How would you deal with the money bottleneck if you were overseas?

[Gary Dezoysa]

Hi Everyone, 

I finally have close to enough money to begin investing in properties. When I was in the US the plan was clear, I'd start with my own money for the down payment on the first house, build up my reputation, and then pursue private money lenders.

Life has weaved an interesting course for me and I find myself out in Pattaya, Thailand. The principles of real estate investment work the same, but there are no groups of real estate investors out here. Which is nice because of the lack of competition, but bad because now I have no local private money to tap into. And Thai banks are generally unfriendly to loans to foreigners, not even considering non-owner occupied units.

My first reaction was that my opportunities would thus be limited. But now I'm interpreting this as an opportunity to get creative. 

What would you guys do to find the private money you needed for deals, if you were overseas?

[Jeff S.]

"… there are no groups of real estate investors out here."

This is not true, @Gary Dezoysa.  Here's a small list of Meetups in Bangkok, about a 2 hour drive for you. You can do a similar search for Kuala Lumpur and Singapore and it might be worth a day trip to attend, or at least call the club leader.

"And Thai banks are generally unfriendly to loans to foreigners, not even considering non-owner occupied units."

Perhaps, but there are many foreign banks, including many of the large Singaporean banks that reach far into south Asia that will deal with you, if you are qualified.

While the Sing Dollar is relatively strong right now, and real estate in Singapore is white hot, this is not true for Malaysia. The Ringgit is almost at an all-time low with respect to the dollar and there are deals to be found. I suggest you stay away from the large residential developments in all the local countries, which are always over marketed and hyped to foreigners, though they will include very appealing financing.

Better to stay commercial and look at tenanted multi-story retail shop-lots or professional offices in established areas, in my view. Many of the appealing areas and new properties are completely overbuilt and will sit vacant for a long time until they rent.

No matter the country, don't buy pre-construction. Even if you go residential, pay for the cash flow and find proven properties that the first owner has rented to strong tenants with long-term leases and established expenses. Anything else is a pig-in-a-poke.

Take a short trip to Vietnam and note that they are still at the motorbike stage of development.  This is just above bicycles, where China was when Nixon visited. This is especially true in the north. In fact, India and China now outsource to them. Here, you need a local partner, which might not be hard to find. Ditto Myanmar, from which the genie just left the bottle. This country has an enormous amount of natural resources and potential if you have the patience.

You are sitting in the perfect location, Gary.

If you want an initial set of resources, you might check out Global Property Guide. In addition to regional market data, which is sometimes dated, this site has local lawyers, accountants, and agents you can call to get a better idea of the markets. The larger firms will have regional property reports they will send you.

Good luck.