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Creative Real Estate Investment Opportunities In The United…

Wall Street Can Keep Its Paper

About two years ago, I invested in cemetery plots in the UK. Specifically, I bought a 10-plot package and recommended that my Marketwatch members do the same.

Last week I heard from the agent who brokered the investment. He was contacting me to tell me that the developer behind the offer has received planning permission for a crematorium on the site. As a result, a large investment group is interested in buying out the entire cemetery. The expectation is that all investors will be paid out ahead of schedule and within the next two months.

I liked this offer because of the projected returns (IRR of 15% to 20%), the low capital requirement, the currency diversification (more on this in a minute), and the availability of developer financing if you bought a 10-plot package. Otherwise the minimum investment was three plots at £995 each.

I went for the financing and set things up so the monthly payments have been charged automatically to my credit card. I’ve made 27 payments to date and have nine to go, but it looks like the exit event will happen well before the final payment has been made and a year or more earlier than was originally projected. It’s looking now as though my return will be an annualized 44%.

One reason I jumped for this offer when I discovered it, as I said, was because it was an investment in the British pound. The pound has strengthened against the U.S. dollar (my investment currency) since I bought in, bumping up my U.S. dollar IRR by 3% per year to 47%.

Since making this cemetery plot investment two years ago, I’ve seen a growing trend of packaged real estate offers from around the world, mostly the UK. The Brits seem creative when it comes to packaging investment opportunities for the individual investor, perhaps because the UK imposes fewer restrictions on this kind of thing than does the United States. From agriculture funds to direct investments in fruit plantations and dairies, for example, where you own the land and the cows, opportunity is expanding for the small investor looking to diversify globally.

Not too many years ago, if you wanted to invest in agriculture, you had to plop down a US$500,000 to US$1 million on a piece of land and then find a manager to run the farm for you. You can still do that today if you’re interested and have the cash, but for those of us with less than a million-dollar-per-buy budget, it’s easier all the time to find good opportunities beyond the paper products pushed by Wall Street.

Lief Simon

P.S. Since I first learned about cemetery investments in the UK, many new similar opportunities have popped up. I’ve been told that some of these copycat developers don’t really know what they are doing. Be sure to do your due diligence if you come across one of these more recent opportunities.

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