Financing Foreign Purchase - Costa Rica

[Alex Washburn]

Hello Bigger Pockets Community, My fiancé and I are beginning our real estate investment journey but we live and work in one of the most expensive markets in the world - even though we are 20 minutes from San Francisco there is not a property in our city listed at under 1 million (yes). So I recently took a trip to Costa Rica for the sole purpose of identifying regions we would like to invest in and ended up finding a fantastic little condo for our starter property. We've settled on the price of $67,500 usd with the seller. Now - we struggling to find a way to finance the deal. Most Costa Rican mortgage loans require %50 down which we have the cash for but we don't want to tie up that much of our liquid assets in one property as we intend to buy a 2nd property in the next year or so. Combined we make over 200k a year, no kids and no debt. Can anyone point me to the best US based resource either private or commercial that does loans for international real estate purchases? I've had very little luck with google. HSBC does Mexico but not CR.... Thanks in advance!

[David Morgan]

A quick Internet search of "Costa Rica Mortgage Loans" turned up a couple of brokers and private equity offerings.

You could also try to get the seller to finance part of the purchase price.

Or borrow it from your 401K, if you have one.

Depending on your credit score, it might also be worth looking at rates from a local credit union, bank, or even Prosper or Lending Club for a personal loan rather than a real-estate secured loan. The rates are usually higher, unless you secure it with a CD or stock portfolio or something. Both Prosper and Lending Club offer loans big enough to cover your 50% down payment.

Something I would never recommend to most people, but as a last resort -- if you absolutely knew you COULD pay it off any time you wanted, you could put the down payment or at least a big chunk of it on a credit card and float it between 0% balance transfer offers until you get it paid off. Discover, for instance, will deposit the money for your "balance transfer" directly into your checking account, and often has specials for 0% financing for 12 months with 3% up front transfer fee, or 5% financing for 18 months with 0% transfer fee. Chase Slate also has good sign up offers for balance transfers. Again, this is risky, and maxing a card will ding your FICO until you pay it down, and also increase your DTI -- if those things are considerations for your next home purchase. And if something happened that kept you from paying it off, your interest rate would shoot sky high. It's too risky for most people.