Professionals can make money in any type of market. You have to be flexible and agile – moving with the markets and opportunities. The Spanish market was hot for more than a decade. Now it is under pressure and many investors will sustain losses as the market settles out, but some people will still make money in Spanish property.

Amateur real estate investors are running for the hills in the U.S.. Professionals started looking overseas before the euphoria of “ever rising” real estate values wore off. With the increase in foreclosures signaling the end of the real estate boom in the U.S., now might be the time to consider looking for some real estate bargains in the States.

The professionals look for the opportunities that no one else is paying attention to – the wholesale deals – rather than trying to ride a retail price explosion that may or may not happen…or sustain itself. Buying undervalued property is one way to invest at the wholesale level.  This requires being on the ground searching for the deal.  For many, this kind of investing is too much work… making it easier for those who are willing to put in the effort.

Undervalued properties can be found in any market in any country.  In the U.S. right now, buying foreclosure properties is one way to buy below market value.  In emerging markets and other foreign markets, the potential is even greater.  The markets are less efficient with no multiple listing services or easily compiled comps.

Foreign markets are where you can find properties that have potential for doubling your money in a few years with minimal risk of the property dropping in value.

The key is in understanding the dynamics of the market.  Real estate goes up when demand increases. Simple enough. But what will create the demand? There are several factors: local economics, foreign interest, and the path of progress. You can’t control those three factors, but you can track them and invest based on the direction they are heading. A fourth factor is adding value. This you can control as an investor, but it takes more effort. Adding value would include renovating a house or developing land.

The best potential for your investment is where all three of the uncontrollable factors occur together. In those markets your risk is reduced because even if one or two of the factors don’t materialize to their fullest, you still have demand.

Where are those markets? There are a few with strong demand from the local population along with foreigners buying retirement or second homes.

Brazil has a growing local demand for housing both in the lower and middle classes as well as the upper classes. Local developers are having a hard time keeping up with demand for housing spurred by government programs to help people with jobs to get a mortgage. Brazil also has growing interest from foreigners… particularly Europeans looking for inexpensive vacation homes. With its excellent weather and fine beaches, many Europeans have started going farther south for vacation as the traditional Mediterranean destinations have become more expensive. Now take a map of Brazil and ask around where the new roads and airports are going in and you have a recipe for an investment formula.

Thailand has similar dynamics with growing local demand while becoming a prime retirement destination within Asia. Thailand already had a strong vacation home market.  The Philippines are starting to emerge with growing demand from abroad.  In fact, there are many potential markets to consider.

Each country has its own risks and particular current issues. But remember, real estate is a long-term investment.

The opportunities will vary country by country, but generally speaking, you can buy a condo… completed or pre-construction. Pre-construction has taken its hits in places like Miami where overbuilding has turned a “sure thing” into hardship for many buyers. 

There are risks to pre-construction, but if you are buying early enough in the cycle and also buying something that both foreigners and locals would live in, then you can mitigate your resale risk.

Buying land is the simplest real estate play. The holding costs are minimal and the potential upside in the right location can be multiples of your purchase price within 3 to 7 years.

For cash flow and high potential returns, you can invest directly with developers. Finding these investments isn’t easy. It generally requires knowing someone in the industry in the country you are looking at, but you can find opportunities through real estate professionals like attorneys and real estate agents. You have the least control over your investment with this option, but the upside is an exit strategy with a specific timeline (although the timeline may change).

If you want to hear from the professionals directly, a dozen of them will be gathering at a conference in Monte Carlo this October. These experts will cover opportunities in Brazil, Thailand, the Philippines, Panama, Uruguay, Croatia, and several other countries. Following the professionals has never been easier for the sophisticated investor. Click here to find out more.

Sincerely,

Lief Simon’s International Real Estate Opportunity Conference:
The Offshore Investment Event of the Decade