international real estate investing - Posted by ed

import · May 24, 2006, 2:11pm

Posted by Frank Chin on May 27, 2006 at 13:40:41:

Dave:

I got detained at Singapore airport when they found a copy of Playboy in my luggage, and they gave me a lecture on pornography being illegal there. Informed me to pick it up on the way out of the country which I was stupid enough to do.

The next stop was Malaysia, and got a form on the plane where I had to check off “no” that I don’t possess pornography, and that if I do, I’ll be subject to fine and jail. What am I to do, I got it in my luggage already, and I spent half the flight thinking of what to say if they found it. Fortunately, they didn’t get to search me on landing.

Explained to my local associate in Kula Lumpur my problem and asked if he wanted the Playboy. He explained that he had a big stash of the stuff in his basement once, that he enjoyed with a neighbor. He had to destroy it when he had a falling out, and the neighbor threatened to turn him in to the police. Says he’ll read it, but then burn it.

The other thing that bugs people are attempts to extort “money” from rich Americans.

The guy who was my supervisor at the “Middle East” desk says they can never find his reservation when he shows up at the airport. But then with a $20.00 bill, and a “can you take another look”, would he hear, “oh, I see it now”.

Then another scam they pull in China and elsewhere. They FORGET to stamp your visa or Passport on the way in, and then accuse you of “sneaking in” illegally. Only after paying a bribe would they correct the situation by stamping your arrival.

An “investment banker” friend of mine was detained for a number of hours at the Cina/Hong Kong border because of this and had the nerve to refuse to pay and insisted on seeing an American representative. They gave up after several hours concluding he was not paying.

Frank Chin

import · May 24, 2006, 2:11pm

international real estate investing - Posted by ed

Posted by ed on May 24, 2006 at 14:11:15:

i’m interested in investing abroad and have checked out a couple sites, namely www.imoinvest.com. can anyone tell me if they’ve ever done this before and if it’s legit? thanks.

import · May 25, 2006, 10:29pm

Re: international real estate investing - Posted by David Krulac

Posted by David Krulac on May 25, 2006 at 22:29:22:

In one country adverse possession is only 6 months. In one country real estate court challenges that might be resolved in US in 6 -12 months take 6-12 years. In one country foreigners can’t own any real estate within 200 miles of the coast. Kind of rules out beach front property. In many countries there are no consumer protection laws, and it is strictly buyer beware. The first time that I went to Mexico the exchange rate was 20 pesos to the dollar. The last time I went it was 3000 pesos to the dollar. Many countries do not have anything like FDIC. We assume that banks are safe places, not so everywhere. Do you speak the native language? Do you know the native customs?

import · May 25, 2006, 10:59am

Re: international real estate investing - Posted by Frank Chin

Posted by Frank Chin on May 25, 2006 at 10:59:20:

Ed:

Others have addressed property management issues, tenant rights relative to owning overseas. There are legal, as well as financial risks to consider, depending on what county one plans to invest in.

If you invest in the USA alone, you don’t have to consider currency risks. If the object is long term appreciation, then it is important to know if one expects the currency will rise or fall in relation to the dollar, long term. In other words, you might find the value of the property had gone up 25%, but the value of the currency had gone down 50% in relation to the dollar, in which case, you’ve lossed money.
Another is currency convertabilty, meaning you might be able to put money in, but can’t take it out. Some years back, a company I worked for sold products to an African nation, messed up the “letter of credit transaction”, and though the customer PAID thru his bank, the country had no exchange to convert to US Dollars. We wound up BUYING a house in that country for visiting reps, to used up the funds, till such time the countries exchange situation improves when the company plans to sell the house. If not, when and if the poperty is sold, the funds stays in that country, since there’s no way to convert it to US dollars.

Other times, countries impose restrictions on “repatriation”, and you might find yourself unable to take the funds out, even though it was OK years ago when you made the investment. Businesses insure against this thru private AIG coverage or OPIC, but I don’t think its available to private RE investor.

In some countries, you don’t own the land underneath the “real estate”, but ownership vests in something similar to a “long term leasehold”. In fact, private ownership of land is an alien concept in some cultures.
I assume you plan to invest in a politically stable country, and not in one subject to revolution. All of my grandpa’s “real estate” investments in China was confiscated when Mao came to power, and relatives of ours who inherited those properties where branded “enemies of the people”, and hauled off to "re-education (concentration) camps.

Frank Chin

import · May 25, 2006, 1:04am

Re: international real estate investing - Posted by Elizabeth NJ

Posted by Elizabeth NJ on May 25, 2006 at 01:04:50:

Ed,

We own investment property overseas but we also have family there to take care of the property and the tenants. In that particular country, tenants have all the rights and it’s almost impossible to get them out. Tenants can tie us up in court for years, so we always look for reasonable solutions to potential problems.

Unless you have family or trusted friends in the country you’re considering investing in, I wouldn’t recommend it.

Just a thought.

Elizabeth

import · May 24, 2006, 9:52pm

Re: international real estate investing - Posted by gerald(tx)

Posted by gerald(tx) on May 24, 2006 at 21:52:05:

I’ve really been interested in France. On new constructed apartments, the government requires all tenants to lease long term and purchase insurance which will guarantee against vacancy as well as damage. Rents are set by gov’t to guarantee cash flow so the owner will profit and it will not have to subsidize housing.

So in effect, your rent is guaranteed. Plus, 4.5% financing was available a few months back. I’m going to be in Europe this summer and plan on doing a first hand investigation.

gerald

import · May 24, 2006, 5:22pm

Re: international real estate investing - Posted by KC

Posted by KC on May 24, 2006 at 17:22:30:

I would suggest you really do your homework if you’re considering real estate investing overseas. Real property laws differ in each country. For example, foreigners cannot purchase land outright in the Phillipines or Thailand, but they can purchase condo’s. The best recommendation I can give is to contact a reputable real estate agent AND a reputable lawyer in the country you desire.

