Are investors willing to invest abroad in this website?

Question

Hello everyone,

Allow me to introduce myself, my name is Bernardo Cunha. I’m a portuguese handyman with specific knowledge in house renovations with skills such as plumbing and electricity covered as well.

I signed up to this website as per recommended from an US investor I met last year.

Currently beginning my REI journey with my primary focus being on the BRRR method.  There exist several distressed apartments buildings in downtown Lisbon (1-6 units) from 300-500k needing refurbishment with an average refurbishment cost of 20-30k max per building. (Being that most apartment building in downtown lisbon are small and only need refurbishment on the inside no structural repairs needed).

Which offer incredible yields both on a rental basis or from a fix & flip perspective.

In my specific case I don’t have the required funds available to enter on my own and therefore am looking for seasoned investors who would be willing to enter on a partnership or joint venture to invest (all legal, with written contracts obviously).

I have seen people with no money but the right skills and connections for the job be successful at it. I have the general skills required to refurbish properties while keeping the costs controlled since I have a hands on approach and spend most of the time doing it myself.

Are investors here more interested in investing nationwide or also open to investing abroad? In Europe. (Lisbon - Portugal specifically)

Also, for those who are not interested in investing in smaller projects or BRRR methods and are more keen to invest anywhere from 1-50 Million, in ready projects like hotels, or bigger apartment units in Lisbon. I have a few connections in regards to off-deal properties not listed online.

Looking forward to hearing your thoughts and feedback on these subjects.Best regards,Bernardo Cunha.

Mike Lambert · Answer

@Bernardo Cunha

I'm Canadian and became a member here to learn more about US investing. There were investors asking questions about investing abroad. Because I already owned properties in Latin America and Europe, I started to answer these questions as my contribution to BiggerPockets and the forum.

There used to be an international sub-forum and I was the main contributor, reason why I was invited a few years back to attend a call with CEO Scott Trench and the other top sub-forum contributors to give our advice on the last changes in the forums. Ironically, these last changes included the removal of the international sub-forum, I assume as a result of a lack of interest.

Yet, more and more Americans have been investing in real estate abroad and especially the wealthy. That makes sense from a diversification point of view. If we have learned anything from the pandemic, isn't it that we should have all our assets and income in the same country at the mercy of one single government?

Mind you, there are still many people here who want to buy property overseas. I only posted on the forum once. My other 1,299 posts were actually replied to posts, the majority of them being about Mexico and I've helped many BiggerPockets investors buy property there so there are international buyers/investors. Indeed, a country like Mexico is much more sought after than Portugal among US investors for obvious reasons.

Mind you, over the last few years, Americans have bought properties in Portugal in ever greater numbers and for good reasons: cheap financing, high income, capital gains. More and more have moved to Portugal to take advantage of the golden visa and the great lifestyle at an affordable price. Buying a dilapidated property in Lisbon and rehab it as a short-term rental was very profitable and became extremely common. Your services could have come very handy then. The problem now is that the golden visa has been abolished, Lisbon has gone from cheap to very expensive and new short-term rentals have been banned, whereby investing in Lisbon has become much less attractive. Therefore, if I were you, I'd focus on lifestyle buyers who move or by a second home there. They're less price sensitive so you could charge a fair price for yours services and then invest the money you make in your own properties. Just an idea.

Jake Baker · Answer

@Bernardo Cunha

Short answer - yes you can but posting on BP or other real estate websites isn't the best way to find investors for your deals. I have found my private investors by the following - personal friends, local meetups, real estate conferences. Just like with any lead, you have to nuture it. People who invest with me do so because they have generally known me for years.

Allan C. · Answer

@Henry Clark I think getting over the trust factor is the biggest barrier to clear first. This sounds like the modern day REI version of the Nigerian prince scheme.

I’d rather throw money at a Columbus turnkey player than in a foreign market with unfamiliar terms of recourse.

