Feb. 19, 2010
Panama City, Panama
PLUS:
- "How Much Capital Do I Need To Get Started As A Global Property Investor?"...
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Dear Live and Invest Overseas Reader,
In the current global climate,
real estate foreclosures are a big opportunity. Literally hundreds of thousands of foreclosure buying opportunities exist in the United States right now, but other countries where mortgage lending has been available offer opportunities as well. These aren't as widely circulated, meaning you have to work a little harder to find them. This also means, though, that you generally don't have as much competition at bid.
Bank sales of foreclosed properties aren't as organized in most other countries as they are in the States. Uruguay is one exception; regular auctions are held by the government bank in this country, at the bank, with generally more than one auction room going at the same time.
I've investigated bank foreclosure opportunities in a number of countries over the years but have generally refrained from investing because these properties usually require considerable further investment in renovations or repairs. This is on top of the time and work required for what is typically a small investment. For these reasons, although returns in percentage terms can be extremely high, the absolute returns don't get me excited at this point of my investing career.
On the other hand, foreclosure properties can be a great way for a starting-out investor to get his feet wet without putting a large amount of capital at risk. Here's a particular current opportunity that I'd say is worth your attention, particularly in that context.
I received an announcement this week from a bank I deal with in Belize that is trying to liquidate some of their foreclosed properties. The bank lends throughout Central America, but all of the foreclosed properties they have available for bid right now are in Belize and Nicaragua.
Most of the available properties fall into the speculation category, but one house on the island of Ambergris Caye, off the mainland cost of Belize, caught my attention as an exception. The house has a quoted list value of US$1.3 million. The bank indicates it would accept a minimum bid of US$244,000. The five-bedroom house sits on 4 acres with direct beach access to a sand beach in a small community of eight other houses. You'd have the potential for rental income straightaway as the property appears to be in good repair. Plus, of course, this is a place you could use yourself.
Otherwise, most current offerings are land, including lots in a Nicaragua development where you could pick up most of the parcels for 50% of the list value. The minimum bid on some lots is as little as US$23,163.
Here's the kicker: The bank behind these foreclosure sales will lend on these properties to the successful bidder, up to 50% of the successful bid. That means you could potentially buy one of those Nicaragua lots for as little as US$12,000 down and arrange financing for the other US$12,000.
If you are interested in more details on any of these properties or in finding out more about future foreclosure auction opportunities through this bank,
you can get in touch here.
Lief Simon
P.S. I'll be following up on these opportunities in more detail for members of my new
Global Property Investor's Marketwatch service, after further due diligence, including details on the bidding process.
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"Lief, what kind of money would one need to be able to act on the opportunities you'll be presenting in your new
Marketwatch service? I'm interested in building a property investment portfolio but worried I don't have enough capital to invest in the deals you'll bring to the table."
-- George S., United States
Lief replies:
"I'll be scouting and reporting on opportunities for all investment budgets, from the kinds of foreclosure buys I report on here today (that can be bought for as little as US$12,000 down) and other foreclosure opportunities I'm investigating right now (with a minimum bid in some cases of about US$10,000) to land-for-development deals that could require hundreds of thousands of dollars of capitalization. These present opportunities for pooling resources with fellow investors.
"I'll pay special attention to opportunities for leverage. These can translate to modest capital requirements up front and monthly payments that can sometimes be covered through rental income, even immediately from the month of purchase. An opportunity that fits this description landed on my desk today. I'm researching this now for an alert to my
Marketwatch members."