Good Luck.

import · May 24, 2006, 4:11pm

Re: international real estate investing - Posted by John Corey

Posted by John Corey on May 24, 2006 at 16:11:45:

Ed,

I have some hands on experience investing outside the US.

I think we need to narrow the discussion a bit. As each country is different and there are ways to invest that overseas which is not possible in the US how about we flip this around.

Why even take the time to invest overseas? Are you looking to gain exposure to a different currency (like people who buy stock from an overseas exchange)? Do you want to ‘speculate’ on hot markets - mostly markets that are going through legal changes or currency changes?

John Corey

PS. To have a little fun as well as highlight what you would not expect…

In France you can not evict in the winter as it is cold out. In the UK the tenant has to be 2 months late (8 weeks might be more correct) before you can take action to evict if the tenant is on a AST contract.

import · May 26, 2006, 3:20am

Re: international real estate investing - Posted by Bob Smith

Posted by Bob Smith on May 26, 2006 at 03:20:09:

That “one country” sounds like Mexico. Squatters can quickly take your property, title is uncertain because supposed “relatives” of the previous owner can claim rights to your property, and you can’t own beachfront real estate.

import · May 28, 2006, 3:50pm

Re: international real estate investing - Posted by johnB

Posted by johnB on May 28, 2006 at 15:50:05:

elizabeth.

Any update on the title issue in NJ.

-john

import · May 25, 2006, 10:59am

Re: international real estate investing - Posted by John Corey

Posted by John Corey on May 25, 2006 at 10:59:45:

Which country are you talking about when you discussed the tenancy rules?

John Corey

import · May 25, 2006, 11:01am

Re: international real estate investing - Posted by John Corey

Posted by John Corey on May 25, 2006 at 11:01:48:

Gerald,

Are you talking about the lease back programs for holiday homes? Otherwise I am not aware of any legal requirements for vacancy insurance.

If you are talking about the holiday home program I can explain a bit about why the program exist.

John Corey

import · May 26, 2006, 7:36am

Re: international real estate investing - Posted by David Krulac

Posted by David Krulac on May 26, 2006 at 07:36:44:

In Mexico foreigner can’t own property anywhere near the coast. And in Costa Rica there is 6 months adverse possession.

The point is things are different in other countries, don’t ever go anywhere and “assume” laws or customs are the same as US. You will live to regret that.

In some countries stealing is a way of life, much more than US. A fiend of mine was on the beach and somebody stole his shoes. Also in many countries Americans are viewed as very rich and its sort of obligatory to try to wrestle as much money from them as possible. Its almost a game, not yet sanctioned by the international olympic committee.

import · May 26, 2006, 12:57pm

Re: international real estate investing - Posted by Elizabeth NJ

Posted by Elizabeth NJ on May 26, 2006 at 12:57:39:

Hi John,

Let’s just say it’s in the Middle East. I won’t name the country because of the hate-mongers I see hovering on this site lately.

Have a great holiday weekend.

Elizabeth

import · May 26, 2006, 8:10am

Re: international real estate investing - Posted by Frank Chin

Posted by Frank Chin on May 26, 2006 at 08:10:23:

David:

You said:

The point is things are different in other countries, don’t ever go anywhere and “assume” laws or customs are the same as US. You will live to regret that.

Absolutley!!

I worked in the “international finance” aspect of banking, and at the first desk I handled, the Middle East, was filled with horror stories about international business and travel.

A week after I started, a “Rep” made a business trip to Saudi Arabia. The company had a policy that reps visiting there call into the office every 24 hours so we know they’re still “alive and kicking”.

A 24 hour period passed, the rep didn’t call in, so a search went underway. They checked hospitals, the police, with no luck. Then someone thought of checking the local “prisons”.

There they found this guy locked up. The crime??

He called a taxi to go from the airport to the hotel, and the taxi hit and killed a pedestrian on the way. And under local laws, the passenger “is in charge”, and thus and held liable, more so than the driver.

In that country, its customery to ask the victim what should be done. Do they want punishment, a long prison term or death, or a “nice financial settlement”? Fortunately, the victim’s family needed a few bucks, and the company was happy to pay it.

Oh, I was told Saudi prisons don’t supply food, its the responsibility of relatives. This man had to beg for food from fellow prisoners when he was found.

Later on, I was told that another rep, was on business in Nigeria, and bandits held up the taxi he was riding in. They robbed him of everything, stripped him naked, and he ran ten miles back to his hotel stark naked!!

So I started making excuses why I was not ready to go on trips to the Middle East and Africa. I was finally transferred to the “Far East” desk where things appeared calmer.

On my first trip to the Phillipines, they told be to change out of my “suit and tie”, and took me down to the local shops to get me a Phillipine style shirt. They told me that this reduces the chance of my being robbed or kidnapped.

Frank Chin

import · May 26, 2006, 3:52pm

Re: international real estate investing - Posted by David Krulac

Posted by David Krulac on May 26, 2006 at 15:52:46:

In Mexico a person is assumed guilty until proven innocent. Car insurance is an absolute must unless you want to risk jil time.
In Saudi somebody was “detained” for having pornography. What he had in his suitcase was body building magazines.
In the Phillipines, I saw people washing their clothes in the river which contained raw sewerage.
In another country the man who ran the hotel said that there were no rooms availble late at night. Turns out there were rooms but the beds were unmade and men did not make beds, therefore no rooms were available.
In one country the soda bottle is worth more than the soda itself. When you buy a soda to go, they empty the soda into a baggie for you and keep the bottle.