08/30/15: In Search of Yield – Going Global

Just as ancient hunter-gatherers would migrate in search of sustenance, real estate investors today might be well-served to migrate into new markets and product types to find yields.

In this first episode in our series on finding yield, we go WAY outside the box of little green houses and red hotels on Main Street USA…and take a look at an eclectic assortment of global opportunities.

In the studio gathering ideas and hunting for opportunity in this episode of The Real Estate Guys™ radio show:

  • Your heckuva hunter and host, Robert Helms
  • His nut-gnawing co-host, Russell Gray
  • Special guest and Uruguyan attorney, Juan Federico Fischer
  • Special guest and Premier of Nevis, the honorable Vance Amory
  • Returning guest and international property broker, Jon Greene
  • Special guest and Myanmar fund manager, James Song

It’s no secret real estate has been attracting a lot of investment capital over the last several years.  After the dust settled from the financial implosion of 2008, the most intrepid investors stepped in and started snapping up bargains.  Turns out that was a pretty good idea.

Today, while there are still deals that make sense, it’s a lot harder for residential real estate investors to find bargains.

Does that mean it’s time to sit out and wait for the next crash?

Only if you’re a one trick pony.

But if you’re open to new markets, product types and strategies, there are lots of alternatives.  In this episode, we talk to several people about investment ideas we’re guessing you wouldn’t have come up with on your own.

Uruguay

Up first, we talk to Juan Federico Fischer.

Juan Federico Fischer is a lawyer from Uruguay who helps investors invest in farmland in UruguayJuan is a lawyer from Uruguay.  But we like him anyway.

When’s the last time you talked to a lawyer…or anyone…from Uruguay?

Juan’s professional practice helps international investors understand and find real estate investment opportunities in Uruguay…and in particular…farmland.

Long time listeners know we’ve been very interested in farmland…anywhere…for the last few years.

Farmland investing is a great way to derive income from land, by serving a need that is even more basic than housing.  And unlike residential real estate, where you need to hone in on local jobs.  Farmland investing lets you produce your crop anywhere and the sell it anywhere.

So no matter where the hungry mouths are…and it’s a safe bet the world’s population is on the rise…you can own land that produces a renewable resource and tap into emerging markets.

Juan explains to us that Uruguay is extremely friendly to foreign investors.  In fact, one-third of the land is owned by foreigners and they’re fine with that.  Very cool.

Uruguay is also one of the most advanced countries in Latin America with the highest per capita income.  We would not have guessed that.  But that’s why we ask experts.

Nevis

Next, we sit down and visit with the Premier of the tiny Caribbean island nation of Nevis, the honorable Vance Amory.The Honorable Vance Amory is the Premier of Nevis

While you may not have heard of Nevis, you’ve probably heard of Alexander Hamilton.  He’s the guy on the U.S. ten dollar bill.  At least for now.  There’s been some talk about dumping Alex and replacing him with a woman.  But we digress.

So Alexander Hamilton was born in Nevis.  Jot that down.  It could end up as trivia question on a future episode of The Real Estate Guys™.

Back to Nevis…

The investment play in Nevis isn’t farmland.  It’s beautiful resort property….that you can rent out.

We’re also fans of resort property because it’s a way to collect rents from the affluent.  Just say those words.  Collect rents from the affluent.  That just SOUNDS like a good idea.

Investing in Nevis real estate can earn you money and a second passportThis can be great diversification for real estate investors who derive most of their income the lower middle class.

Nevis (and Uruguay also) has another cool feature which our next guest Jon Greene describes…

If you purchase a property of sufficient value (about $400,000 US), it’s possible to not only get the property, but citizenship too!  That means another passport.

While not everyone is into a second (or third or sixth) passport, some people (Simon Black) think it might be a good idea.

What’s REALLY cool is you can buy a property, collect rents for 5 years while (hopefully) equity happens to you…PLUS get a passport.  And then, after 5 years you can sell the property and KEEP the passport.

Of course, we’d like to keep both.  But it’s nice to know that after 5 years, your Nevis citizenship is permanent, even if you decide to move your equity to another place.

Mynamar

Next…and to make sure we’re showing some love to the Eastern hemisphere, we talk with James Song.

James is a principal in an investment fund in Myanmar.

Never heard of it?

How about Burma?  Like Burmese python.

Myanmar is the former Burma and one of the most interesting investment markets in the worldIt’s a long story, but Burma was once one of the richest nations in Southeast Asia.  Then it fell under a military dictatorship.  We hate when that happens.  It’s usually a disaster for an economy.

In time, they got the dictator out of the way, changed their name and held free elections in 1990.  That’s a start!

Of course, getting people to trust their capital to a country with a someone volatile past is a little scary.  It’s like loaning money to someone with a checkered credit history.

