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All Forum Posts by: Mike Lambert

Mike Lambert has started 3 posts and replied 1369 times.

Post: International - Thailand condo investment

Mike Lambert
Posted
  • Investor
  • The Americas and Europe
  • Posts 1,405
  • Votes 1,206

@Tip Mallick

I think there is an international forum but not that many people invest internationally here and probably even less in Thailand anyway.

It depends on your objectives (we all have different ones) but didn't you already answer your own question? I invest exclusively overseas as I can get better returns than at home in the right places but I wouldn't touch Thailand with a 10-foot pole, unless it's for lifestyle. The lack of capital gain would already be a huge no no for me but so is the inferior property title (foreigners can't own land in Thailand).

There are so many better ways to make a 10 - 12% ROI, which by the way you're not guaranteed to get (which would be ok if you could get capital gains)! I don't know if you're aware but luxury hotel rooms are often super cheap in that country so I'm not sure how you'd compete and make any decent income. I'd never trust the figures of a promoter and do my own calculations.

Post: International Real Estate Investing

Mike Lambert
Posted
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  • The Americas and Europe
  • Posts 1,405
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@Atlas Blake - You're welcome, Atlas.

In Europe, you have islands mostly in the Mediterranean Sea but also in the Atlantic Ocean. I'm not sure what your definition of an island is but, if I had to guess, I'd think it's related to a tropical vibe, which you generally don't have in Europe. A place in Europe that is on an island will generally not going to be that much different than a place in the same country on the continent in terms of vibe.

Back to the Americas, I mentioned the Caribbean because I was referring to "island". However, you can find the same kind of vibe on the Atlantic and Pacific coasts of Mexico and Central America.

Post: International Real Estate Investing

Mike Lambert
Posted
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  • The Americas and Europe
  • Posts 1,405
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@Atlas Blake I'll add my two cents given that I've been investing for a many years in the region:

1. @John Underwood what you wrote makes total sense but, as you know better than me, finding a great ROI property in the US ain't easy anymore with the new normal when it comes to interest rates. Because of that, you could get a much more profitable investment overseas if you know where to look. But if you find high ROI properties in the US, it's absolutely an option so read you mentioned it.

2. The biggest mistake people make when attempting to invest overseas is trying to apply US strategies overseas. Turnkey generally don't exist and value add generally makes no sense from a business and financing overview.

3. The issue with islands is that it means Caribbean. That means more expensive and less profitable and, personally, I wouldn't invest there because of the sargassum issue but you might care less about it because of the lifestyle component in your case.

4. Costa Rica is expensive and it generally doesn't work from a pure investment point of view, unless you're not very demanding from an ROI point of view. It's a good location for lifestyle buyer but, again, you're part lifestyle so it could work for you.

5. As to buying land and build from scratch, make sure you understand what you're getting into, especially if you don't reside on the ground. Mexico is by far the main market for the whole area and  one of the main agents in Puerto Vallarta, one of the main markets, recently told me that every American he knows who is a pro rehabber in the US who's done a rehab there has hated it and said they'd never do it again.

Hope this helps. It's an exciting adventure but won't be easy so don't get discouraged. Just make sure you understand what you're getting into, which is exactly what you're doing by posting on the forum so kudos to you you're on the right path.

Post: Buying property overseas

Mike Lambert
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  • The Americas and Europe
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You're welcome. Doing that will eliminate part of the hassle but I assume you're aware that you will likely make much less money than with US LTRs and that the laws are much more tenant friendly than anywhere in the US.

I know Valencia quite well with the perspective of a North American (and European) as I was going to invest in STRs there after the Costa del Sol but, sadly, they've banned STRs there so I had to reconsider. So, if you still want to invest in LTRs there, you could reach out to @Erwin Groenendijk. He's active in the forum so he might be commenting as well.

Finally, I'm not sure that you should worry about dealing with currency fluctuations because you won't have to assuming you're cash flow positive. You'll rent in € and your mortgage payments would be in €. Besides, the € has been fairly stable against the $ over the last few years and that could continue if the FED and the ECB follow similar monetary policies, as the market likely believes.

Post: Buying property overseas

Mike Lambert
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  • The Americas and Europe
  • Posts 1,405
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Hi Brian,

You need to first do your homework to decide where you want to invest (also be clear about does affordable city means to you). There's no agent covering the whole US Atlantic or Pacific coast. Same thing in Spain. Even if you focus on just one of the Spanish "costas" for example, a realtor will generally only cover one city, even though it's part of a larger market. Also, Spanish realtors don't work the same way as Americans do so don't count too much on them. It's best to be clear about what you're looking for and you'll need to do a lot of the work/research by yourself. They're not going to waste their time helping foreigners knowing that many will end up not buying.

I'm happy to refer you to my lawyer once you have found a property but it's better that you choose one in the region and province you're going to invest in as there could be "legal" differences pertaining to you.

