All Forum Posts by: Mike Lambert

@Montse C.

I was totally shocked to read your comparison between Southern Spain and Southern Italy as it makes absolutely no sense to me, especially from a real estate point of view. What you wrote is actually kinda correct and I quote: "I would say it is actually quite similar to Southern Spain in many ways. For example, Southern Spain tends to be more affordable than the north, especially if you look at rural areas or small villages. Just like in Southern Italy, where houses are sold for as little as one euro, similar initiatives exist in Spain to attract people to repopulate villages and revitalize these areas." the one part I'd disagree with is "many".

So why was I shocked then? Because your statements are extremely misleading (unintentionally I suppose). Indeed, BP is about real estate and:

1. I haven't seen any statistics to this effect and I don't think any has necessarily been compiled but I bet I wouldn't exaggerate if I state that 95% of the value of real estate in Southern Spain or at least the province of Andalucia is in the Costa del Sol. The Costa del Sol is one of the world's most successful tourism success in the world ever. It started in the 1960's or something and has gone from success to success, overcoming all crises. Nowadays, people from all over the world vacation, work temporarily, move (with or without their business) and retire in the Costa del Sol. Many billionaires and celebrities own property there, including lots of Americans.The infrastructure is top notch. And it goes well beyond that. Even the main city of Malaga, who was considered a backwater city just 10 years ago has become very popular and is now turning itself in a little Silicon Valley and banking center. The Costa del Sol has been pulling the economy of Andalucia, Southern Spain in general and the whole country for decades.

2. Nobody on here is likely interested in investing in a small village in Southern Spain as it would make no sense but there are loads of Americans investing in the Costa del Sol so it's important to focus on what matters to the community if we want to help and make sure we don't discourage them with involuntarily misleading statement.

In comparison, Southern Italy has none of that, expect for the little Amalfi Coast at a very small scale. And then, the proof is in the pudding as far as what interests us, real estate. While real estate prices have been steadily increasing in Southern Spain over the last decades, they've been steadily declining in Southern Italy.

I was even more shocked as I assumed that Montse would be your first name and you therefore would be Spanish (I found that out because somebody called Montse joined the owners' Facebook group of a community in which we own a condo in the Costa del Sol). But then, looking at your profile, I realized you live in the Netherlands now. If you have time, I'd suggest you travel through Southern Spain and then Southern Italy and then you tell us if it's similar. You might be very pleasantly surprised.

To conclude, it's great to have more new members like you from Europe contributing to the forum. Personally, I always try to avoid general statements that could be misleading. My whole point to responding to your post here is to help avoid that people who might have been considering investing in the Costa del Sol discard the opportunity because they think it's like Southern Italy.

Everybody who invests in Southeast Mexico, including myself, knows that the typical property doesn't offer ROI upwards of 10%-15% but way less. These figures are even higher than those that were used by unscrupulous local developers, master brokers and local real estate agents a few years ago to lure unsuspected foreign buyers. With the increase in prices and competition over the last few years, these figures were so divorced from reality that these people now typically advertise 8% to 10% at the most, which, unsurprisingly, is still higher than reality. Also, the average occupancy rate in Tulum is far below 70% - 80%. Anybody who wants to know the real ROI and occupancy figures can check on Airdna. There's actually a huge oversupply of properties in Tulum and none of my friends who own property there make anything close to that! There are countless short-term rentals sitting empty there. Like in many other markets, only a minority of owners can get such figures (if they have a special property that they bought at a good price years ago for example) but the average buyer/investor will be sorely disappointed if he/she hopes to reach those figures.

@Chris Magistrado

Refinancing could be done in certain countries and situations. It's a matter of case by case but I doubt that it could be done in Italy. As far as I know, it generally doesn't work in the US anymore as you describe now that interest rates have returned to a normal level.

I totally agree with @Henry Clark that, if I want to invest in Italy, I want mass tourism and STRs. A few years back, there were opportunities in the best markets (Venice, Florence and Rome) but they might have disappeared.

It's within 50 kilometres from the coast and 100 kms from an international border, so 31 and 62 miles respectively. There are two workarounds:

1. The fideicomiso or bank trust, whereby the title is in the name of the bank but they don't lease the property to you; you're the owner for all intents and purposes. Renewable every 50 years.

2. The Mexican corporation, generally advised if you buy multiple properties, given the higher costs.

Hi Pamela,

The kind of guide you're trying to create can already found all over the internet and are very easy to find and some of them, written by other real estate agencies, are pretty good. Also, with the advent of the likes of ChatGPT, they' might become obsolete and unnecessary. Of course, not everybody is that good at or has the time to do Google searches or know how easy it is to use ChatGPT so it might still make sense for you to provide such a guide to your (potential) clients.

If you don't want to spend time reinventing the wheel, you have other easy options:

a. You search for existing guides, select the best and provide the link or the document to your clients. Of course, I totally understand that you wouldn't want to do if that guide is written by another real estate agency, in which case you have option 2.

b. You take that best guide as a base and put your own spin on it but make sure you don't copy proprietary content or do plagiarism. You're already half way there by asking people what they want to hear. And, voilà, you have your own guide.

