Can anyone please help recommend a strategy for expats overseas?

Question

I'm just getting started in the world of real estate and need help selecting a strategy.

I work on a military base in the U.K. and so far all the strategies I've come across like wholesaling and rehabbing look borderline impossible long-distance.  I like the idea of buy and hold but I only have about $40k to start (plus another $50k I could tap from my TSP).  Unfortunately it looks like you have to put 25% down on non-owner occupied buy and hold rental properties.  Which means I could only afford like 1 duplex... and then sit around for another 5 years waiting to save up another downpayment?  That doesn't seem like a very efficient strategy.

If anyone could lend some advice on how to create a faster plan I'd be hugely appreciative and more than willing to buy you a pint next time you're in merry England =).

Cal C. · Answer

@Jack Gray

yeah they are pretty biased.  I looked last night to see what my old property is worth and it is 2.5 times what I sold it for 15 years ago, plus the exchange rate would have been more favorable too.  I was thinking more in terms of personal residence for you, especially if you are a DAC.  BTW if you get a chance please say hi to Baffa and Zitka for me.  I'm sure I know a lot more people there, but I knew those two pretty well.  One of them got me a nice reserve gig at the IZWG and I played a lot soccer with the other one.

As far as stateside investing is concerned, is there anywhere you come back to tdy regularly?  One of the reserve units affiliated with the Jac?  NIMA? Big Daddy (NSA)?JCS J-2? There are lots of people on here from Atlanta, Chicago, and DC/Baltimore.  From reading the posts on here, it seems that Cleveland, Indianapolis, and KC seem to be doing pretty well for rental returns.  I'm not sure you are going to get much appreciation in any of those places.

As in my first response, I think you should consider looking hard at areas you have already lived in.  You already have a knowledge base of what areas to avoid completely and that can be extremely helpful in avoiding problems.  At the very least when you do decide on somewhere check the crime stats and livability on some of the apps available to do that.

One of out of the box idea, is investing in Spain.  Really easy to get to from Stansted and the prices are pretty cheap right now.  That would be one of those places to buy when others are running away.   Plus it would be really nice to have a pied a terre in Barcelona.

Elizabeth Colegrove · Answer

@Jack Gray

My husband is military, navy. We buy all over the country. Our speciality is higher end properties. Charleston south Carolina I have a broker that does 15% investor loans, but yes you are going to suck alot of your down payment. Personally we buy single family homes and are on the baby step plan. Yes it is slow and steady, but if all goes well we should have 10 houses in less than 5 years. That's with a 16 month period of me unemployed. My advise is to just get started. You would be surprised about how once you get going things continue to move forward

Jay Hinrichs · Answer

@Dawn Anastasi

as a foreigner he will not be able to get regular bank financing on non owner occ .. 35 to 50% down at 8 to 10% interest with points and closing cost adding another 10% to the cost of funds up front .... Its very risky for him to think he can buy rentals here in the price points he can afford and make any meaningful return He can buy into GB real estate deals and make 6 to 10% return very safely and not have to take the tenant risk we know all to well with US rentals in the mid west and at those price points.. It would be one thing if he could afford a nice A or B class multi that can perform but the properties he would no doubt end up with are risky they just are.. It could work but he could also lose it all like we see so many doing.

Dawn Anastasi · Answer

20% is what you need typically for a down payment as an investor (non-owner occupant).

So if you bought 2 duplexes at $80,000 each, then you'd be needing $32,000 ($16,000 each down payment).

That would leave you with <$8,000 to bank into your reserves (assume you had closing costs above).  You can then also hold back all the cash flow from the duplexes into an account to build up to a down payment on your next one.

Micki M. · Answer

@Jack Gray Find yourself a good partner - an investor friendly real estate broker who understands long distance investing would be a great on the ground ally.  So many people here invest out of state, it really isn't a big leap to invest from out of country, particularly when you're just working overseas temporarily.

Kevin Cook · Answer

I applaud your effort to get going, @Jack Gray . Have you considered leveraging your initial cash with a faster-moving instrument to build investment capital? There are a few great resources for this. As an investor in Florida I would be much more comfortable in the paper market instead of the actual exchange of property. I really like your ideas, @John C.   , @Mike Hanson  and @Simon Rich  . I don't doubt that following a simple strategy in a specific market would yield great results. All the best on a great start!

Mike Hanson · Answer

Hi,

Admittedly new to this Bigger Pockets, but it's a great tool and very underused in the UK, hopefully we can change that though.

It's great to see the opinions and thoughts of those from outside of the UK on the property market in this part of the world - as Jack has suggested there are certain dilemmas when looking to invest in the UK, but I think with further insight into the market and with the guidance of the right people risks can be reduced.

Property will always continue to be a valued addition to any investors portfolio, many of the comments here are right in saying that there are various options with auctions, property brokers, clubs etc - each with various benefits and risks, DD is always important for any investor.

