JS 78: Reducing International Investment Risk with Taylor White Host of the ‘Overseas Property Insider’ Podcast

September 24th, 2014 by Jason | Comments Off on JS 78: Reducing International Investment Risk with Taylor White Host of the ‘Overseas Property Insider’ Podcast

Today’s Jet Setter Show talks about the sometimes harsh reality of overseas real estate investment. Host of the Overseas Property Insider Podcast, Taylor White, tells Jason Hartman of some the successes and failures he has experienced, as well as giving out a few tips for those looking into the market. They also talk about society’s general perception of certain countries and compare it with their own thoughts.

Key Takeaways

3.00 – In the real estate world, you can only trust what someone is saying if you know they’ve had these experiences themselves.

4.00 – There are often two options for making money with overseas real estate: rent it out or buy and sell.

6.00 – Decide on how your strategy is going to work and talk to people who can advise you. When advertising your property online, make the best use of websites such as: www.airbnb.com, www.vrbo.com, www.homeaway.co.ukwww.flipkey.com, www.roomarama.co.uk.

07.50 – This new way of renting removes the reliance on a real estate agent to get things done.

10.25 – Money, marketing and on-the-ground contacts for facilitating can make or break a development project.

13.50 – Taylor White identifies four main categories in real estate: PRE-CONSTRUCTION, DURING CONSTRUCTION, PRE-COMPLETION and KEY READY.

18.00 – Websites such as www.zillow.com and www.realtor.com are great for helping you ascertain what a property is worth.

20.50 – One of the best strategies if you’re on the ground is to be known among the agents and to work with them.

23.40 – Getting loans or money from these overseas banks is possible and there are options available, but it’s not an easy process.

25.50 – Buying too many apartments and being tied to too many contracts is one of the biggest setbacks to those going into real estate business.

31.30 – As difficult as it can be to obtain a second citizenship, a lot of people are looking into it, just in case.

36.40 – Travellers form their own opinions about the countries they visit; Taylor White sees Brazil as overrated.

38.00 – As a foreigner buying real estate overseas, one of your biggest difficulties might be setting up a bank account. Brazil, for example, does not allow this.

41.00 – There are some places in the world where it’s better not to buy real estate.

 

“Tweetables”

Property developments can live or die for three reasons: money, marketing and on-the-ground contacts. Tweet this!
Some places are better to just visit as a tourist, without focusing on purchasing more real estate. Tweet this!
Trust in those in the real estate world who truly practice what they preach. Experience is everything. Tweet this!

 

Transcript

Introduction:
Welcome to the Jet Setter Show, where we explore lifestyle-friendly destinations world-wide. Enjoy and learn from a variety of experts on topics ranging from up-scale travel and wholesale prices to retiring overseas, to global real-estate and business opportunities to tax havens and expatriate opportunities. You’ll get great ideas on unique cultures, causes and cruise vacations. Whether you’re wealthy or just want to live a wealthy lifestyle, the Jet Setter Show is for you. Here’s your host, Jason Hartman.

Jason:
It’s my pleasure to welcome Taylor White to the show: he’s been involved in real estate since the young age of 22. He has purchased and sold real estate in 5 countries, and has been living overseas full-time since age 27. He’s host of the number one rated Overseas Property Insider Podcast with listeners in over 80 countries and has spoken with the likes of President of the world’s largest house-sitting site, the Senior Vice President of the number one vacation rental marketplace and the President of the Premier Self-Directed 401(k) Company and dozens of international house-hunters live here by this, as well as alums all over the globe. That is Taylor White, and Taylor, welcome, how are you today?

Taylor:
Jason, you said that fantastically. I’m excited and I’m ready to go.

Jason:
Look at the entire world. First of all, maybe you want to mention: which five countries have you purchased and sold properties in?

Taylor:
Great question. I’ve bought and sold, of course, in the United States, in Southern California. I’ve targeted San Diego, just because that’s where I was born and raised, as well as a few locations just north of it. In Buenos Aires, Argentina, in Fortaleza, Brazil, in coastal Nicaragua as well as a few different locations around the Panama city, Panama area.

Jason:
Excellent. Well those all sound like good choices as well. What are some of the biggest myths you see? We’ve got all these people out there promoting overseas investing, and Taylor, they make it sound so great, but I know a lot of this is marketing hype, and a lot of it is really myth. What are some of the biggest things that you can bust for our audience? Be the myth buster.

