The plantation's manager is a fourth-generation farmer in Panama with experience not only growing mangos but also selling them. He has long-standing relationships in place with juice companies in Panama, which are standing by to purchase as many mangos as he can produce. Right now, the majority of juice companies in this country are forced to import their mangos, which is far more costly than buying locally. In addition, the developer is in contact with groups in the United States, from dried fruit wholesalers to grocery stores, lining up contracts for selling the plantation's mangos directly into the U.S. marketplace, where they would be worth much more than the local Panama juice companies are paying. (Note that current projections for return for this investment are based on the price the mangos are currently being sold for in Panama, meaning that, again, the projections are conservative.) Phase one of the plantation has been sold out. Phase two is selling at a rapid rate, and implementation is well under way. Thus, again, the planned price increase. I have asked the developer, however, if Live and Invest Overseas readers could have one final chance to get in on this opportunity at the original phase one launch price of US$33,500. He has agreed and will honor that price for LIOS readers for the next two weeks. Thereafter, the price permanently increases to US$36,500. You can request more information here.
"Kathleen, if I rent an apartment in a foreign country, specifically in Central America, do I have to get preapproved and a credit check?" --Joseph B., United States If you're renting short-term, you leave a deposit and pay the rent up front. No credit check or other documentation is required in most cases, as the presumption is that you are a tourist and will leave the country without hassle (that is, the owner doesn't have to worry that you might refuse to vacate the property when the time comes). If you're renting long-term, it depends on where in the world you're renting. The requirements are generally more lax in Latin America than in Europe. In France, even for a grey-market apartment rental (meaning a rental that doesn't go through a rental agency…those rentals require a stack of documents thicker than your combined tax returns for the last 10 years, everything notarized), you'll have to provide proof of income and/or assets and probably a local guarantor (this for sure if you're not a legal resident of the country). To that end, you may be asked to show tax returns from back home, pay stubs, and/or bank statements. In Latin America, the formal requirements for a long-term rental are less onerous; still, as a foreigner who is not a legal resident, you might have trouble finding a landlord comfortable renting to you, depending on where, specifically, you're looking. Landlords don't like renting to people who can just up and leave the country overnight. This has happened often here in Panama City, for example, and landlords in this town are gun shy these days. Credit checks are typically only used and/or useful in the context of a mortgage application…meaning they're relevant only in markets where it's possible for a foreigner to borrow locally for the purchase of real estate. Banks in Panama, for example, will ask for a U.S. credit report from Americans and whatever is available in the UK for Brits when considering a mortgage application.
The first foreign property market I got into was Spain. After driving most of the coast of this country to see what I could see and to learn what I could learn, I met with a developer on the Costa del Sol. This developer had a long track record and had just launched a new pre-construction project the day before I arrived. I met with the developer’s agent, who made his pitch, showed me the floor plans, and answered what questions I thought to ask. I did have the presence of mind to ask to see the site, so we got in the guy’s car and drove to where the apartment buildings would be built.
The site was a stretch of sand with fishing boats tied up in one direction and some restaurants in the other. The onsite sales office was under construction, but otherwise we were standing on a scruffy parcel of raw land in front of the ocean.
Nevertheless, I was sold. The terms of the pre-construction offer were 5% down when signing the reservation agreement and then staged payments of 5% apiece over the two years of construction. This was back before the real estate glut in Spain, when pre-construction purchasing was very much in vogue and lots of people were making money buying and flipping. I wanted in.
Kathleen wasn’t as sold as I, though, when I called her that night from the hotel to say that I wanted to buy one of these units and needed to sign the next day as most of the best units in the first building had already been reserved (remember, the developers had only launched the project the day before I met with them). Kathleen finally, reluctantly agreed, and I signed the reservation agreement the next morning. Then I went in search of a Spanish attorney to review the deal and the developer for me.
Of course, that was backward. I should have engaged an attorney before signing anything. Fortunately, my instinct about the developer was right. The group had a good track record and was part of a large conglomerate in Spain, which meant they had money backing them.
