Bridging the gap in different countries (US & India)

[Mohit Madaan]

Hey there fellow investors,
Since i belong to two different markets (US & India), its very very difficult for me ignore some differences the way these markets operates. For starters, 1 to 2% Rent  of property value is pretty normal in US market as compare to 0.25% rent of property value in Indian market.  After some numbers crunching and other factors, this has started to make somewhat sense to me but here is a difference i feel can be a huge opportunity.

The interest rate difference

We all know, US currently is at its all time low interest rate on mortgages and well everything else but even when the market is normal, this is significantly lower than the Indian market. I recently bought a home and my mortgage is at 10.35% Fixed (excellent credit and lowest rate possible). Not to mention, the Private money loans goes anywhere between 20 to 36%. Now, this is not just mortgage rates, the difference can be seen on any type of lending in India. Typical, savings account, money market accounts are offering around 9% rate without a problem with most of the banks. Imagine, how our fellow Americans will feel if they found a way to make 9% on their life savings.

While, i have been trying to wrap my head around all this and find a creative way to make money a good friend of mine told me they did a lot more research into this and are now launching a campaign where they are attractive Indian Americans living in America to invest in India. The expected return is 8% for the Americans with much safer market and no overlooking of properties required and almost null holding cost. This friend of mine is actually launching a road show and expo type of thing in March in 5 US metros with top 50 real estate companies of India promising return to these Americans. I am kinda excited to see how it goes.

My point is, shouldn't there be a way to have Americans invest in a US company with say a guaranteed return of 6% and invest that money in India and make 9% at least with no risk taking? Well, just been thinking and whats better place to discuss money than bigger pockets, please let me know know your opinion and i will keep this thread updated with my research and update on the campaign my friend is going to run in March.

[Gautam Venkatesan]

@Mohit Madaan  - "guaranteed", "no risk" and investments do not mix well :)

Add foreign currency fluctuations and it will be hard to get 9% in my opinion.