All Forum Posts by: Ziv Magen

@Will Barnard - yes, some folk leveraged themselves to the gills and got burned for being stupid - others, however, only sinned in that they've taken a mortgage that suddenly became unaffordable and unsustainable, purely due to market downturn, and through no fault of their own. To think that "can't happen to me" is a bit optimistic in my view, therefore (and this is just my own personal preference, as mentioned above) - I prefer to do it the slow, safe, old fashioned way, and only use the money I actually have. Sure, it takes longer to expand - but it's always sustainable, no matter what happens to the market - which I can't control, so I prefer not to depend on to that degree. Not judging anyone who does, just stating my personal preference.

Uwe S., have a look at Leipzig and surrounds, it's been providing some excellent returns for foreign investors in the last five years or so (actually starting to baloon a bit too much now as a result). Completely agree about Berlin, like most internationally renown metropolis, returns are pitiful - I invest in Japan, but would steer clear of Tokyo, Kyoto, Osaka and the Hokkaido ski resorts, for the same reasons. I'm sure SF, LA and NYC, for instance, are the same in the US, aren't they?

Don't know the gentleman, but different people have different goals, criteria and investment strategies. I don't know that there's a "good" or "bad" place to invest (aside from obvious war zones, and even in those places there are particular investor types who thrive)- it all depends on the individual. I know Japanese who invest in the US, got more than a few US clients who invest in Japan, and my mom (plus many others like her) won't look past Australia, even though you'd have better chances finding the proverbial needle in a haystack than finding a positively geared property anywhere but in mining towns down under (and these are here today gone tomorrow - not to mention you'd be hard pressed to buy one property for the price of five in the US these days)...and it goes on and on.. I don't judge anyone's criteria - just sharing information as I find it, for others to make their own choices, based on their own goals and comfort zones.

MJ, as mentioned in another post, I deal mainly in Japan, simply because I love the safe, hassle-free business environment (nobody screws anybody, tenants never harm a property intentionally and are rarely late, and tend to stay 4-5 years on average, with 15-20 year tenants not uncommon too) - but I hear if you spend some time researching and building connections, China's just as good cashflow wise (not nearly as hassle free, but also has growth potential, which Japan is severely lacking in). Europe also has some excellent deals available these days, although the risk factor tends to be much higher as far as tenants are concerned (Spain, Italy, France). Germany, and in particular the northern areas, in and around Leipzig, seems to offer a good balance with excellent tenants as well (although not nearly as high on the rental yields as Japan and china, nor nearly as affordable).

Hi, Chris - we invest primarily in Japan, where condos are the norm for rentals in the vast majority of cases - I think the comments regarding the capital gain being diminished in comparison with more landed properties is quite correct - we focus on monthly cashflow as a main goal, however, with growth being the icing on the cake, if any - and for reliable, high return, we found condos to be the best investment possible for our environment - as long as the appropriate DD is performed, of course.

Great and thorough run-through, Mary Joe, thanks :)
I will say this much though -
1. The "location" theme isn't always as reliable as the sun rising tomorrow, as many used to believe - the same goes for long term appreciation (real-estate always goes up in value, the American dollar is always a good currency to have, Japanese electronics are always no. 1, etc etc - so many axioms out there have proven to be anything but right)
2. The long term ride out strategy is only valid if you're not leveraged "to the gills", as so many seem to forget, and even when you're not, if those 10 years find you losing 70% of your capital on expenses and vacancies, then rising 70% on appreciation, you've done nothing with your money, even lost if inflation is counted.
3. Researching other countries is no different to researching the general real-estate sector for non real-estate investors, researching the stock market for non-stock market experienced newbies, or researching Lithuanian cabinet making for anyone but a third generation Lithuanian cabinet maker - if you've got the brains to workout how to invest in real estate successfully in the first place, you've got the brains to learn how to do it anywhere in the world - it takes a whole lot of reading, networking, common sense and Internet/spreadsheet skills. That's about it - and you're just as likely to get burned or make money as you are in the US.

In any case, as mentioned, thanks for a great and concise explanation - it's clarified a lot.

What Michael and James said -
1) condos have far less surprises entailed in them
2) do the numbers
3) research the HOA
We and our clients invest almost exclusively in condos, following the three rules above (and a few others), constantly providing 9-15% pre-tax, RELIABLE returns. Never looked back.

I live (mostly) in Australia, where the real estate scene is similar (actually a bit more growth oriented) - when real estate capital gain potential stopped providing reasonable reliable promise in 2007, I looked for other countries which did. I know a lot of US investors do the same, but even for those who don't, for whatever reason, doesn't it make more sense to just keep saving with no interest, at least remaining liquid until better opportunity presents itself, rather than risk losing large parts or all of it on a sudden downturn? (I'm not judging or convincing, honestly, just trying to understand the mindset).

Good tips from William there :) I'd emphasise the personality bit - choose your route, at least for the first few years, based on your personality. Are you a hands-on, micro manager type, a number crunching office person, a travel freak,etc etc - the key to successful investing is enjoying what you do, I believe.

Once you have this very basic type of investment philosophy mapped, the rest will begin to slowly fall into place - best of luck and welcome aboard!

Samantha, your automatic assumption that "investment property = rehab" leads me to believe you may be better off learning a bit more before jumping into this endeavor of yours. I think you may be sold on flip/short sale/reality tv style scenarios and believe this is the only type of investing out there - this is very far from the truth, it's only one small segment of the property investment market.