On another note, it's important that you realize that strategies that work in the US might not work in Spain and financing is different so you might want to figure out first if that works for you first to make sure you don't waste time and money unnecessarily.

Hope this helps.

Post: Financing for Overseas Multi-family Properties

Mike Lambert
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  • The Americas and Europe
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@Ajwang Rading

A few points here:

1. Lenders won't lend cross border so you have to borrow in Spain because nobody normally will or should take a mortgage on an overseas property. Of course, private lenders can do whatever they want but they won't if they know what they're doing, unless they're family or friends of course. Of course , it's another story if you have properties in the US to give as collateral or you're wealthy enough to become a private banking client in Spain and you can offer cash or securities as collateral.

2. Lenders in Spain generally don't like to lend to foreigners for rental properties and don't refinance. So, the US value-add apartment investing model generally doesn't work in Spain (or pretty much anywhere else in the world aside from Canada for that matter). Of course, as @Erwin Groenendijk mentioned there "might'" be alternative lenders but bear in mind that creativity in the financing world is something typically North American. The Spanish banking system is very rigid and bureaucratic. So, I'm not sure you want to launch yourself into an overseas career in which the system is unfavourable to you and generally inflexible.

3. Many US investors make the mistake to believe that they can apply US strategies to foreign countries. It generally doesn't work. Make sure you don't fall into that trap. STRs work but the financing is different.

4. I'm Canadian and I invest mostly internationally but I invest in STRs because I can find much more profitable deals. I invest in certain areas of Spain where STRs are still legal and profitable. I have supported many American BPers in investing overseas but, if they want to invest in anything else than STR like LTRs and apartments, I tell them I would never ever ever do that outside of North America, never.

5. Erwin and others have chosen to live in beautiful Spain so they invest there and they have to do their best given their circumstances and what they got and I think they're pretty good at it. I don't know where you live but, if you live in North America, you have the best multifamily investing "system" and opportunities in the world by a mile and you have the whole BP community to help you. And, if you live elsewhere, people from all around the world (including Spain) invest in US multifamily (you should read some posts written by Spaniards here). In comparison, Barcelona/Spain has high property prices, low rents, legal system favoring tenants over landlords much more than in any US state, squatters and, unless you move there, you're not on the ground. So why in the world you want to do that I'm not sure.

To conclude, with today's high interest rates in the US and the lack of diversification of many, I'd be the first to suggest that anybody would be well served to invest overseas but multifamily isn't the strategy for that in my humble opinion. I don't know anything about your situation and your objectives. My sole purpose here is to make sure you're as well informed as possible before potentially making a big mistake that I've seen too many investors make. And, if you decided to go ahead, make sure you know what you're doing, which is what you're already doing by interrogating the community.

It might be too late for you for this but, for any other reader willing to invest overseas, make sure you understand the financing before you start (potentially wasting time) looking for a property.

Good luck to you whatever you decide to do!

Post: Is it possible to develop a town in Colombia similar to Tulum, Mexico?

Mike Lambert
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  • The Americas and Europe
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The answer is no, unless you have billions of dollars to your name and it doesn't necessarily has much to do with how nice these beaches are. And many would say thankfully but let's stick to the facts.

Tulum is an artificial creation decided and executed by the Mexican government, as part of its masterplan for the Riviera Maya. It had to spend billions of dollars in infrastructure to get hotels and airlines to do the same, which then would bring mass tourism. They had the money, the will and the marketing genius to pull it off. Colombia doesn't have the money, willingness or expertise to do that.

If any other Tulum-like place had to be created, the Mexican would do it. They have or can get the money, they have perfected the recipe. They should just rinse and repeat. And they have a huge amount of beaches much nicer than Tulum's or Colombia's, which are much more easily accessible from pretty much anywhere in the world where most tourism originates.

Yet, they won't do it. Over the last couple years, everywhere I go by the beach in Mexico (in much nicer places than Tulum), when I'm told the local zoning doesn't allow to build this or that and I ask why, the answer is invariably "We don't want to become another Tulum". It has become a running joke, as instead of asking, I nowadays say "I suppose we can't do this because you don't want to be another Tulum". Why is that? The eco-tourism is a marketing facade. More and more people see Tulum as an environmental disaster.

Most Mexicans and the majority of foreigners I've talked to definitely don't want another Tulum so be careful what you wish for. That included the original Tulum lovers, who've moved on to other places when massive development ruined what they loved. This leads to what you could do. You could build a little cabin, attract that kind of adventurous people. They'd like it and others could come. It could take decades to amount to anything or not and, without the proper infrastructure, would never go beyond. Also, I'm not sure what the zoning would allow you to do.

As a side note, a touch of personal opinion still, which is shared by many people I know and which doesn't directly affect the discussion. Colombia has nice cities but generally doesn't have the best beaches (there are exceptions, as was pointed out), including Cartagena. There are many closer countries and beaches that are so much nicer and much more easily accessible, no further than Mexico to start with.

