All Forum Posts by: Jeff Wagner

I am in the Virgin Islands, also challenging to find lenders.  I have been in touch with a couple US based ones that lend in region.  Happy to share the contact, message me.

For those considering the Caribbean, the USVI offers the same fee simple ownership as the mainland, thus reducing risk. Loans can be had for investors at 75% LTV, sometimes 80%.

Quote from @Bill B.:

Can you make any of the USVI work? (They would let you 1031 in and out of the property.)

Yes, you can 1031 here.  We face the same challenges as Culin mentioned, but I have found that the investors who run their properties as businesses can do quite well and earn solid coc returns.  Feel free to reach out if you have further interest in the VI.

Quote from @Brandon Vanderford:

I am a property manager based in North Carolina. I have a client who is potentially interested in selling residential property in St. Thomas (in the U.S. Virgin Islands) and buying commercial property in the United States. However, I know little about tax law in U.S. Territories. Would my client still be able to avoid capital gains taxes by doing a 1031 exchange? Thanks for any feedback!

Yes.  I have assisted clients here in the VI with 1031.  In my experience, you can use a qualified intermediary from anywhere (North Carolina) to handle the exchange. The process is no different than the mainland. Feel free to reach out directly if needed.

Quote from @Timothy W.:

Quote from @Dana A.:

Quote from @Timothy W.:

Quote from @Dana A.:

Hey Everyone! I am looking into the Florida Market (From Palm Beach to Miami) 

Crazy thought, have you looked at The Keys or the USVI? It's a different kind of market doing mostly vacation rentals but it's not as unattainable of a price point as you'd think. Lowest priced SFR in the The Keys right now is 350k. I had to stay in St Croix for a couple weeks for hurricane recovery and there's a Home Depot right there so that tells me managing a property wouldn't be impossible. Check out the one for sale at 38 S Slob Eb in Christiansted, VI. It's pending but at 495 it's not crazy. Needs a repaint bad. That view though is INSANE and it's on half an acre overlooking the ocean. You'd be like a Bond villain on that porch, lol. I will tell you thought the construction force is on island time, lol. However, if you have to put in the time to check on your investment, it may as well be awesome.

 That looks like it could be a nice place to live. Unfortunately it's out where the buses don't run lol Airbnb?

Car rental at the airport.  Super easy there.  Just get ready to drive like in Europe, lol.  I always did Airbnb when I went there.  I actually stayed in a place that was on HGTV.  Highly recommend.  The hosts were awesome and gave me some insights on doing vacation rentals on the island.  Here it is:  

HGTV & People Magazine featured Villa! Large Pool & Best Ocean View on Isle! - Houses for Rent in Christiansted, St. Croix, U.S. Virgin Islands - Airbnb

This is primarily a FL thread, but this reply caught my eye. The USVI can be a solid STR spot for sophisticated operators. The beauty of the VI is that the bar is low in terms of management and those that run their STR's like a business generate outsized returns. St. Croix is a lower price point than St. Thomas and St. John, but has lower visitor counts than STT and STJ.

I may be biased, but often times people forget about Puerto Rico and the US Virgin Islands.  In my view, risk is reduced by owning in a US flagged territory.  As example, in the USVI we have fee simple ownership, title insurance + contract and closing process similar to the mainland.  Puerto Rico has more nuances, including spanish language long term ground leases, but is also US territory.  I personally evaluated several central american and caribbean destinations before ultimately settling on the USVI.  To add to @Brooklyn McCarty's point, AirDna seems to be ok for here as well, easy way to check rough numbers.    

A fair portion of the brokerage community here does not share data with Zillow.

Quote from @Henry Clark:

@Jeff Wagner

Forgot.

Need a 15,000 gallon cistern.
 solar off grid system.  
250 gallon propane or butane powered generator

Caretaker cottage or exterior quarters

What’s the price there?

What are the finance terms? LTV, interest rate, amort term, no cliff

Thanks  

 Hi Henry.  It's apples and oranges - but I'll guess VI is more expensive.  What you are describing sounds like one of the cays in Belize, which is a different vibe and terrain than in the VI - thus the considerations are different but I'll seek to come back with a thoughtful response.  This hurricane has derailed the last few work days.

Good Day from paradise.

There are many great posts in this thread and its great to see such an interest in investing outside of the mainland US.

**Disclaimer – I live, invest, and broker in the USVI.

For anyone considering investing in the Caribbean, below are a few points that led to me moving and doing business in the USVI from the mainland. I am not discounting other islands nor mainland central America, but simply sharing a few points that spurred my decision.

1. We are part of the United States. We benefit from being under the US flag. Prime recent examples: 1. A natural disaster strikes – US Navy ships and FEMA are ready to swoop in and take action. Our independent neighbors down island are not so fortunate and can be devastated by natural disasters. 2. COVID – We had vaccines well before any neighbors. It was also easy for US citizens to travel here during the pandemic (no passport required), thus increasing occupancy numbers significantly and resulting in long term tourism gains from folks who visited that may not have otherwise.
2. Ownership is Fee Simple with ability to purchase Title Insurance from known providers
3. Residential mortgages are available and subject to same rules and regs the mainland. VA/FHA programs work here
4. Real Estate transactions generally follow the same processes that I have seen in many US states.
5. Mirror Tax code: Federal Income tax rules mirror IRS mainland, only the taxes stay in territory. 1031 exchanges can be done here. There is no state income nor sales tax.
6. “Offshore” benefits: because we are separate from the IRS, we have some unique tax incentive programs unavailable in the mainland that are quite attractive.
7. Sustainability – I personally get my energy for home and car from the sun and water from the sky
8. We’re only 133 square miles – there’s a finite amount of developable land. In fact, around 2/3 of St. John is National Park and will hopefully never be developed
9. We do have licensed Real Estate Brokers and Salespersons with an MLS and are part of NAR
10. Easy access via air to Mainland hubs

Of course we have our negatives like any destination and share some problems that plague other Caribbean nations:

 a poorly performing power grid, rough roads, and supply chain

I'm a real estate broker and investor based in St. Thomas/St. John, not active in STX, but happy to connect nonetheless.