Taylor:
The myth buster, Jason, that’s a great question. I love this question because we hear about the overseas real estate guru, which comes to mind as a Jason Bourne-like character, right? He’s this crazy guy, who’s travelling 50-75% of the time; he’s looking at all these real estate deals and he’s making these huge returns by buying and selling and renting out real estate. It’s so easy that everybody could do it… All you have to do is join his inner circle and he’ll let you in to all his contacts. The fact of the matter is most of these gurus are locked up in some office in some country – I don’t know, maybe Ireland – and they only promote real estate deals that they get huge commissions on. Rarely, if ever, do they buy any real estate. So the moral of the story of the overseas real estate guru, in my opinion, Jason, is to make sure that you’re taking advice from someone who’s done exactly what they are promoting. The question is not how can I buy real estate. To me, the question is: if I buy it, what am I going to do with it once I have it, to make money?

Jason:
That’s a great question. Don’t follow the ‘do as I say, no as I do’ person. Really having real legitimate experience in the field is one thing, and you’ve definitely got that. What do people do with the properties once they buy them? In some of these countries, you don’t really have a great rental market, do you? It’s not a native rental market at least. Is it an expat rental market? What are some of the best things to do?

Taylor:
Well outside the States – I’m particularly talking about Latin America because that’s where I feel most comfortable as I’ve been to these countries – there are surely 2 main ways to make money with real estate. It’s either to rent it out, or it’s to buy and sell. If the idea is that you want to rent it out to make money, it’s a better – and I know you probably don’t like this, Jason – to go the vacation-rental route and I’ll tell you why. In a lot of these countries, if you don’t know the process to evict someone, what if you get someone in and you can’t evict them? It doesn’t do any good. Each State has its own eviction process, and it’s pretty easy to find out what it is, follow it and get somebody out. So, if you’re looking at doing vacation rentals, and again, that’s why I pick certain locations, then you need to figure out ‘Okay, well how am I going to rent it out?’ Am I going to use a local company? Is he going to rent it out? If he doesn’t rent it out, can I help him out by renting it with sites like AirBnB or www.VRBO.com or www.HomeAway.co.uk or www.FlipKey.com, and then let the agent check in and check out. Or am I going to live there personally and then I will do this on my own? I’ll have a vacation rental business – maybe I’ll have my own place or two – and maybe I’ll pick up some other people’s places. Or maybe I’ll do micro sub-letting, where I’ll buy a larger apartment, maybe put in a few extra rooms, and then renting out with great sites like AirBnB or www.roomarama.co.uk, and instead of renting out one place where you either get full or no full rent, you could rent it out per room, where you might charge a little bit less in a rent, but you get more per night. It’s either partially occupied vs. not occupied. Then, of course, if you’re looking at flipping it or buying to sell, let’s say, then you really need to pick markets that can do that. You need to have a strategy of how you’re going to do it. The idea that because you bought it through the agent, that they can then sell it is not necessarily true. You need to have a strategy. If it’s in a country that uses a non-exclusive agreement, then you might use several different agents. You might list it on several local websites; you might list it on international sites; you might sell it at conferences, so you need to figure out if you’re going to rent it, if you’re going to sell it, and if you’re going to pick either of those, have a great strategy first and then talk to people that are doing it. Then you can roll out with a great strategy.

Jason:
Those are excellent points, Taylor. I’m really glad that you seem to be using all of the great tools out there. You mentioned several websites. Of course, AirBnB and those types of websites have really changed the game a lot, haven’t they?

Taylor:
They really have changed the game, and I’ve spoken with the Senior Vice-President at HomeAway, Jon Gray; there’s a fantastic website called Tripping with Jen O’Neal. I’ve had great guests like Jasper Ribbers from ‘Get Paid for your Pad’, who works with sites like AirBnB on how to game the system and how to have your own vacation rental. On a lot of new sites like these, you don’t pay upfront fees; you pay based on performance. You get in the face of some people, and then you get renters come in. It’s fantastic – you’ve got AirBnB, HomeAway, FlipKey – there are several main sites that are really dominating this and making it really exciting.

Jason:
These websites have really empowered owners like yourself and your listeners. They just don’t have to be so reliant on some local person anymore, right? They can go out to the whole world, just as it is when self-publishing a book or a podcast, you don’t have to have some gatekeeper getting in your way – you can just go right to the whole marketplace.

Taylor:
Jason, I think that’s a great point because I like to be in control. I don’t want to buy a place and then hope that some property manager or real estate agent is going to help rent it out for me because they don’t make that much if they’re doing a long-term lease – maybe 10 or 15%, so let’s be honest, they don’t really care if it’s rented or not rented. They care about finding buyers and finding sellers, but they just do the rental thing to facilitate more clients. It doesn’t mean that much to them but it sure as heck means a lot to me. If I have a place sitting vacant, I’m not making any money, so I’d rather make a little bit of money and do a bit of work than have it sit vacant.