Also, Colombians are no dummies. Don't you think they'd have figured it out themselves if there was such an opportunity?

Finally, I don't know what experience you have in real estate if any but you clearly think outside the box and it's a valuable trait to have, whatever you end up doing in the world of real estate or beyond.

Hope this is helpful.

Post: Process Of Starting A Real Estate Fund?

Mike Lambert
Posted
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  • The Americas and Europe
  • Posts 1,405
  • Votes 1,206

@Basit Siddiqi

Thank you. Writing (quality) posts takes time that we take out of our "free" time so it's always good for the writers to know that they don't spend the time for naught.

Great that you mention the tax issues, which I didn't comment on because they're not really an issue in the countries where I invest. However, you didn't mention the elephant in the room. It looks that there's no tax treaty for the avoidance of double taxation between the US and Paraguay, which would mean that investors will be double taxed. I assume that Matthew knows that from the beginning if that's the case.

I'm one of the first to say that investors should be careful making decisions based on taxation, mostly or solely but I'll never invest and get double taxed, as that means low returns and I'm not sure which investor would ever do that knowingly. If you make a risky investment overseas, you'd want a much higher after-tax returns than you can get at home. At least, that's what I'm doing!

Post: The 5 Biggest Mistakes New Investors Are Making Here In The Forums

Mike Lambert
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  • The Americas and Europe
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@Jonathan Greene

I found out and read your post today as David and Rob commented on it in the BP podcast 973, which I'd just listened to. I cannot agree more.

Interestingly I just got confronted with #3. I took a lot of time (that I don't have) to answer a query from a newbie on the forum because I wanted to help him avoid making big mistakes and wasting a lot of time and money if I could. I spent some extra time to carefully craft my answer to be as much positive and as less negative that I could I still got and rude and arrogant answer back suggesting that I don't know what I'm talking about. And then I had to reply just because I had to prove to the community that I'm not a complete ignorant and take the extra time to do it with a bit of class (I included a link to this thread).

Since I've been in the forum, I believe I've been one of the main contributors to the international forum and this has been a big part of my contribution bucket. This situation though is the straw that breaks the camel's back and I just made the decision that I'll significantly dial back the time that I spend answering posts on the forum.

Hopefully, more people will read your post and gratitude will win the day over rudeness and arrogance!

Post: Process Of Starting A Real Estate Fund?

Mike Lambert
Posted
  • Investor
  • The Americas and Europe
  • Posts 1,405
  • Votes 1,206

@Matthew C Dominy

I tend to see everything in the best of light so you shouldn't worry about that. This being said, do you realize that I spend some time commenting on your post just to help you and without getting anything in return? Even if what I wrote was a bunch of nonsense, do you realize how rude it is to write "I find it difficult to take the whole thing seriously". You should listen to BP podcast #973, in which David and Rob taked about the following excellent post from Jonathan Green https://www.biggerpockets.com/forums/12/topics/1192867-the-5.... Check out number #3 and than make sure you don't get people to not reply to your posts in the future.

As if it wasn't enough, you added "If you want to get educated...", which is extremely arrogant. Of course, you don't know much about me but, you could see that I have more than 1,000 posts and likes. Had your taken the time to see the kind of replies I make, you might have concluded that they are always fact-based and that maybe I'm not a complete ignorant. Sometimes people disagree with my point of view but rarely with the facts I bring up. Also, for your information, I have received numerous unsolicited messages telling me that I write the best content in the forum.

I have been lending and investing in Latin America for the last 25 years. I've been responsible for credit/risk assessment for one of the largest Canadian bank for the whole area. I've been working on the legal side with the world's best law firms so I'm not sure who should be educating who. Now on to the substance of what you're "educating" me on:

I know that the credit rating was just raised. I know that but BB+ is still junk. It's like saying to parents your sun or daughter's grade has been raised from E to D. Does that make it good? I have no doubt that the bonds were 5x oversubscribed. Small amount and high yield and there's a clientele for that. That doesn't mean it's a good risk. The US is the main investor in most Latam countries by so that means little.

I never suggested that the Paraguayan legal system is useless. If just wrote that it's highly unlikely an investor in your syndication would recover any money in case the investment turns bad. If you don't understand why I wrote that, maybe you should get educated on legal matters pertaining to the region.

To conclude, I wasn't attacking you so there was no need for you to be defensive and there's nothing wrong in dismissing my attempt to help. You could just have limited your reply to "Thank you for your detailed response as well. There are some good pieces of feedback in your reply for sure". There aren't many investors active internationally on here and I could have been helpful to you. Wasn't that better than showcasing rudeness or arrogance? What would a potential investor who doesn't know you think if he were to read your reply?

If this makes you think, it wasn't wasted time after all.

This being said, best of luck in your endeavors!