Investing out of state/country Puerto Rico

[Brandon Morgan]

hey all I am new to Real estate and have been trying to buy a property for the last 2 years but it is not working out. I live in the New Jersey New York area and prices continue to climb and they do not look like they are falling any time soon. Recently I have been thinking about investing out of the state/ country. I have been thinking Puerto Rico or even Mexico could be a good idea. Does anyone have any experience or advise with this? I make a little over 100k a year and have 50k currently ready for a down payment. any insight would be helpful. 

[Sean Ross]

@Brandon Morgan, one other item to consider if you're making long-term plays:

Property in Puerto Rico is not considered "domestic U.S. real estate" for purposes of 1031 exchanges (unlike the U.S. Virgin Islands, for example).  This shouldn't be a the key determining variable for you, but it's worth noting that you couldn't sell a property in Puerto Rico and do a 1031 into another property in, say, Florida or New York. 

Now, you still could do a 1031 exchange out of Puerto Rico and into a property in any other foreign location, such as Mexico.  

Bottom line is that you may put yourself in a situation where the best way to maintain your tax efficiency is to keep your investments foreign for the long term.