Invest in America or Overseas

[Dante Anderson]

I'm looking to invest around 300k on a beach villa in the Dominican Republic ( Gated Expat/ tourist community or buy something in the US. I can't afford anything else in Southern California where i live.

Any suggestions, strategies, other areas in the US i should look into? 

[Mike Lambert]

@Dante Anderson

Obviously it depends on your objectives, the deals on both sides, ..., which we know nothing about. When it comes to international investing, buying a villa in the Dominican Republic isn't very exotic in that many Americans have done it before. You'd still need to know what they're doing. Also, be aware and beware of the sargassum risk. It's a deal breaker for me (mind you, Florida is at risk too).

@Greg Scott

I'm not sure what you've been looking at abroad but, especially today, investing overseas is in many instances much more profitable and less risky than in the US, where you also run all the risks that you mentioned.

If the profitability and the risks would be similar, it could be argued that it's better/easier to invest in your own backyard so I totally understand where you're coming from. However, that's not the case. I could write a novel about this but let me ask you two questions instead:

1. Don't we think investing in the US is risky with high interest rates, historically low affordability and cash flows and high prices inflated by 15 years of artificially free money that's gone for good? Have we forgotten the 2008 global financial crisis that wouldn't happen in foreign countries where properties are bought with cash and the risk of foreclosures is 0? The whole financial freedom through real estate movement/model has been created on the back of artificially low interest rates following the Global Financial Crisis and that model won't work anymore for most unless interest rates or real estate prices in the US drop dramatically and most economists think they won't and for good reason. The low rates were an anomaly and totally unnecessary, as today's reality shows that the economy can boom without them and created that inflation scare that nobody wants to see again.

2. Is it smart to have your job, all your real estate, stocks and everything in one single country and at the whim of a single government? Is that (financial) freedom? Haven't we learned from Covid that the freedoms we take for granted can be taken away from us in a heartbeat if we depend on one single country? Isn't diversification a basic principle of building and keeping wealth? Many of the wealthiest and most successful Americans own a huge amount real estate overseas. In Mexico alone, a country I know particularly well, it's billions and billions of dollars. Do we think all these people are stupid?

In any case, it's great that you made those comments . They are really useful in that they help everyone realize that investing internationally is a matter to be taken seriously and isn't akin to a walk on the beach. Although having to inspect beautiful beaches across the world is part of my investing routine. Poor me! ;-)

If you do invest internationally, it can be helpful to have the right team. Because, as you seem to have found out by yourself, as the best deals generally don't show up in plain sight for everyone to see, as is the often the case in the US too. So, if you still want to find something overseas that would fit within for objectives, feel free to reach out and I'll be happy to help if I can.