All Forum Posts by: Francisco Leal

Quote from @Saba Nader:

Quote from @Francisco Leal:

Hey everyone!

I'm thrilled to join the Bigger Pockets family. Currently based in Madrid, Spain, I'm looking to invest in real estate in Miami. I'm quite disillusioned with the situation here in Spain, and here are a few reasons why:

- We have a socialist government keen on hiking taxes and undermining businesses.

- We're grappling with the social phenomenon of "squatters", individuals who don't pay rent and the government allows them to live in your property rent-free for 24 months before eviction.

- Spain's population pyramid is a mess, with sky-high taxes and increasing insecurity in many areas.

- The rental yields in premium zones of central Madrid barely reach 3.5% - 5% gross due to government policies, such as the rental index imposed by the socialist government.

For these reasons and many more, I'm considering investing in Miami. I've noticed that in Miami, gross rental yields can reach 10%, with greater legal certainty and just an 8-hour direct flight from Madrid.

My plan is to enter the Miami real estate market in cash, demanding a good discount. What do you think of this plan? What warnings could you give me when investing? I'm willing to travel to Miami once or twice a year and manage the properties from Spain, hiring a good property manager to address issues, find new tenants, manage payments, and clean the property for new tenants. Do you think this plan could work?

Looking forward to your opinions and advice!

 Hi Fransisco,

Welcome to Miami! It's no secret that Southern Florida's real estate as a whole has finally got the attention it deserves, and Miami is leading that charge. Here are a few points to the comments you made:
- no rent control, rent prices have jumped drastically year over year
- no squatters, Gov Desantis just signed an anti squatter law (House Bill 621)
- high US interest rates, cash buyers have substantial leverage in negotiation as interest rates have kept domestic buyers at bay
- no signs of slowing down, everywhere you look you will see world-class developments in the works 

let me know if you'd like to discuss further

Hello,

Thank you for welcoming me and for sharing your insights! Your comments are music to my ears, especially the news about the "Anti-squatter" law.

Just as I was writing this post, I heard on the news about a situation in Madrid, where a neighbor has been dealing with a delinquent tenant for 4 years without being able to evict them. It's really frustrating to see how these situations are being exploited. 

Also, I appreciate your willingness to share knowledge. If it's not too much trouble, I would like to know what net returns can be obtained in Brickell or Downtown with one-bedroom apartments.

Thank you again for your help!

Quote from @Kai Kopsch:

I began investing in the US real estate market as an international buyer in Florida, seizing opportunities with foreclosures back in 2008. Fast forward to 2024, while Miami may not offer the 10% gross yields it once did, there are still numerous regions across the US where real estate investment yields are significantly more lucrative than those in the EU. It’s crucial to acquaint yourself with FIRPTA regulations, which mandate income tax withholding on the disposition of U.S. real property interests by foreign individuals. Before diving into the US market, ensure you have a solid understanding of these rules. If you have any inquiries or need additional help, don’t hesitate to contact me. Wishing you the best in your real estate endeavors in the US!

Thank you so much for sharing your valuable insights and advice! I truly appreciate the information you provided and the guidance you've offered. FIRPTA regulations are indeed crucial for international buyers like myself to understand before venturing into the US real estate market. Your reminder about the importance of familiarizing oneself with these rules is greatly appreciated.

Your experience and knowledge are invaluable, and I'm grateful for your willingness to offer assistance. If I have any further questions or require additional guidance, I'll definitely reach out to you.

Wishing you continued success in your real estate endeavors in the US!

Quote from @Bruce Woodruff:

@Francisco Leal Lol, at first I thought you were talking about some areas in the US. Some politicians are trying their best to head in that direction.

As you know, In the US, laws are generally made state by state or even more locally. So choose your area based on this as much as what your return will be. No point in having a killer return just to have the Govt regulate your profits, right?

For instance, moving from Red Florida to Blue Detroit might get you slightly better returns for a while, but what about in a few years?

This is just my advice based on experience and anecdotal evidence. I have not done REI in Florida - but that would be one of my first choices based on other factors we are discussing.....

Best of luck to you!

Thank you so much for your comments and for taking the time to share your insights with me!

I truly appreciate your encouragement and support for this new venture. It means a lot to have people like you willing to offer advice and warnings, which I highly value.

I'm completely open to hearing your suggestions and experiences. Sending you a big hug and thanks again for your support!

Quote from @Saba Nader:

Quote from @Francisco Leal:

Hey everyone!

I'm thrilled to join the Bigger Pockets family. Currently based in Madrid, Spain, I'm looking to invest in real estate in Miami. I'm quite disillusioned with the situation here in Spain, and here are a few reasons why:

- We have a socialist government keen on hiking taxes and undermining businesses.

- We're grappling with the social phenomenon of "squatters", individuals who don't pay rent and the government allows them to live in your property rent-free for 24 months before eviction.

- Spain's population pyramid is a mess, with sky-high taxes and increasing insecurity in many areas.

- The rental yields in premium zones of central Madrid barely reach 3.5% - 5% gross due to government policies, such as the rental index imposed by the socialist government.

For these reasons and many more, I'm considering investing in Miami. I've noticed that in Miami, gross rental yields can reach 10%, with greater legal certainty and just an 8-hour direct flight from Madrid.

My plan is to enter the Miami real estate market in cash, demanding a good discount. What do you think of this plan? What warnings could you give me when investing? I'm willing to travel to Miami once or twice a year and manage the properties from Spain, hiring a good property manager to address issues, find new tenants, manage payments, and clean the property for new tenants. Do you think this plan could work?

Looking forward to your opinions and advice!