Jumping ahead two years, when the building I’d invested in was close to completion, I got a call from the developer saying they had a buyer for my unit. I’d listed my unit for resale almost immediately after signing the purchase agreement with the developer who, in this case, was willing to re-list units for sale through their sales office. The buyer wanted to move in right away rather than waiting for a unit to be completed in another building, although that would have cost him less. We closed the deal a month before I would have had to come up with the final 50% of the purchase price and close on the condo myself.
I realize today how lucky I got with this. The timing worked out perfectly...meaning no unpleasant conversation with my wife.
If a buyer hadn’t appeared on the scene for me when he did, I had a Plan B. If I’d ended up in a position where I had to close on the unit myself, I could have obtained a mortgage for the remaining 50% of the purchase price. The property was right on the beach, which meant it was part of a limited supply compared with the big volume of cookie-cutter condos elsewhere along the Spanish coast sitting back from the beach. I wasn’t concerned about flipping this property.
I took the plunge, mostly on the strength of instinct and very aware that I didn’t know everything I needed to know about buying property in Spain. I acted on what I believed to be a great deal because it was in front of me when I was ready to act. Could I have found a “better” deal. Probably. Should I have tried? No. If I’d decided to wait and seek out a “better” opportunity, I likely would have missed out on the opportunity altogether.
That’s what happened to a seasoned U.S. real estate investor I met years ago at a conference in the Dominican Republic. This guy had gone to Costa Rica some years before I met him looking for real estate opportunities. He did his due diligence on the country and the buying process and then proceeded to look for deals. He turned down buy after buy as opportunities presented themselves, because he was waiting for the “best” deal.
After four years of looking for the best deal, the guy finally realized that the market has passed him by. Anything he was finding after four years still may have been a good deal, but he had missed out on many great deals.
His conclusion? To move on to the Dominican Republic.
When I met the guy, he had been shopping in the Dominican Republic for two years. After he told me his Costa Rica story, I figured he must have learned his lesson. Surely now, after two years of time and effort, he must have invested in something in the DR. But no, he hadn’t. He was still looking for the best deal.
Had this guy bought anything...and I mean any piece of property with good title...the day he stepped off the plane on his first trip to the Dominican Republic, he would have realized at least 25% and likely closer to 40% appreciation on that investment by the time I spoke with him. The market in the DR had gone up significantly in the two years before my first trip there...and it continued to go up at a good clip for several years after.
What was most interesting to me about this guy was that he wasn’t a novice real estate investor. He owned dozens (maybe more) of rental properties in the United States. He just couldn’t make himself pull the trigger in a foreign market.
Moral of this story? You can’t wait around for the perfect or the best opportunity. Get yourself up-to-speed and put yourself “in the market,” as I like to say. Then allow yourself to recognize a good deal when you see one...
And act on it.
P.S. I’m hosting a Global Property Summit in April that will educate you on the general concepts you need to know when investing in real estate overseas while also introducing you to particular opportunities that I find most interesting right now. This will be a low-cost and efficient way to get yourself up-to-speed while, at the same time, putting yourself in key markets of opportunity for 2014.
More details are here.