Jason:
Very good point. We kind of alluded to it before, when we were talking, Taylor, about the promoters and so forth, and getting one that practices what they preach. Are there any specific questions, maybe just one or two, that you can pose to one of these promoters if you’re thinking about buying in a certain development?

Taylor:
Yeah, absolutely. If I’m looking at buying in a development, and we’re talking about maybe pre-construction, or during construction, you need to be very careful. I don’t care what anyone says – I know from doing it myself and from being on the ground, I know from seeing things that are supposed to get done and never do, you need to be very careful. I put it onto two main categories, Jason: 1. You want to buy from a well-known local developer that has complete developments that you can personally go and see. You want them to have local contacts with governments to get permits in order so they can actually do the construction, and that’s not a bribery thing, that’s just local contacts . Then of course, there needs to be financing so that all deals aren’t done via. cash. They need to have local contacts at the banks to get financing. So that’s one area – a well-known local developer. More recently, there’s a second category that I like to deem a ‘Foreign All-Star’. Of course, I’m not telling people that they should buy in these developments. These are just areas that I think that people could maybe consider and I think that developments really live or die in three things: money, marketing and on-the-ground contacts to facilitate. My foreign all-stars would be people in places, and I’m sure your audience has heard about these people, like Doug Casey from Casey Research, who has a development in Argentina; Simon Black who has a development and then some in Chile; of course in Nicaragua you have Bill Bonner with Agora Inc. that has Grand Pacifica; you have Mike Cobb, who’s the front of ECI developments in several countries, either now or in the future (Nicaragua, Belize, Costa Rica, Panama, Ecuador). In Panama, of course, you’ve also got Lief Simon and Kathy Peddicord. Now, all of these have the 3 main factors – either money, or access to money with their contacts, because they have great publishing businesses. Because they’re in publishing, they have great marketing. That means they already have a client list that they can promote this to, and then they can hopefully help facilitate getting great on-the-ground contacts for those all-important permits that you need to get things done.

Jason:
The people you mentioned, by the way, have a lot of resources. Especially Bill Bonner and Doug Casey!

Taylor:
Right, so who has a bigger list of contacts or reach than these great people? It would make sense then that if any development was going to make it, it would be theirs because they have great contacts. Either they or their partners have deep pockets, and of course, they can then facilitate getting great on-the-ground contacts to get things done.

Jason:
Do you want to mention anything more about specific strategies? Should we talk about a niche? What should people look at? Should they specialize in something? I always want to ask someone like you what’s your favourite market, but that’s probably like asking a Mom whose her favourite kid, if she has a few.

Taylor:
That’s true and I hate to be glib here, but personally, I think for me, the best real estate market is the one that I know best. We so often get caught up in this grass-is-greener way of thinking, or this mentality in overseas real estate that if we belong to several great newsletters, one time they might promote a specific area in Mexico etc. We’re always searching for a grass-is-greener situation, or the shiny new object syndrome. We need to keep in mind, with all due respect to these companies, that they do it for commissions. They make money if you buy. That’s why they promote. So, on top of that, if you’ve never been to Belize, or the Bay Islands in Honduras, how is that a great real estate market to you? It’s not. You don’t know anyone there so it can’t be your greatest market. Let me back this up – you need to pick an area that you like. You need to go to that area, you need to put boots on the ground, you need to make local contacts with real estate agents – not just one, multiples. You need to meet lawyers, banks – can you open a bank account anymore? I don’t know. You have to put all these people in your group of influencers to see how this is all going to play out first. Hopefully this is before you get involved in real estate. It’s easy to get into these things, and sometimes once you’re in it’s hard to get back out.

Jason:
Avoid the grass-is-always-greener, shiny new object syndrome. Be there, have a personal presence. Meet people, shake their hand, look them in the eye, look at the areas and really understand it. You know, Taylor, I heard you on another podcast recently. You were talking about the difference between buying pre-constructed and I think we’ve all heard of that, and pre-completion. I haven’t heard that one before, or at least I haven’t heard someone break it down that way. What do you mean?