Mike Lambert · Answer

@NA Hoss

It makes total sense to invest outside of the US when rates are high and opportunities are few. Being from Canada, I'm doing the same but I'm targeting short-term rentals as they are much more profitable and justify the hassle and risk of going overseas.

A low interest rate doesn't make a good deal in and of itself. Even if your gross rental yield is (much) above the average, I'm not sure how high your cash flow is after expenses and mortgage payments, even with a 3 - 4.5% interest rate. But it seems to be working for you so that's the most important and I guess it doesn't necessarily have to be impressive.

Mind you, my main issue would be capital appreciation or the lack thereof. Portugal as a whole has had huge capital appreciation over the last few years but that was mainly a catch up from the Global Financial Crisis and it was led by foreigners, notably through the Golden Visa, that's now been abolished. Also, it's been concentrated in places like Lisbon, Porto and the Algarve, where the rental yields aren't the highest. Prices are still going up but demand is now dropping substantially because, without the foreigners' money pouring in, it's likely not sustainable and demand is dropping strongly at the moment. Most of tney in Portuguese real estate has been made selling or renting short-term premium properties to foreigners.

So my main issue would be getting any long term sustainable capital appreciation, as a little bit f cash flow doesn't make anyone healthy. After all, the average Portuguese is not wealthy and especially not the average renter and there's already an affordability issue in the country. So they might one day reinstate rent controls. The fact that you haven't had issues with tenants doesn't mean the risk isn't there. I don't know how long you've invested there but there are plenty of investors who invest in US war zones and don't have issues with tenants. It doesn't mean there's no risk.

Mind you, I'm sure you get plenty of capital appreciation from your west coast properties so maybe that's not your priority.

In any case, kudos to you for making the effort to go overseas to find what you can't get in your state and also take the risks that go with long-term rentals!

NA Hoss · Answer

Im not applying the NA multifamily investing model but maybe I was being generous calling them incredible. That said, I get much better interest rates here than in the US right now which helps the yields. Also, just like anywhere, not every deal out there will return the same.I also dont have any issue refinancing, or taking out a refurb loan at the same time as the mortgage both with great rates, usually between 3%-4.5%.  Sure the terms can be different as fixed and mixed rates can have up to a 2% fee for early pay down. All that said, my long term rentals are yielding quite nicely and well above the average you mentioned and I havent had any issues with the tenant laws here, sure they dont let you be a slum lord like in the states but again no issues.

With the rates and home prices in the states the past few years its much harder to find good properties. The only reason I get insane yields on my west coast properties is because I bought them 5-10 years ago.

Mike Lambert · Answer

@NA Hoss

Incredible long term rental yields? Where? The average gross rental yield in Q4 23 was 5.65% so the CAP rate was way below that. So, renting long term isn't very profitable and it is risky, with tenant favorable laws. You can't apply the North American multifamily investing model there, as you can't refinance like you do in the US or Canada. Short-term rentals would be the way to go but you won't get a license in the most popular areas.

NA Hoss · Answer

There is no absence of overseas investors...only the absence American investors. Even with the ban on new short term rentals, long term rentals are yielding incredible cap rates. That doesnt help you much, but I would focus on starting small, and trying to procure your own financing on a multifamily property and live in a unit while you rehab others.

AJ Singh · Answer

@Bernardo Cunha

Lots of USA expats are settled in Portugal due to low cost of living. IF you go on Facebook there are dedicated groups. You may find your investors there.

@Mike Lambert is spot on about cancellation of golden visa. I dont think properties are going to sell quickly in the absence of oversas investors now.

James Wise · Answer

I've worked with a lot of people who are overseas and are here to invest in the USA. Have not seen it go the other direction though. Closest thing I've seen to USA investors going overseas because of Bigger Pockets is when we helped blow up Clayton Morris's turnkey scam and he fled to Portugal.

Are investors willing to invest abroad in this website?

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