Located directly on one of the city's most attractive parks, living here we were an easy walk to the local tango clubs, orchestra, theater, street fairs, and some of the city's best dining. A spacious apartment with two bedrooms, it was a great place to live and a great place to invite guests...and it even earned rental income when we weren't using it.Again, this apartment was fulfilling a dream. It was not an “investment” property. But after about four years we sold the downtown apartment, in just one day, for 76% more than we'd paid.In the 13 years since I retired, I have enjoyed some of the world's best locations for retirement, some full-time, some on a part-time basis. For almost six years, my primary home was in Punta del Este, Uruguay, South America's #1 beach resort. With its fantastic beaches and fine dining and nightlife, it's a mecca for international travelers and offers a super quality of life for the money. Since retiring, I have also enjoyed a part-time home in Ecuador's Valley of Longevity. With pure air and water, the world's best weather, and some of the Andes' most staggering views, Vilcabamba is reputed to have more people over 100-years-old than anywhere else on earth.The house in Uruguay went up 87.5% in value in six years (during the U.S. recession and housing crash)...and in Vilcabamba the home I purchased increased in value 120% in four years.Today the apartment I purchased as a part-time home in MedellÃn more than pays for itself, paying me US$2,000 per month in rental income when I'm not in residence. In addition (and this is where I think this gets very exciting), each real estate investment I’ve made has helped to bank roll both my next real estate purchase and, in the meantime, the very appealing and adventure-filled retirement I have been enjoying with my wife all along the way.Collectively (and this is not over-stating the fact), these purchases have enabled the amazing retirement that I've enjoyed. Prior to looking overseas, the lifestyle I enjoy today simply was not within my grasp. By reinventing my life overseas as I have, I've been able to take advantage of some of the best opportunities that the world has to offer, and I am enjoying an enviable new life as a result.Although, in my case, if I’m honest, it wasn't always easy. I had to learn a new language and explore a number of new countries on my own. I had to unravel the local markets and try to discriminate a good deal from a bad one. I had to find good legal support and to try to separate the crooks from the good guys in far-flung real estate markets. To be honest, it took me years of travel and investigation...because no resource existed to help me.And, in some ways, I was just plain lucky the way things turned out.This is why I was so happy to work with Lief Simon and Kathleen Peddicord to create the first-ever Global Property Summit. During this all-new, one-of-a-kind event, Lief, Kathleen, and I, along with several dozen experts and real estate pros from around the world, will introduce you to the world's best property markets while, at the same time, arming you with everything you need to know to take advantage of everything they offer right now.This is perhaps the best time in our lifetimes to be investing in real estate overseas. Key markets are rebounding, and opportunity is being created in real time.Full details of the program we have designed are here.Lee Harrison
It's also 35 square meters. That's about 376.6 square feet.One day last week in the office in Panama City, Lief got out a tape measure and walked off the area for the conference room where we were sitting. That room is 42 square meters.The 35-square-meter apartment we've made an offer on in Paris is also two bedrooms. Plus a salon, a kitchen, and a bathroom. All in 7 fewer square meters than our Panama City office conference room.The craziest part is that the place in Paris seems like reasonable space. How many square meters do you need to live or work comfortably in the City of Light? Many fewer than you might imagine. It's all in the configuration.Two weeks ago when we saw the 35-square-meter apartment that got our attention, we also toured slightly bigger places. One 42-square-meter apartment was simply one room plus a bathroom. Typically a one-room apartment is referred to as a "studio," meaning no separate bedroom. I'm not sure what you'd call this place, though, as the one room was the living room, dining room, and kitchen, but not the bedroom. The bed was in the bathroom, alongside the tub.Another apartment we considered was 40 square meters split between two levels with a miniature circular staircase connecting them. We liked the idea of two floors, until we realized that the lower floor was belowground.Three rooms plus a kitchen and a bath in 35 square meters isn't easy to come by, even in Paris (which is why we acted quickly to put in our offer), but it makes the point—the folks in this city know how to make the most of the space they've got.The salon and the two bedrooms in this apartment are tiny by North American standards but big enough when you get down to it. Less comfortable are the kitchen and bathroom. "Bathroom" is generous. It's more a bath closet. You could shower, brush your teeth, and use the toilet all at once without repositioning your feet if you were in a hurry. The shower head is immediately above the toilet which abuts the little wash basin. The day we toured the place, Lief and I spent a long while standing together at the door to the bath closet considering reconfiguration options. If we intended the place to be our full-time office right away, we wouldn't invest in a refit. The toilet/basin set-up would suffice. However, we won't be ready to operate from here, even part-time, for another year-and-a-half (that'll be the ideal time to transition Jackson to a new school in Paris). We'd like to rent the apartment over those 18 months if possible. Though our agent says we could be surprised, I find it hard to imagine someone willing to rent the place as-is, so Lief and I have come up with a preliminary plan for doubling the size of the bathroom without interfering too dramatically with the size of the adjoining bedroom.And we're pricing mini-IKEA kitchens.Adding in the costs of the renovations and the costs of closing, the per-square-meter price we're looking to spend for this charming little piece of Montmartre is still within the budget we imagined and reasonable in the context of what we should be able to charge renters.The sellers have our offer. I'll keep you posted.Kathleen Peddicord
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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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