I remember it like it was yesterday…
Lief and I were seated al fresco at a café table at the edge of a cobblestoned plaza sipping chilled prosecco in the shade of a white umbrella.
The sky was clear, the square busy.
We had a direct view, across the road, of the beach. Seagulls followed sailboats across the horizon.
We’d spent many happy afternoons in that same spot delighting in the same views… but this day was memorable.
Luis had just made a remarkable recommendation. He was insisting we’d already doubled our money… and he could cash us out quick.
We’d targeted this spot on Portugal’s Algarve coast two years earlier. It was a market at a bottom. Values were irresistibly discounted.
Our Lisbon attorney had connected us with Luis who’d shown us six apartments for sale that first afternoon together. We’d stopped at this café after our marathon property tour to regroup on the opportunities on the table. We were ready to act.
Lagos is the jewel in the Algarve’s crown. Unlike better-known Albufeira, which has sold out to the resort industry, 2,000-year-old Lagos has protected its Old World soul. A classic crossroads, this city with Roman, Arab, Christian, and corsair heritage welcomes travelers and traders of all description.
We wanted to know the place better. A property investment would give us reason to return.
We also wanted to make money. Values in Portugal—particularly along its Algarve coast—were at historic lows. We believed that was about to change.
The most interesting of the properties we’d viewed with Luis was a 200-year-old townhouse on a winding pedestrian-only passageway two blocks off the square, two bedrooms on three levels with a rooftop terrace and a sea view.
Every apartment we saw that afternoon was a great bargain, but this one was an extraordinary buy, the kind that comes along only so many times in any property investor’s career. The seller had a mortgage she needed to get out from under. If we could close in a month for cash, she’d sell for 100,000 euros.
It took just a few minutes of conversation for Lief and me to agree. We told Luis to tell the lady seller that she had a deal.
That was summer 2015, in hindsight the precise moment this coastal market bottomed out. Within two months of our buy, prices began a long and impressive march up.
We bought what we bought because we knew better than to buy common. In a competitive market, common can’t compete. Plus, we prefer houses of character. They hold intrinsic value. They’re also more pleasing places to spend time. Whenever possible we like to marry making money with having fun.
We were also investing for cash flow.
Join us January 8. for our annual global index reveal.
In season, the streets of Lagos bustle with tourists from across the Continent, the U.K., and beyond. Twenty-something Euro-vagabonds with rasta hairdos, body art, and guitars over their shoulders mix with families with young children and well-heeled retirees.
We found renters off-season, too. Our rental manager kept the place occupied 90% of the two years we owned it.
Lief and I have invested in more than 60 properties across two-dozen countries. Twenty-one of those have been rentals. We look for a minimum return of 5% to 8% per year net of management fees and all expenses.
Our Lagos property netted us 9% annually.
In addition, we enjoyed two summer holidays there with our son.
Profit… and fun.
It was a home-run investment. Why did we sell?
Because that sunny afternoon when we returned to Lagos with Luis and sat again with him at our favorite Lagos café, he insisted he could flip our sea-view buy in a week for twice what we’d paid.
“In a week?” Lief asked skeptically. “You could find a buyer in a week to return us double our money?”
“Buyers are bidding against each other,” Luis explained. “Everybody wants a stake in Europe’s hottest market.”
Lief looked over at me and I back at him. As when we’d made the buy, we didn’t need much convincing now to exit. We’d have no trouble finding other uses for that capital.
“So we’re selling,” Lief said holding up his glass to toast the decision.
Three days later Luis emailed to say he had a buyer for 4,000 euros more than our ask.
I didn’t set out to be a property investor. I made my first real estate purchase when I married my first husband at age 25, a starter rowhome in northern Baltimore City. We traded up two years later for a 100-year-old Craftsman in New Freedom, Pennsylvania. When my first husband and I divorced, I returned to Baltimore where I bought a three-bedroom brick home with mature gardens and a big backyard for my daughter.
Each of those purchases was made for personal reasons. I gave no thought to when or how I’d exit or how much appreciation I might enjoy. I did make money from each buy but accidentally.
Then I met Lief Simon. Nothing about his approach to buying real estate was accidental.
Lief had made his first property investment a few years earlier. He’d taken a $5,000 gift and turned it into $150,000 profit.
That buy was in Ravenswood, an up-and-coming north-side Chicago neighborhood of middle-class office workers and first-generation Latino immigrants. Here, after months of searching and take-no-prisoners negotiations, Lief put together a deal that allowed him to make the buy with but $5,000 cash.
The asset was a building configured as three two-bedroom flats. Lief lived in one apartment and rented out the other two. The rents generated enough income to cover the mortgage payment. When he sold two years later, Lief walked away with $150,000 after all expenses.
Not a bad return on $5,000.
Next step in Lief’s plan was to diversify abroad. That’s how he came to be in Ireland, where he and I met on a tour I’d sponsored and sold to readers of my International Living magazine. Turned out, Lief was a lifetime subscriber. I used the trip as a chance to scout locations for the EU office I was to open for my partners at Agora, the publishing company behind International Living. Lief was searching for his next property play.
Within three months of the trip, Lief and I were engaged. A month later we were married. The month after that we moved together to Waterford. Now we needed a place to live.
Lief’s $150,000 profits from his three-flat in Chicago combined with the $50,000 I made selling my home in Baltimore funded our first joint property purchase.
Lahardan House was another home run. It was our charming and beloved family home for five years then, thanks to the Celtic Tiger timing, returned us five times our money when we sold.
That jackpot made possible the purchase of an apartment in Paris that we own still and from where I write today.
This property has been both a home base and a short- and long-term rental and, according to the website of French notaires who track and report values, is now worth two-and-a-half times what we paid for it.
And so we’ve continued over three decades, converting profits from one buy into a next investment.
Nineteen times we’ve returned 200% or more, including from that townhouse in Lagos. Eight times we’ve lost everything.
Every purchase has been an adventure and an education.
We’re not jet-setters. Lief is the son of a single working mother from Phoenix. I’m just a middle-class girl from Baltimore. But you could say we’re living a jet-set lifestyle.
For me, the lifestyle advantages have always been the prize. Lief is my perfect complement. For him, it’s all about the ROI.
In today’s world, overseas real estate is not only the sexiest but also the smartest way to invest your money. It’s a key strategy for diversification at a time when diversification is not only a sound investment approach but survival. The very good news is that you do not need a big budget to get started. Remember, Lief launched his career with $5,000.
The objective stretches well beyond making money. Yes, you build wealth this way, but you’ll be accomplishing more than racking up profits.
It might seem right now like the world is spinning out of control. This is how you put yourself in the driver’s seat of your financial future. You’ll be positioned for profits in the immediate term in the form of rental yields, in the mid-term in the form of capital appreciation, and over the very long haul creating a legacy for you and your heirs.
All the while, purchase by purchase, you’ll be reinventing your life.
With our decades of experience and track record of wins and losses, Lief and I know more about this than any other individual non-billionaires you’ll find.
In our new book “The Beginner’s Guide To Buying Real Estate Overseas” we share our secrets.
To celebrate the release, a limited number of copies are available free.
Until next time,
Kathleen Peddicord
Founding Publisher, Overseas Opportunity Letter