Taylor:
Okay, I don’t know how you look at it, Jason, but I really look at real estate. Let’s say you’ve got an apartment with four main categories. You have ‘pre-construction’, which means it’s dirt and there’s nothing there. You have ‘during construction’, which means that you can see things happening. There’s this area of things almost done to getting keys, which I’ve deemed ‘pre-completion’, and then you have ‘key ready’, which is completion. What’s promoted so often is pre-construction, because that’s easy to get people to buy – there’s nothing there yet. I think that’s very risky. You don’t know for sure if something’s going to get done or not; you don’t know for sure if it’s going to take one, two, three or even four years. Of course, during that whole time you have a payment contract that you have to abide by, and because they might take longer or do things the way they’re not supposed to, it’s not good for you but you still have to work with that contract. There’s this thing called pre-completion, and there’s no specific on it, but for me, it’s something less than a year. I can go to an apartment building and I’ll know that this building is going to get done. I can see the floors and the units going in – I know it’s going to go in, it’s just a matter of whether it takes 6, 8 or 12 months. To me, that’s pre-completion. You have out-of-country clients which hopefully you can target, so let’s just use Panama for instance. Let’s say there are people that bought from the US or Canada, they’ve bought a place in Panama City; maybe they thought that they were going to live there and maybe times have changed. Maybe they got divorced, ran out of money, who knows? There are all these things that happen in everyday life. They have a final payment due when they get the keys, and they can’t make that payment – maybe they can’t get a loan, whatever. That is a great person to target. You’re doing them a great service. They essentially would probably like to just get their money back. You can walk in to something that’s like buying at pre-construction, because that’s what they bought it for. You’re walking in when it’s almost complete, you’re doing a good thing for the seller because they’re getting back the money, and you’re walking into a great discount.

Jason:
Yeah, that might really be the opportunity. Maybe during the time that that’s been constructed there’s been some appreciation too, right?

Taylor:
Exactly right. That’s the whole point. You’re walking into the pre-construction appreciation with very little of the risk because it’s just a matter of it getting complete, and then you get to walk in, pay them off and you get a great deal.

Jason:
Taylor, one of the things that we’ve talked about before is the MLS system. Really, that is mostly a United States and Canadian thing. When you look around the world, there’s very little in the way of multiple-listing services. I personally have said that I think that’s a disadvantage, but you think it’s an advantage, and you use it as such. I can see how it might be because the more imperfect any market, the more opportunities to exploit that imperfection and be the more knowledgeable buyer and take advantage of that, right? How do you use not having an MLS system to your advantage?

Taylor:
Jason, I think you nailed it right on the head right there. If you have an MLS, like the States, it’s fantastic. You can go onto www.realtor.com or www.zillow.com, or any of these great sites, but everybody has the same information at their fingertips. Then it’s not really worth what you can buy it for. It’s worth what the appraiser says its worth, based off of the lowest three comparables in your neighbourhood. Even if you’re a seller and you did a great job and someone wants to buy your house for a higher price and they have to get some of it for financing, the bank just might say no because the other people couldn’t sell it for anything more so we don’t think yours is worth anything more. The great thing about going in to markets, let’s say in Latin America, that don’t have an MLS is that there’s a caveat. If you do work, if you get there and you get on the ground and you make contacts and understand some of the values, that’s how you can take advantage of distortions in the market. You know what things are selling for, you might find an owner that either doesn’t understand the market, they might be out of country or they might need to sell (there’s a lot of reasons why people need to sell), then you can find great deals. It’s not worth what an appraiser says it’s worth; it’s worth what you can really buy it for.

Jason:
That is where the huge opportunities come in. If you look on Wall Street, that’s a very perfect market in a sense, because the stock exchange dictates exactly the price that stock is going to sell for. It’s not like you’re going to go in and say ‘I want to buy this stock in Apple and want a better deal’. No, you’re going to pay the currently traded price, and there’s no ifs ands or buts about it. When the market becomes imperfect, as you mentioned, it does open the door to a lot of opportunities, but one caveat is that you’ve got to know what you’re doing, you’ve got to have familiarity, you’ve got to have connections and a lot of the time, you’d got to have boots on the ground, right?

Taylor:
I think at some point you have to put boots on the ground. Does that mean that you’d have to pick, let’s say Costa Rica, and live there full time to understand it? No, as you get more savvy and you’ve been to a few different locations and you’ve seen some developments.. I mean, it all depends.

Jason:
You kind of see how it works.

Taylor:
Yeah, then you can see how it works and if you’ve been watching a few ocean-front, ocean-view buildings and you know ‘If this goes for 1200 a metre, or 1500 a metre, or whatever it goes for, then you’ll know because you’ve been there. If you’ve never been there and someone says ‘Hey, there’s this amazing deal, you can get in for this building’, and you buy it, and then you figure out, oh yeah, that wasn’t ocean-front, that was a city-view unit, so I overpaid for the unit that I shouldn’t have got.

Jason:
Another thing that’s different in a lot of other countries, when you’re looking at international investing and especially in Latin American countries, is they do non-exclusive contracts with the real estate agents. You use that to your advantage as well, right?

