international real estate investing pros he's invited to join him will show you where and how. Lief and his team are standing by to provide the from-the-scenes intelligence, the judgment, the know-how, and the support you need to participate in what could well be the buyer's market of our lifetime.
More Details Here
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Dear Live and Invest Overseas Reader,
"Once you understand why you're interested in buying a piece of real estate in another country," writes resident global real estate investing expert Lief Simon, picking up where he left off yesterday, "and where you want to own, you're ready to launch your overseas property search.
"Here are the key things to keep in mind as you consider opportunities:
- The real estate agents you encounter may not be licensed, and they may have next-to-no relevant experience (maybe they were travel agents or mechanical engineers in previous lives)...
- The real estate agent you decide to work with probably won't really be working for you. In emerging and unregulated markets (like the ones I direct you to regularly), the property agents don't work for the buyer, and they don't work for the seller. They work for the commission, which they want to be a big as possible...
- This can lead to something called "net commissions," whereby the seller tells the real estate agent what he wants to net from the sale. The agent sells for whatever he can sell for. Then the agent pockets the difference (which can be substantial, as much as 20%, 30%, 40% or more)...
- Likewise, in the markets where I direct you, you'll find no multiple listing service and no tradition of shared listings...
- Don't take clean title for granted. Invest in title insurance where it's available. I recommend First American Title Insurance, www.firstam.com...
- In particular, be careful about purchasing ejido land, cooperative land, or rights of possession property...
- Don't take the seller (be he local or gringo) at his word. Maybe he owns the land he's offering to sell you, maybe he doesn't...maybe the right-of-way through the neighbor's property has been agreed in writing, maybe it hasn't...maybe the boundaries are drawn where he says they are, and maybe they're not... You want to verify all important points of fact with the help of your own independent attorney...
- Which means that you need to: Engage your own independent attorney. Don't use the seller's attorney and don't use the developer's attorney...
- Buy what you see. If electrical lines have been run to the property, then you're buying with electricity. If a clubhouse has been built, then you're buying into a community with a clubhouse. If you don't see a marina, don't count on a marina...even if it's promised and pictured in all the developer's materials...
- Research restrictions related to foreign ownership of property, particularly in Asian markets...
- If you're buying on the water, understand restrictions on ownership of beachfront property. In most countries, you cannot own the stretch where the water actually meets the land. This strip is called different things in different markets, and it's measured in different ways (typically working from the high-tide line). My point is, don't believe someone who tells you that you can "own" it, because, in most cases, you can't. It's owned by the state...
- Understand all costs of acquisition. These can go well beyond the agent fees. Remember transfer taxes (sometimes called "stamp duty"), titling fees, registration fees, attorney or notary fees, etc. These fees are not all relevant in all markets, but you want to understand, up front, which ones you'll be responsible for paying and include those costs in your purchase budget and your projections for investment return...
- Think through what will be required to accomplish whatever you are hoping to accomplish with the property you're looking to buy. If you intend to rent it out when you're not in residence, you'll need rental and property management. If you intend to be in residence only part of the year but don't want to rent while you're away, you'll need a full-time caretaker on-site. Again, include these costs in your budgeting and your ROI projections...
Kathleen Peddicord
P.S. Lief Simon and the 12 fellow global real estate pros from around the world he has invited to join him in Panama City next month will continue this conversation in depth during Lief's Third Annual Global Real Estate Profits Summit.
You'll have a chance at that event to speak with Lief and his team personally regarding your own global property investment plans.
Go here now for full details of what Lief has planned and to register online. Or contact Conference Director Sofia Hogan with your questions (be sure to ask about any discounts you may be eligible for), by e-mail at Events@LiveandInvestOverseas.com or by phone at 1-888-627-8834 (from outside of the U.S. dial
+1-443-599-1221).
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Good Wine, Grand Adventure,
And A 17.24% Annual Yield
Great wines, great times, great adventures...all the fun of a vintner's lifestyle without any of the work...plus the added incentive of a 17.24% annual yield!
This is my favorite kind of opportunity. It combines an interesting investment with a chance for a grand adventure in one of the world's most inviting places to spend time.
And, for a limited time, Live and Invest Overseas readers can participate with 12 monthly payments, interest-free.
Full details here.
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"Further to my note on La Rentree earlier in the week," writes France Correspondent Lucy Culpepper, "I'd like to draw readers' attention to another property website/agency based in St. Chinian, about 6 miles from Cessenon: www.frenchhouselanguedoc.com/exgb1.htm.
"The owner, Philippe Godia, helped my family to find and purchase property in the Languedoc. He is very knowledgeable about the area and speaks English--not perfectly, as you will see when you read some of the translations on his website, but certainly well enough for non-French-speakers to be able to converse with him. Philippe's website isn't pretty but don't let that put you off. It's the man behind the scenes that matters.
"Philippe has just sent me an e-mail to let me know that he has new properties listed in Cessenon and the villages nearby--thanks to The La Rentree Effect I wrote about in my previous note! Along with Cessenon, I would recommend that readers include the villages of St. Chinian, Roquebrun, and Berlou in their searches, as well as the hamlet of Pierrerue. Philippe has a few properties in St. Pons. The scenery here is stunning, but it's just a little too far into the mountains for me; the winters can be harsh.
"The most unusual listing Philippe has listed now is a three-floor, one-room-wide, ancient stone townhouse that needs renovating. The price is US$42,700 at today's exchange rate, including the agency fees!"
"Could you please tell me about the education system for children in Cuenca, Ecuador? Are there private schools where the language of education is English? What is the cost of tuition at these schools? Are the certificates internationally recognized? What about the hospitals, private and public? The cost of construction? The crime situation? Attitudes toward foreigners?"
-- Derek K., United States
Ecuador Correspondent David Morrill replies:
"The public hospitals in Ecuador are sub-standard, in my opinion, and I'd use them only for an emergency. The private hospitals and private physician/dental care, on the other hand, are first-rate. Mount Sinai hospital is one of the top three in the city. A specialist here charges US$25 for an extended visit (30 to 45 minutes of face time with the doctor). The other two hospitals favored by expats are Santa Inez and the new University Hospital, which is partnered with the University of Boston medical school. Two friends have had major surgery here in Cuenca in the past year, and the results have been very good in both cases. The doctors paid personal visits to them at home, and the final bills were about 10% what they would have been for the same services in the United States.
"I expected to be somewhat of an outsider moving here, but, instead, have been given deferential treatment by most officials and welcomed openly by the local citizens.
"I can't recommend the public schools in Cuenca, but there are several good private ones. Most foreign residents put their kids in the multi- and bi-lingual schools and seem happy with the results. These teach some courses in English. The most popular is probably Colegio Aleman Stiehle, which prepares students for college in Europe and North America. Stiehle has international certification, but I don't know by which authority. Tuition runs US$150 to US$200 a month.
"Construction costs are low, about US$30 to US$50 a square foot. The rate of serious crime is also low (less than 20% of the per-capita rate of a comparable U.S. city), but petty and property crime are problems. You have to watch out for your stuff, particularly in the tourist areas of the historic district. In five-plus years here, I've never had a problem, but lots of my friends have lost bags and jackets." |
