Is investing offshore right for you?
International investing can be both exciting and daunting. In our fourth installment of the Profitable Niches series, we hope to demystify the process for investors looking to cross some borders.
Every investment has a risk … you just have to learn how to evaluate the risk and the reward so you can choose wisely.
In this episode of The Real Estate Guys™ show you’ll hear from:
- Your world-traveling host, Robert Helms
- His petrified-of-planes co-host, Russell Gray
- CEO of Mahogany Bay Village and international investor, Beth Clifford
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Expand your horizons with international investing
Our guest has made a name for herself in international investing.
The CEO of Mahogany Bay Village and a pro at international resort investing, Beth Clifford started expanding her own real estate business by moving into different states.
It wasn’t long before she got an itch to start looking outside the United States.
She’s a great example of someone who’s become a success by opening up her geographic horizons.
“It’s always convenient to live and invest in the same place, but real estate is about location,” Beth says. Investors have to look beyond what is outside their bedroom windows.
International investment also provides an opportunity to diversify and put your assets into different baskets.
Whether you’re an investor looking to expand beyond your state of residency or your country, Beth says the methodology is the same.
To invest smartly, you have to understand the market, laws, and culture of the place you’d like to invest in.
And just because there might be a learning curve doesn’t mean you should shy away from good opportunities.
Take what you’ve learned and expand it into another arena, whether that’s a new asset class in the same location or the same asset class in a new location.
Either way, you expand your world—and get the chance to become an expert all over again.
When you’ve learned one new market, it’s easier to get to know a second one, Beth notes.
And … “It’s all about teams,” she says. As someone who owns, invests, and develops in multiple countries, Beth has learned the value of a talented team.
Let’s talk about taxes
As soon as you cross a country border, you have to understand an entirely new tax system. That’s why Beth has separate development companies for properties inside and outside the U.S. … and why she enlists professional help when it comes to accounting.
Although taxes can be tricky, owning property and businesses outside of the United States can reap great tax benefits.
Despite that, some tax professionals still make a habit of creating fear, uncertainty, and doubt for investors who would like to make some money across country lines.
Beth recommends shopping around for an informed professional … because although the attorneys make it seem hard, there are really only three documents you need to complete each year.
She recommends professional assistance for at least your first two years, until you have a solid understanding of the basics.
One thing to be aware of? Currency arbitrage and exchange. If you’re unaware of currency issues, they could bite you. Make sure you understand whether you can easily exchange currency and whether the jurisdiction you’re investing in is neutral.
A relationship business
Real estate is a relationship business. And especially when investing beyond your familiar boundaries, building local relationships is key.
We asked Beth how to she expands her network across borders.
“I ask for help when I go into a market,” she says. Investors should have “an attitude of humility, not hubris.”
The first thing Beth does is look for the Class A players in a given market. Who are the top three law firms, employers, development companies?
Beth seeks out the movers and shakers … then picks their brains for advice.
“A players fly with A players,” she says. “It’s the rule.”
Networking doesn’t cost you money … and it gets you into the contact database of the best and brightest.
Once you’ve sought out the best, go in with the intention to learn. Ask these bright business people how they’ve obtained their success and where they see YOU going wrong or right.
The goal is to find team members who provide value to you … and are excited to do so.
And one business relationship can net literally millions of potential customers.
It’s all about leveraging yourself.
Is making connections any different in a foreign country? “People are the same everywhere,” says Beth.
Basic human connection is the key, no matter where you go. People want the same things … so connect on a common level.
Thinking about making the leap?
Wondering whether you’re cut out to be an international investor?
Beth recommends starting by test driving the market. Do a due diligence tour outside of the U.S. … like one of our discovery trips.
It’s a great way to get to know the area in which you might be investing, educate yourself on the culture and special considerations, get to know local movers and shakers … and have some fun.
Seeing how others put together international investments can be eye-opening, says Beth. Discovery trip attendees get a year of education … in four days.
So get there … and see what awaits you beyond the horizon.
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