Taylor:
I think so. I think this is like going off of the no MLS strategy. This is one of the things that if you’re on the ground and you work hard, you can use it to your advantage. What does this mean? This means that if you’re going to be buying, you can use different agents. You go to these agents and say look, here’s exactly what I’m looking for. I want an apartment at this price, here’s exactly what I’ll pay, I want 2 bedrooms, 2 bathrooms, city view/ocean view, whatever it is, you can go to multiple agents. Of course you can do that here in the States or Canada, or a lot of other places for a buyer’s agent, but if you’re listing it, as a seller’s agent, most of the time, it’s becoming a little bit more familiar now in markets like Panama, Columbia, Costa Rica, where there are more agents from the US and Canada, and who will only take clients with exclusive contracts. If you work with ones that don’t, and 90% don’t, this means that you could work with multiple agents at the same time to sell your property. On top of that, you can get some strategies to get those agents working. Just because someone says ‘Oh yeah, I’ll sell your property’, it doesn’t mean that they’re going to sell it. It just means that if and when they have a buyer, in 2 months or 6 months or 2 years, they might sell it. You want to contact the agents. This might sound weird, Jason, but you might want to call the agents once every couple of weeks. You want to email them, you want to stop by their offices, you want to be known and to work with the agents to get things sold. That’s how you successfully buy and sell real estate, and how you can also rent things out, just by being there, being on the ground, and hustling and working hard with the agents.

Jason:
Just like anything in life: you’ve got to pay attention, you’ve got to hustle, and the squeaky wheel gets the grease, as the old saying goes.

Taylor:
It’s true, and Jason, if you don’t mind me saying; this is why it’s also great when if you have a target. One way to buy real estate in the US is when people get divorced, or if someone dies, or those kind of strategies to target those types of sellers. In Latin America, for instance, you have a lot of sellers living in the States or Canada that, as examples, might live part-time in Belize, Costa Rica or Panama. They’re not there full-time, so if something comes up in their lives, they’re happy to get rid of those places, and maybe at a discount. To them, they don’t care as much because it’s not their primary residence. That’s a great niche to go after. You’re doing them a service because they’d just like to get whatever money they can out, and leave. Then you’re also doing yourself a service because you’re walking into a great deal.

Jason:
Talk to us, Taylor, if you would, about financing. For a lot of people, the financing really is the linchpin. The financing markets in these countries aren’t as well-developed as they are in the US, but there are still some options, right?

Taylor:
There are still some options, but I would say number 1, Jason, unfortunately, you need to come with your money for the most part. What does that mean?  It means if you have a piece of property in the States, you can do a cash-out rebuy, you can do a second mortgage, you can do a HELOC, you can do more aggressive things like getting a cash advance on a credit card. If you have a car that’s debt-free like I had one time, you could take out a small loan to maybe make some payments overseas. Of course, you could do a self-directed 401(K), you could tap into brokerage accounts. I’m not saying that you should or shouldn’t do these – they’re just options for people to get cash available. If you do a 1031 tax exchange, it’s only for domestic for domestic and foreign for foreign, so it’s not like you could sell your place in Arizona and do a 1031 tax exchange for a place in Costa Rica. I’ve also looked around significantly to try and find someone who handles a 1031 tax exchange foreign for foreign, and I can’t find one. I don’t know if you know of one, Jason, but I can’t find one. If we’re talking about overseas now, there are a few options. Looking for countries like Panama that have a good banking system that you can get mortgage loan from is good. It’s getting harder and harder for people from the States, for many reasons I don’t really want to talk about, but for most of the other parts of the world, they can walk into banks in Panama and still get mortgage financing. Whether you get it from GlobalBank or HSBC, there are several banks. It’s getting tougher and they want more of a down payment, but it’s definitely possible. In certain regions, like in Central America, I know a bank – again, I don’t know the correct word but it’s like an affiliate of ECI and Mike Copp’s developments  – called Caye Bank, which is based in Belize. I’ve never done a loan with them, although it’s supposed to be able to. They do this in Central American countries like Belize and Costa Rica where supposedly if you put down 40 or 50%, you can get financing. Developers will sometimes do financing whereby you put down a small percentage and pay a small percent per month, and there are more expats now that understand this type of financing. If you have a US agent that understands it, you might be able to find those, but let’s be 100% honest here and say if you don’t bring your own financing, unless you want to buy in a development that’s being built that might not be a good idea, on payment terms that you might just have to do it with cash.

Jason:
You’re just going to have a lot more options with cash because that’ll free you to buy wherever you want. I’ve been to Caye Bank a couple of times, I’ve actually visited them directly and physically been in their office, so I know that they appeal to a lot of expats and foreign buyers as well, so that’s good. Taylor, with all your experience in this, and you’ve obviously got a tonne of knowledge about it, have you had any real problems, mistakes or set-backs?

Taylor:
[Laughs]

Jason:
Is it all rosy?

Taylor:
Jason, only one? It’s all mistakes and set-backs! Really, for me, I’m a pretty gung ho kind of guy. I feel like I can do a lot of different things. I’ve never been extremely wealthy, so the amount of money that I’ve had at any given time I try to strategically grow and make more money. For me, it’s been buying too many apartments or lots pre-construction. I have to abide by a contract that the developer gives me, although they don’t necessarily stick to their own terms. For instance, one that comes to mind is in Panama City. I bought in an area of Panama City called Casco Viejo, which is the old heritage site. I was buying in a small development, and these have to be developed to certain standards. It’s the 1920s-1930s Colonial age. It was a small building, something around 9 units, so they said we’ll get this done in 9 months. I thought ‘9 months, that’s pretty ridiculous, let’s go’, but they said ‘9 months, 9 units bla bla bla’. A year comes and goes, two years come and go, three years come and go, and of course, during this time I want the place. I wanted to live in the place because it’s a fantastic location, it was an amazing place, and I have to make payments. I didn’t really want to flip it or try and sell it; I wanted to hold it. It would have been great for rental income even if I didn’t want to live in it. Four years come and go, and Jason, let’s be honest, during this time, I only got information because I was living in Panama so I could walk to their offices, but otherwise, they never returned any emails or phone calls – that’s just the way it is. You could be calling their cell phone and they just don’t pick up. Five years later – so it’s gone from 9 months to 5 years – it still wasn’t done and I said ‘I think it’s probably a good idea if I sell it’. It was not a good situation but I turned it into a good situation. For me, I think being too leveraged and being too aggressive has been my number one downfall.

Jason:
A lot of people, and we have clients that do that, that get really upset about delays in construction when they’re buying properties from time to time, but a lot of the time those delays can really work for you because you’ve locked up that property at a given price and it can be appreciating, right?

Taylor:
Yes, I think that’s a great point, and let’s be fair too. If I’m simply trying to paint or do a small remodel on my house and I think it’s going to take 2 weeks, does it ever take 2 weeks? No, it takes a month or a month and a half, and that’s just on one place. Imagine if you had to do a 10-unit building, or a 20-unit, or a 50-unit building, where you had to get these permits and everything. I can see why it takes longer. I would just wish that there was more communication with a developer and with their clients about what’s going on, and being more truthful on time frames.

Jason:
Right, absolutely, everyone wants that for sure, and that’s a very reasonable expectation of course. We talked about the difficulty there. What about the other side of the spectrum? What about a big success that you’ve had? You’ve made some enormous returns on some properties, right?

Taylor:
I have done okay, and why don’t we stick with the Panama theme. What’s common in Panama is the old US bases are reverted into areas back to the country, and these are beautiful spaces where you have redone houses, there’s grass, there are parks. That might sound odd. If you’ve been to Panama City you’ll know that that’s a big deal because it’s kind of a concrete jungle there. There’s this area that’s right close to the US Embassy, and actually, the room was called Embassy Club. It was one of these deals (again, pre-construction), where I was able to put down, I think it was 20%, and it was something like 5% down, 5% six months later, 5% six months after that, and another 5% six months later. I put down 20% over staged payments, and this particular development, even though it was huge, they went building by building. It got done fairly quickly in something around 3 years or so. At the close, I was able to get an 80% loan, and within a few months doing some of the strategies I talk about, where I work with a lot of different great agents and I put it at a price and I sent them pictures and videos, I would call and email them, I was able to sell it within a few months and make something around 300% cash on cash return for that particular one.

Jason:
300%, congratulations! That’s phenomenal! Just try doing that in a non-real estate asset! It’s just so awesome, congratulations. One of the big opportunities besides just the monetary opportunity or the lifestyle opportunity with international investing that I’m particularly interested in is having a second passport, dual citizenship. History has shown us, Taylor, that you just never know when something like that may come in handy. What should people know about that, or what can you tell them about those kinds of opportunities?

Taylor:
I couldn’t agree more. For me, coming from the States, you never know. There’s nothing wrong with the States, I don’t believe that the dollar is going to go to zero, I don’t believe the world is going to end tomorrow, but you never know what’s going to happen, and there’s nothing wrong with being prepared and maybe getting legal residency someplace else. Ideally, that would lead to citizenship. Personally, one of the reasons I went to Panama is because it’s supposed to have a pretty easy route to getting legal residency. I’ve tried it in Panama, in Uruguay, in between Brazil and Argentina, and I’ve also tried it in the Dominican Republic. Honestly, sometimes what’s legal, or what a lawyer says it takes to get residency or citizenship doesn’t necessarily mean that’s what’s going to happen. I think it’s very important for me. I’ll be honest, I’ve tried it in Panama for years, I’ve spent thousands and thousands of dollars, and every time I was on the right path, there was a change in government, there was a change in procedure, and then they wanted more and more documents, so I said ‘Okay, I’ll try something else’. I was living in Panama, trying Uruguay, because I like to call it the poor man’s residency and citizenship. I tried it there and months turned into years, thousands of dollars later in lost paperwork and flying back for more paperwork and for fingerprints so in the end I said ‘Okay, well this isn’t working, maybe I’m doing something wrong’. I’ve tried it since in the Dominican Republic, and I will say that I have my permanent visa in the Dominican Republic seeking citizenship because I just want to have one just in case. But then let’s be honest, I don’t know if having a second citizenship in the DR is all that great! Since I’ve gone this way, I’ve been doing this for 8 years now.

Jason:
How long will it take for that to lead to an actual citizenship in the DR?

Taylor:
That’s a great question. I started, and I’m still in it now. It went something like this, and don’t quote me because I can’t remember exactly, I applied, did all the paperwork, turned it in, met with Immigration, had the lawyer, something around a year later, I had a temporary visa. I had to go back to the country to get that, and then I had that for two years, and then I got my permanent visa, which I’ve had for 2 years now. From then, I could apply for citizenship. It’s changed now though and is completely different. One thing I want to point out about this – this is just my trials and tribulations, I know. One of the most important things for this, I think it’s fantastic, but make sure that you deal with a lawyer and you ask them not ‘How do I do it?’, but instead you say ‘How many people have you done it for?’ You want to know if they’ve completed it. Everyone is always in the process of it. Everyone’s always doing it, but you want to know who’s got it completed. That’s the big question. It rarely happens, if you’re seeing a citizenship in a foreign country, unless you have a lot of money and go the economic route.

Jason:
The other thing is that you’ve really got to be sure that the lawyer isn’t a crook. There’s certainly no shortage of crooked lawyers in the United States and here, arguably, they’re more regulated. In other countries, I assume, it could really be the Wild West, right?

Taylor:
Well Jason, I think that’s a great point, but also to be fair, dealing with the Immigration offices is a pain. They don’t know what they need, they’re constantly changing – there’ll be a new President, or new rules and regulations, or new people. You have yourself, you have your own documents that you need and all the ridiculous things that you have to do. Then you’ve got your lawyer who’s usually a bottom lawyer in their firm because no-one wants to deal with immigration, and then they deal with, let’s be honest, lower level government employees at Immigration. Their rules are also always changing, so it’s like you’re in a minefield of paperwork that’s going back and forth, and it just gets to be expensive. Everything has to be translated and notarized and apostiled.

Jason:
With all these promoters out there, I’d just like to close by asking you about this issue, Taylor. That is ‘What’s the most overrated country that’s being promoted?’ You’ve got all of these people out there talking about everything from South America, Central America, Europe.. The whole world is up for grabs, which is great because the world is our oyster, as the old saying goes. There are lots of opportunities, but there’s also just a lot of hype. What do you think it the most overrated country?

Taylor:
[Laughs]. Jason, you don’t mess around with your questions, buddy.

Jason:
That’s a loaded question, and it’s tough to pick.

Taylor:
It is tough to pick, and I’m going to stick with what I know with Latin America. It’s a country that I’ve bought and sold a few apartments in, and for me, the country would be Brazil. Areas like Fortaleza and Rio and Sao Paulo and a lot of the beach areas have always been highly touted, but let me give you my perspective on why it is. Others might think differently – this is just from being there. I’ve lived there for up to 10 months at a time, but I’ve been there for a long time over the last six years, so I kind of know. Number 1: from the States, it’s a long flight. Not only is it a long flight, but it’s also very hard to book flights to and from Brazil. It’s almost like it’s its own island in Latin America. Of course, they speak Portuguese while the rest of Latin America speaks Spanish. Portuguese and Spanish, by the way, is not the same thing. If you’re fluent in Spanish or you’re fluent in Portuguese, then you can communicate, but if you were a poor man Spanish speaker, like myself, you don’t understand anything in Portuguese. Unfortunately, which you see in a lot of countries, but this is especially true of Brazil is that you have a big upper class and a big poor class, so there’s not much in the middle. You can have a beautiful beach-front apartment that’s locked behind big walls, and then directly behind you are the shanty towns. In my opinion, from a lot of countries that I’ve been to, it’s extremely expensive. They use the the real versus the peso or dollar, but if you look at the real vs. other currencies over the last couple of years, it’s constantly up and down. It’s just very expensive for things like gasoline. I know it’s energy independent, but I found out, Jason, that doesn’t mean it’s cheap. When you have expensive gasoline, you have expensive food, you have expensive air conditioning. Everything’s expensive because everything goes by gasoline. If we’re talking about more real estate things, it’s very hard to wire money (much like Columbia) in and out of the country. When it comes into the country, that’s fairly easy – they want to make sure that it comes from the person that has their name on the contract, but it’s very hard to get money out of the country. Obviously, if you’re trying to buy and sell real estate, that makes it very very tough. For the most part, you cannot open bank accounts at all as a foreigner in Brazil. What if you bought an apartment and you have a rental income, where do you put that extra money? You can’t get a bank account.

Jason:
Right, what do you do?

Taylor:
There’s this thing that I found out, Jason, the hard way – when buying in Brazil a pre-construction (some countries call it off-plan), which is the INCC, when you factor in a currency that’s constantly fluctuating – and I know they all do, but when you look at Brazil’s, it’s pretty ridiculous. When you’re buying pre-construction, it’s pretty standard in your contract, it says ‘If our construction costs go up over 10%, your purchase price will go up 10%’. That’s pretty standard on all contracts in Latin America. That’s kind of known. With Brazil, that’s not how it is. In your 300-page contract that’s in Portuguese and which no-one’s going to translate for you unless you pay thousands of dollars, there’s a thing called the INCC. It’s a monthly inflation index. Everybody always says it’s tiny, and again, we’re talking about real estate-related things, but it’s not. It’s something around 8-10% per year. If you’re buying an apartment, and it takes 5 years, compounding interest at 10% per year, you’re talking about a lot of money.

Jason:
You definitely are. That’s a significant deal. So, Brazil, you just can’t really get a bank account. You didn’t mention crime issues, by the way, which Brazil’s kind of known for, unfortunately. I suppose that’s another deterrent and making it overrated, but are there other interesting things?

Taylor:
I couldn’t say too many bad things, but you can fill in the blanks, go ahead!

Jason:
[Laughs]. It’s just the crime problem. I’ve been to 71 countries, but I have not been to Brazil. It’s on my bucket list and I really want to go. I’ve got a Brazilian client who’s been buying US properties. He retired from a big tech company and is living there with his family all summer. I’m getting reports from him, and I hear Rio is certainly a very fun place, but maybe some of these places, like you mentioned with Brazil, maybe it’s better to just be a tourist and visit and enjoy it, and get all the benefits without having to buy anything. You can buy things elsewhere, and it sounds like Panama has some good opportunities as you mentioned, and some other countries as well.

Taylor:
Yeah, I would agree with that, and if you don’t mind me saying, I forgot to mention this before but I would like to. There are a lot of great spots to buy but I agree that maybe Brazil isn’t one of those. Maybe Mexico might be a great place to visit and you don’t necessarily have to own real estate there. The ones that I personally like, I would say Panama City, Panama or different areas of Panama. I’m a huge fan of Medellin, Columbia, I think it’s absolutely fantastic, it’s beautiful, there’s a lot of things going for it. Another one that I like that I don’t hear many people talking about (besides random ones like Suriname or French Guiana or ones that we’re never going to go to) is Lima, Perú. I really love Lima, Perú. We talk about Mexico for food but I think Peruvian food is awesome. To me, the food is good.

Jason:
Yeah, I hear Lima has phenomenal food, and I’m happy to say I will be there next month. I’m going to Perú to do Machu Picchu and I’m looking forward to it.

Taylor:
It’s fantastic. I’ve done Machu Picchu and finally, Jason, there’s an area of Lima, Perú, if you have the chance, called Miraflores. It’s the area that you want to go to, it’s right on the cliffs, right about the ocean, around Parque Kennedy and it’s absolutely beautiful. You have amazing food, it’s great weather. It never rains in Lima because it’s arid and there’s still great weather. You have a lot of sun and it’s on the cliffs, overlooking the ocean, it’s absolutely beautiful.

Jason:
It sounds stunning. Taylor, this has been a fascinating discussion. You are so well-versed in this stuff and it’s great to hear someone talk about it who doesn’t have an agenda. At least not one that I know of! It seems like so many other people that I interview on the show, they’re just pushing and touting their one thing. I just loved this overview, it was very valuable to me and I’m sure to our listeners as well. Give out your contact information and tell people where they can find you and learn more about you and your great podcast.

Taylor:
Absolutely, my main website is www.internationalrealestatelistings.com. From there you can find my Overseas Property Insider podcast, and of course I welcome all and any emails at: [email protected]

Jason:
Well, Taylor White, thank you so much for joining us today and thanks for the great insights.

Taylor: 
Thanks, Jason.

Outro:
This show is produced by the Hartman Media Company, all rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com, or email [email protected]
Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network Inc. exclusively.

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