Problem is what they'll likely want to know will probably be basic and already covered by those guides. In trying to be more helpful, I came up with two additional ideas:

1. Don't fall into a trap others have fallen into before you. I've been on this platform for many years and, over the years, I've seen new members linked or part to Mexican real estate agencies posting educational content about investing in Mexico out of the blue shortly after becoming new members and then disappear as they realized that their efforts wasn't giving them the amount of business they were hoping for. Why? Presumably because the overall majority of BP members invest only and the US and they're smart and well educated and can tell when people are trying to genuinely help them or are motivated by trying to get business from them.

2. When somebody asks for advice, I always try to put myself in their shoes and understand who they are and what their objectives are so I tried to do that with you with the little amount of info I could garner from your profile. According to your profile, you'd be a representative of a Mexican real estate agency I'd never heard of, even though I've been investing in Mexico since 2017 so I googled the name you give and, surprisingly, I didn't find a proper website, just an influencer-like Instagram account. Also, your profile says that you're a real estate agent in Canada. Are you licensed to sell Mexican properties? You can write the best guide but people want information for credible sources so you might want to clarify all of that or it might be an obstacle all along.

3. I if go back in time when I was a newbie and investor in Mexico and I'd need to get information about how two invest in Mexico, I'd want to hear from other investors who have done it before rather than from people who sell properties and that's exactly what the forums are for. However, when I'd want to buy a property in Mexico, I'd want to hear from real estate agents who would provide me the best possible service. So, coming back to the trap I mentioned in point 1 above, if I were those people, instead of providing content that's already available everywhere, I would focus on being the best possible real estate agent and then shamelessly advertise my services. While BiggerPockets has very strict rules about (disguised) advertising in the forums, there's a whole classifieds section for that.

Hope this helps!

You're welcome and you're correct. However, between the much lower mortgage interest rate in Europe and a better tax treatment in the US, I'd choose the former. There is no contest.

@Levi T. As I suggested and you confirmed, the Côte d'Azur is a great place for capital gains but what I meant isn't necessarily where you're going to get high rental yields.

What @Chris Magistrado mentioned represents a good depiction of the situation in Southern Italy. But Southern Italy is not representative of the majority of Europe. I'm European, spent most of my life in Europe and have owned property in several European countries and I can tell you categorically that it doesn't not reflect the situation in most European markets and, by the way, Chris rightfully never suggested that it does.

Of course, if Americans want to reap the benefits of investing in Europe, they'd ideally need to, as you suggest, get the right market knowledge, understand the local financing and housing laws and I'd add to this the legal system. But isn't that's par for the course? What prevents them from doing that?

Now, if they don't want to do that for whatever reason and don't have anybody to work with who would do that for you, I'd have to agree with you that they'd better invest at home rather than getting involved in something they don't understand. Mind you, even if you invest at home, you need to do the/some work.

Europe is as big as the US and the differences between markets is even bigger because Europe is made up of different countries. Like in the US, there are good and bad areas for investing. The area around Nice isn't the best area to invest (although you might get some nice capital gains there) but here are plenty of areas that are great and where you can get much higher returns than you generally get in the US. Real estate is local.

@Taylor Dasch

You can buy the property in your own name if it's outside the so-called restricted zone. If it's in the restricted zone (within 31 miles of the coast or 62 miles from an international border, you have the choice between using a bank trust and paying the fees mentioned above or using a Mexican corporation and bearing the costs of establishing and maintaining  the corporation. Given the latter costs, a corporation can be the best solution only if you buy multiple properties. Bear in mind that the fiscal treatment of the two options in Mexico is different (withholding tax on the gross income with the fideicomiso vs cost deductions with the corporation).

@Mark Hafner

I've been investing internationally for many years but it's very difficult to answer the kind of questions you ask without writing a dissertation so I'd encourage you to ask more precise questions in the forum. If you know what you do and why you're doing it, there's no need for the bad and the ugly, which I personally haven't experienced.

@Jonathan Greene I'm not sure what you mean by "most will not cash flow as an out-of-country investor" as it might suggest that the cash-flow of a given property has something to do with the nationality or residence of the owner but, in any case, you're absolutely correct that, historically, the net rental yields of LTRs in US cash-flow markets like the Mid-West have been typically higher than in the average European market, although that wouldn't be the case for many other US markets like California or New York. Mind you, with mortgage interest rates in the US being so much higher now (and seemingly for the foreseeable future), I wouldn't be surprised if LTRs in Europe would cash flow better than in the whole US nowadays (to be verified).

This being said, I don't and would never invest in LT rentals outside of North America  as I wouldn't want to face unfavourable landlord/tenant laws as a foreigner. Most people who invest internationally invest in short-term rentals and, unsurprisingly, that's what Mark is asking about. ST rentals are much more profitable and command cash flows are often higher than in the US if you buy the right property in the right market.

As an international investor, I find Ladislas Maurice interesting but there are different types of international investors and most international investors I know wouldn't go through the hassle of what he does for the kind of returns that he gets. Indeed, you can get higher returns than that in the stock market at the click of a mouse and, when investing internationally, you'd typically want a higher return than you can get domestically or in the stock market, unless you're mainly looking for diversification or parking your money.

On another unrelated note, I love your latest podcast episode. BP should make you a guest host! :)