 Hi Fransisco,

Welcome to Miami! It's no secret that Southern Florida's real estate as a whole has finally got the attention it deserves, and Miami is leading that charge. Here are a few points to the comments you made:
- no rent control, rent prices have jumped drastically year over year
- no squatters, Gov Desantis just signed an anti squatter law (House Bill 621)
- high US interest rates, cash buyers have substantial leverage in negotiation as interest rates have kept domestic buyers at bay
- no signs of slowing down, everywhere you look you will see world-class developments in the works 

let me know if you'd like to discuss 

My approach is straightforward. I aim to purchase two apartments outright in either Brickell or downtown Miami—properties with minimal HOA expenses.

The primary goal is to generate rental income.

To manage tenants effectively, I'll enlist the services of a reputable property manager.

While I understand leveraging debt could yield higher returns over time, for these initial transactions, I prefer the security of buying outright. My objective is to put idle funds to work efficiently.

I'm not seeking anything extravagant, just a simple yet effective investment strategy.

Quote from @Michael Smythe:

@Francisco Leal we work with several investors that have sold their Florida investments to move their money to our Detroit market for better returns.

 Hello, thank you for replying.

What yields can be found in Detroit?

How profitable can you be in Miami?

The socialist government of Spain is preparing a devastating blow to the long-term rental market across the country. I'm not making this up; you can verify the impending problem by visiting this URL: https://serpavi.mivau.gob.es/. 

To illustrate the seriousness of the situation, consider this example: an apartment on Calle Princesa in Madrid, a premium area, valued at 450,000 euros and 70 square meters, will be legally required to rent for a maximum of 950 euros per month. However, the current market price is 2000 euros. This means that the Spanish government's rental price index will force us to achieve a paltry 2.5% gross return on our premium area apartment.

Additionally, the situation with "squatters" (Okupas)  is worsening in all areas of Spain, including in areas considered "ultra premium" such as "La Finca" in Pozuelo de Alarcón, where footballers and singers reside (Cristiano Ronaldo lived there when he played for Real Madrid). I'll leave you a link to a house with a "delinquent tenant" being sold at half price as evidence of the severity of the situation.

URL Idealista: https://www.idealista.com/inmueble/103002911/

"! LEER ANUNCIO! NO SE PUEDE VISITAR! LA VIVIENDA SE ENCUENTRA CON INQUILINO MOROSO! NO SE PUEDE FINANCIAR! COMPRA AL CONTADO! DESOCUPACION INCLUIDA EN EL PRECIO!"

" ! READ AD! CAN NOT BE VISITED! THE PROPERTY HAS A TENANT IN ARREARS! CAN NOT BE FINANCED! CASH PURCHASE! VACANCY INCLUDED IN THE PRICE!"

The birth rate curve in Spain is worthy of a horror movie. In a few years, we will face an avalanche of retirees and a significant decrease in the number of births. To maintain the welfare state, healthcare, and social benefits, the Spanish government is planning to raise taxes to unprecedented levels. 

Source: https://es.wikipedia.org/wiki/Demograf%C3%ADa_de_Espa%C3%B1


Trust me when I say Spain is in a very complicated situation.

It sounds like you're in a challenging situation, but there may be some options to explore before considering selling your home. Here are a few ideas:

1. Refinance: Given that your interest rate is on the higher side, it might be worth exploring refinancing options. With a better credit score and improved financial situation since buying the home, you may be able to qualify for a lower interest rate, which could significantly reduce your monthly mortgage payment.
2. Rent out a room: Since you're interested in purchasing more properties to rent out in the area, consider renting out a room in your current home to help offset some of the mortgage costs. This could provide a steady stream of additional income while allowing you to stay in the home you like.
3. Short-term rental: If renting out a room isn't feasible, you could explore the option of short-term rentals through platforms like Airbnb. Depending on the demand in your area, this could potentially generate enough income to cover a portion of your mortgage payment.
4. Negotiate with your lender: It's worth reaching out to your lender to see if there are any options for restructuring your loan or modifying your payment plan to lower your monthly payment. They may be willing to work with you, especially if it means avoiding default or foreclosure.
5. Consider a home equity line of credit (HELOC): If you've built up equity in your home through forced appreciation, you may be able to leverage that equity with a HELOC. This could provide you with access to additional funds to help cover your mortgage payments while you explore other investment opportunities.

Ultimately, it's important to carefully weigh your options and consider the potential long-term implications of each decision. Consulting with a financial advisor or real estate professional may also be beneficial in determining the best course of action for your specific situation. Best of luck!

Hey everyone!

I'm thrilled to join the Bigger Pockets family. Currently based in Madrid, Spain, I'm looking to invest in real estate in Miami. I'm quite disillusioned with the situation here in Spain, and here are a few reasons why:

- We have a socialist government keen on hiking taxes and undermining businesses.

- We're grappling with the social phenomenon of "squatters", individuals who don't pay rent and the government allows them to live in your property rent-free for 24 months before eviction.

- Spain's population pyramid is a mess, with sky-high taxes and increasing insecurity in many areas.

- The rental yields in premium zones of central Madrid barely reach 3.5% - 5% gross due to government policies, such as the rental index imposed by the socialist government.

For these reasons and many more, I'm considering investing in Miami. I've noticed that in Miami, gross rental yields can reach 10%, with greater legal certainty and just an 8-hour direct flight from Madrid.

My plan is to enter the Miami real estate market in cash, demanding a good discount. What do you think of this plan? What warnings could you give me when investing? I'm willing to travel to Miami once or twice a year and manage the properties from Spain, hiring a good property manager to address issues, find new tenants, manage payments, and clean the property for new tenants. Do you think this plan could work?

Looking forward to your opinions and advice!