Yet, Myanmar is a very resource rich country…including gems, natural gas, oil and other minerals.  And in spite of China’s recent slow down, they’re still a big consumer of natural resources, so Myanmar’s close proximity to China (and India) give it some really big potential customers right nearby.

So brave investors might be willing to take the risk.

But if you’re a little more conservative, before you make that “loan” to the buy with bad credit…

What if you could get an investment guarantee…up to nearly THREE times your investment?

And what if that guarantee is by the U.S. government?

You can.  And it is.

James explains the what, why and how of all this.  We just think it’s amazing and certainly worth a closer look.  Or in this case, a closer listen.

So tune into this episode of The Real Estate Guys™ radio show and join us in our first excursion…in search of yield.

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9/28/14: Your International Economic Plan

The world’s economy is growing ever more global. Is yours?

Governments, corporations and wealthy investors have been investing globally for decades.  Even Mom & Pop paper asset investors practice international diversification through foreign stocks, bonds and currencies.

But real estate investors tend to be very geographically focused.  Many only invest in the particular area they happen to live in.  Maybe it just seems too daunting or troublesome to invest the time and money to figure out how to invest out of area, much less out of country.

However, there’s a reason why most non-real estate investors have a global strategy.  So doesn’t it stand to reason real estate investors should think about it too?

To find out, we sit down and visit with two international experts.

On location at Planet Hollywood in Las Vegas, Nevada:

  • Your international host, Robert Helms
  • His homely co-host, Russell Gray
  • The original international man and renowned global investor, Doug Casey
  • A purveyor of international properties that come with an amazing bonus, Jon Green

One of the first rules of investing is diversification.  After all, no one can predict the future.  And there are so many wild cards, how can you know how any investment will really come out?

You can’t.  So the wise thing to do is organize your investments in such a way that if one or more components of your portfolio fail, it doesn’t completely wipe you out.

And according to many of the pundits we’ve spoken to, for Americans especially, going global is more important than ever before.

They point out that for many decades, Americans have enjoyed a unique position in the world, but things are changing.

Specifically, since 1944, the United States has enjoyed having the dollar holding the envious position as reserve currency of the world.

After World War II, the U.S. had the biggest gold hoard, the strongest economy, the biggest army and the most stable government.

Most of all, the U.S. dollar was backed by real gold.  And because you could exchange $35 of your dollars for an ounce of gold, the dollara was literally “as good as gold”.

After 1971 that changed, but the U.S. still had the world’s strongest economy, the largest storehouse of gold, and a strong balance sheet.

Today, it seems apparent that China could very easily pass up the U.S. as the world’s biggest economy.  Uncle Sam is also no longer the biggest creditor, but instead is the world’s largest debtor, owing nearly $20 trillion…not counting unfunded liabilities which could run the total well over $100 trillion.

To top it all off, there are several fairly credible industry watchers who suspect that most of the U.S. gold supply is effectively gone.  That is, it may physically be in the warehouse (though no one knows for sure, since they won’t show it to anyone), there may be multiple claims on all of it.

So who knows what will happen?

No one.  Which is why it’s important to diversify.

The point is that based on the substantial changes in the global financial landscape, there are different risks…and OPPORTUNITIES…that didn’t exist before (at least not on the same scale as today).

So it’s no wonder that corporations and wealthy individuals have established a presence in multiple jurisdictions.  And it isn’t just for tax benefits, privacy, asset protection and escape from burdensome regulations.

There are also great opportunities which present themselves when people, money and industry move around.

Doug Casey tells us about several real estate purchases he made going back to the 70’s.  As you’ll hear, Doug did quite well.  And it was simply a matter of recognizing economic and demographic shifts and getting in front of it.

Those changes are continuing.  In fact, it could be argued they’re accelerating.  Certainly, the ability for every day investors to discover these opportunities is greater today than ever before simply because of the speed at which information flows.

Also, some Americans are looking to invest off-shore not just for the return on investment.  They’re looking for a different kind of diversification.  Specifically, they want to have citizenship, a passport and a home in another country.

Some may think that’s radical.  Others might think it’s cool.  But for the people who do it, it’s a strategic move to give themselves a plan B….a way to move around the world, own assets or establish a life outside the United States.

Why would anyone want to do that?

Because no one knows what will happen.  And when you’ve built up enough wealth, you grow concerned about how to protect it from failing currencies and financial systems, or confiscatory taxation, or asset seizure by overly indebted governments.

If you don’t have enough wealth yet to worry about this, then we hope you’re on your way.  To help you know what to do when you get there, listen in to our conversation with international man, Doug Casey and economic citizenship concierge Jon Green.

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed.