LEARN HOW TO INVESTGUIDE FOR BEGINNERS: Module 11
Michael Santos Presents
REAL ESTATE INVESTING STRATEGIES OVERSEAS
Real estate investment oppportunities in Belize, Costa Rica, the Dominican Republic, and The Bahamas.
Get Started Investing in Overseas Real Estate
Have you considered investment opportunities overseas? Real estate investing strategies overseas can bring outstanding returns, even for beginners!
Shrewd investors invest where they can earn the highest rate of return, with the least amount of risk. Sometimes, that means looking outside of the United States.
In earlier chapters of the Introductory Guide to Creating Wealth by Investing, I revealed why understanding business can make you a better investor. I also offered tidbits on the stock market and real estate. My comprehensive course offers much more information, in bite-size pieces.
The remaining chapters of this course will provide examples, revealing how adhering to those principles helped my investment career. I’ll share the thought process behind my investment strategy, showing why real estate investing strategies overseas makes more sense to me than investing in the United States.
Make a decision on whether your investment strategy should include overseas real estate.
How I started Investing in Real Estate Overseas
As described in previous chapters, I began investing in the San Francisco Bay area when I concluded 26 years in prison. In 2012, real estate values were still depressed from the recession. The tough market allowed me to begin acquiring properties for little-to-no-money down, using unconventional financing tactics.
Fortunately, the strategy of acquiring properties with leverage worked well. As the U.S. economy improved, real estate values soared. My success in real estate was largely a matter of timing.
Readers who would like to see financial reports that show each transaction can view the following link:
By early 2018, I built a solid portfolio of performing real estate assets. Those assets exceeded $3 million in value. Allowing for debt levels, my equity in those assets exceeded $1 million.
Earnings from employment alone could not have allowed me to build $3 million in assets, or $1 million in equity, within five years. I wanted to continue acquiring assets to build more prosperity. Yet by 2018, markets had changed.
Be a Disciplined Investor
As a disciplined investor, I knew the change in asset value meant that I had to reassess my investment strategy and tactics.
- Was it more likely for asset values to continue rising at the same rate?
- Were there risks that asset values could fall?
No one had a crystal ball that would show us how the markets would perform. Still as investors, we are responsible for using all of our critical thinking skills. We’re responsible for the decisions we make.
What strategy should we pursue when preparing for our financial security?
Consider all of the factors we discussed in The Introductory Guide to Creating Wealth by Investing. Then make a decision that will work for you.
When I concluded that markets had changed in the U.S., I chose to find new markets. I looked for the same type of investment scenario that I found when I began investing. I began looking for opportunities where I would find potential for increased valuations over time, with minimal exposure to downside risk.
RESEARCH YOUR MARKETS
As an investor, my research suggested a lot of risk in the U.S. market, including the following:
- In markets like the coastal areas of California, acquisition costs of real estate did not match potential for rental income.
- Major stock-market-index averages soared to record highs without a meaningful correction, putting price-to-earnings ratios out of whack. The stock market had a big influence on the entire economy, and I could not ignore what the market was telling me.
- Overall debt levels in the U.S. concerned me as a citizen and as an investor.
- The student-loan debt levels suggested that too many young people were carrying too much debt. Student-loan debts threatened prosperity for an entire generation. By servicing student-loan debts, young people would not be able to invest in their future. Wages would not keep up with their debts.
- Retirees could not afford to live in the U.S. on their fixed incomes.
- Political turmoil in the U.S. markets concerned me as a potential disruption to the investment climate. A change in political leadership could lead to policy changes that reversed economic growth.
For those reasons, I began looking for new investment opportunities overseas.
THE RESERVE: BELIZE
I visited The Reserve, a 14,000-acre development, with three-miles of coastline on the Caribbean, in Southern Belize. It is an exquisite development with more than 1,500 home sites. Americans who want to retire in paradise purchase home sites at The Reserve. Then they build their dream homes in the amenity-rich, master-planned community.
Amenities at The Reserve include:
- A 250-slip, deep-water marina that can accommodate yachts of up to 150-feet.
- A private beach club on the Caribbean.
- A restaurant and bar at the beach club.
- A restaurant and bar at the marina.
- Hundreds of acres reserved for organic gardens.
- Ten thousand acres reserved as undeveloped land for natural wildlife.
- An equestrian center for horse lovers.
- A private island reserved for owners at The Reserve.
- A debt-free development with more than 1,000 individual owners.
- Only a two-hour flight from major U.S. airports like Miami and Houston.
- An airstrip, fly-in, fly-out community with aviation hangers for plane owners
When I visited The Reserve in early 2018, I envisioned an amazing investment opportunity. For less than $500,000, I could build an asset that would generate more than $5,000 each month in income. Further, when I projected valuations for five years in th future, I anticipated the asset would grow in value. A property that I built for a total cost of $500,000 in 2018 would likely be worth more than $800,000 by 2023.
INVEST WHERE YOU CAN GET THE HIGHEST RETURN
That was the type of investment return that appealed to me. Those investment opportunities were not as readily available in the United States.
Other factors bolstered my confidence in the development. Primarily, I would be investing at a perfect stage of the development. The developer had already invested more than $100 million to build an operational marina, a beach club, and the other amenities mentioned above. With millions of dollars in investment capital pouring into the development, I saw opportunities for upside. That further investment would increase value for all owners.
Besides continuing investment from the developer, owners of home sites were investing tens of millions of dollars to build their dream homes on properties they purchased. As they built out the community, I envisioned the value of all home sites increasing.
And then there was supply and demand. The developer had already sold 1,000 home sites. On average, the developer sold more than 20 additional home sites every month. Once the developer sold all of the home sites, prices would increase in value.
From my perspective, The Reserve offered enormous opportunities for upside, with minimal risks for a decrease in valuation levels.
NEWPORT LAND GROUP
When I began negotiations with developers at The Reserve, I learned more about the organization. Besides Belize, the developers were launching master-planned communities in The Bahamas, in the Dominican Republic, and in Costa Rica. I felt aligned with the developers in our assessment that there were better investment opportunities overseas than in the United States.
When we invest, we’re expressing a degree of confidence and trust in both the investment project and also the people behind the project. Feeling confident that the developers could execute on their plan to increase value, I agreed to invest with Newport Land Group in a new development in Costa Rica.
FUNDING ALTERNATIVE INVESTMENTS OVERSEAS
To fund that investment, I used both conventional and unconventional financing, as follows:
- Through mortgage brokers, refinanced other properties I owned to generate liquidity that I could invest overseas.
- I used unconventional financing by raising capital from investors.
Through those tactics, I raised $1.4 million of my own capital to invest. Further, I raised $1.95 million from other investors, bringing a total of $3.35 million in liquidity to Newport Land Group.
By pursuing this strategy, I boosted my portfolio of real estate assets to more than $5 million. Then, I negotiated a deal with Newport Land Group to leverage my investment with them so that I could acquire 27 home sites at The Reserve in Belize. Over the next five years, by 2024, I’d continue executing my strategy. The new goal would be to build a portfolio of real estate assets worth more than $10 million.
I’m writing this section of The Introductory Guide to Creating Wealth by Investing in mid November of 2018. Participants will be able to track the progress through the investing section of my website at MichaelSantos.com. They’ll see that I’m publishing monthly financial reports to show progress, and creating opportunities for investors. Those who have an interest can choose to participate with me in one of several ways, including:
1. Investing in real estate with no-money down.
2. Investing capital to generate a fixed income, with 10% annual returns guaranteed by real estate.
3. Investing capital to participate in an equity venture.
I never ask anyone to do anything that I’m not doing, and I’m 100% transparent. In the following chapters I’ll present case studies. Through those case studies I’ll reveal scenarios that I’ve presented to investors who asked for information about investing with me.
As others begin their careers as investors, I hope they’ll find this guide helpful. Please connect with me and share your experiences. Should you like, can learn more through my YouTube channel, my Facebook community, or through updates I publish on my website.