With a few decent property brokers who offer BMV packaged opportunities, these can be interesting, especially with adjustments in lending criteria there are some very good deals available to UK and non-UK residents, naturally though ROI's vary and being a landlord in the UK isn't as bad as some may suggest.

There are many opportunities in the UK and mainland Europe with Germany, Switzerland, and Spain just a few to mention. With a number of credible groups also offering attractive property related products that include loan notes, property bonds and also income driven products such as self-storage, student property, retirement homes. (For those who are into more exotic products even plots in cemeteries!)

These may prove interesting for those with less capital whilst also reducing exposure to borrowing costs at the early stage of a Property Investment portfolio.

Good Luck with the hunt Jack and if anyone requires assistance or insight then feel free to contact me and happy to connect people

Best

Mike

John C. · Answer

Hi Jack,

I live in Ecuador and invest from out of country several time every month. Moreover, I am not even a US citizen and do not need to be. Although, I do have to pay my taxes to the IRS like everyone else who makes money in the US.

There are many types of property investors and I am just a buy and sell by the numbers type. The buy/hold/rent type of investment is not for me at the moment because it is a tough market with little profit potential. These types of investors know what they are doing, specialize in it and do it welI and I take my hat off to them because it is not easy. I normally sell to the these types of investors and I am grateful to have them in the market.

For me, I see far more profit to be made in simply buying and selling real estate by the numbers.

I work across 11 counties in Florida (including Tampa) none of which, I have ever lived in, worked in or even visited much. I treat property as just a commodity like any other, buy low and sell high. My objective is to turn over properties within 90 -120 days which  allows me to re-invest the same funds 2-3 times per year. Working this way results in an average annual return of better than 60% in a bad year. Consider how long I would have to buy and hold a rental property to make 60% how much work and effort involved in managing the property.

For my type of property investment, you need certain and specific skills. Some of these are;

- the ability to be able to find good acquisition target properties.

- the ability to research and evaluate properties reasonably accurately yourself. (there are ample tools to find and research properties online without the necessity for travel).

-  You need to have established and maintain contacts, agents or even family members in the counties that you have targeted (tampa in your case) so that you have boots on the ground to inspect properties, to confirm your appraisal and to give necessary feedback on the conditions of the property affecting market value before you buy. (I have an established network of agents for this).

- you need to have the right perspective, to treat property only as a commodity and only be interested in the numbers. The condition of any property should not preclude you from buying at a price that will make you a profit, the only key is in determining the correct price. In fact, to make money you need to be looking for properties that are not up to standard, that need work and won't pass inspection because these properties are the gems that cannot usually can't be sold retail. Avoid perfect properties as they are able to be sold retail only and therefore are almost impossible to make any short term profit on unless there are exceptional circumstances. Investors like me, just work the numbers, we keep it simple with no emotional attachment to any property, town or place, that is the only way to play.

- then finally, you need to have the confidence in you research and ability to make your first purchase.

To buy your first property after you have done all the necessary research and have all of the necessary information confirmed by your boots on the ground, you only need to formulate accurate offers based on the formula for profit that you have established. Unless your are buying at an action, offers are also just part of the numbers game, some will be accepted and some will not.

Provided that your research and information is accurate, you have the right profit formula and strict to it, then you will make money. Get the numbers right and you must win.

No matter where you are in the world, as long as you have internet, then there is no reason that you cannot do this. The hardest work is finding the best deals to buy. You can find them by yourself, you can setup agents that will bring you deals, you can work the auctions or you can even establish a partnership to do all the work for you if you don't have the time yourself.

Jay Hinrichs · Answer

AS well as remember just because people are on BP and may have many post does not make them credible or experts in any fashion.. lots of trolling goes on on this site.

If your moving to Tampa maybe buy in Tampa.. there are good rental opps there I fund a rehabber who sells some turn key in Tampa and you can still get some pretty decent buys there.

Simon Rich · Answer

Hey Jack,

First off, you have the right idea to invest in real estate. Here are some of my opinions/suggestions about the situation.

You mentioned you are overseas and have you looked into wholesaling and rehabbing, and you like buy/hold. Also you have about $90k to invest.

I see all those as advantages and not as obstacles.

Firstly you need to define your plan--- (chose ONE strategy from the three you mentioned)

Second, learn the basics of that strategy--- (just do some reading on BP)

Third, put your team together for your TARGET market--(using tips from your research)

Fourth, review deals your team sends your/deals you find yourself (do this daily)

Lastly, put in offers. (repeat step 4 and 5 for the rest of your real estate career)

The total cost of these five steps is FREE, only thing required is TIME and WILL, and can be accomplished in weeks. Once these five steps are complete you will eventually see results.

Also Jack, this is just my opinion, in future try not to tell people the exact amount you have to invest unless its necessary. You might get some bogus deals sent your way once that becomes public.

Good luck and keep learning

Can anyone please help recommend a strategy for expats overseas?

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