Where in the world should I invest in real estate?
There is a myth that has been promulgated by some Expatriate Americans who sell newsletters that the United States is bad and one should invest overseas, in places like Argentina or Columbia or even Indonesia, etc.
This is all BS and it is a feeble attempt on their part to pitch and sell whatever programs they want to sell with no regard to the overall picture of the buyers or their specific, individual situations.
I submit to you that you must only invest in the United States, in commercial real estate, because this country has:
- 1. The most stable economic system,
- 2. The highest respect for ownership structures,
- 3. The best banking systems, rules and formulas,
- 4. The most beneficial tax system (especially for real estate),
- 5. An open mind towards foreign investors
- 6. Safe structures like real estate funds supervised by the SEC
- 7. The most powerful political and military might.
Those who complain about the US system fail to understand the power of being off the gold standard. Look at Greece. They have an economic problem and have been unable to print Euros because of the European Union structure. The US, on the other hand, is in full control of its currency system and can better, albeit slow at times, adjust the process to avoid complete economic disasters like Greece or Iceland, etc.
Also the US has somehow over the years through political
connections convinced the countries around the world who produce the largest oil reserves like Saudi Arabia and Kuwait) to use the Dollar as the exchange currency for oil transactions worldwide.
It is rumored that the countries that hint of getting off that dollar system for oil sales, end up paying a dear price through military attacks such as what we have seen in Iraq, Syria and other parts of the oil world. Whether this is the sole reason for such military coups or not, the key thing is while we in the Us represent 10% of the world population we control a third of the world economy and we are one of the most powerful military forces on the planet.
Other countries cannot adjust their currency against the dollar and if they try to do so they end up paying a dear price on the importing of their goods to the US, through government policy changes that force them to get off pegging their currency to the dollar. (See what happened with Chine a few years back)
All of the above create the best climate and opportunities in the United States for commercial real estate investing. And if do not have enough money to get into that kind of investing on your own, or you live in a foreign country, the SEC has created legal structures for you to invest in real estate funds that produce attractive steady reliable income.
Whether you are a US Citizen or a foreigner, you can invest large chunks of money or small incremental amounts over a period of time in a real estate fund and you should be able to get much better returns than investing anywhere else, with any other currency, in any other type of investment.
How about the future, you may ask? Well, Warren Buffet said it best; I am paraphrasing: “Do not bet against the US economy. This country (The US) has just started and the best is yet to come”.
If you like foreign countries, then, by all means, travel overseas, go on exotic vacations, or short business trips, and make sure you stay in reputable safe hotels. But avoid investing in foreign places where there are problems that could cost you more than you can afford such as:
- 1. No or bad bank loans,
- 2. The currency risks devaluation both from inflationary pressures and an ever-changing exchange rate.
- 3. A tax system that can devour your profits
- 4. A political system that may become unstable
- 5. Ownership rights that cannot be enforced
These are only some of the reasons, I suggest for you to refocus on the US and don’t waste your time reading the negative newsletters promoting foreign investments or structures to prey on those who are frustrated personally, professionally, or financially. Whatever you do overseas comes with a high risk that could easily erode whatever value you may have in your investment assets when you are ready to cash out.
Let this be a reminder to you that the best way to make time, money, and effort work for you is to leverage your money safely, free your time and do what you enjoy doing, like traveling or playing sports, etc.
Real Estate investing in the United States whether directly on your own in a specific property or through a reliable real estate fund structure that has many assets, could provide you with:
- a. Safe assets,
- b. Steady cash flow,
- c. Liquidity
- d. Solvency
- e. And above all: peace of mind
Investing properly in commercial real estate in the United States is the gift that keeps on giving!
I hope I was able to restore some of your faith in the Us market and its future.
Sincerely,
Cherif Medawar
RE Hedge Fund Manager
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