This is a true story.
I was lucky, not smart, when I bought my first Paris apartment, but it was still the smartest thing I ever did. I simply didn’t want to move from my 17th-century pied-à-terre in Le Marais district when the owners wanted to sell.
With a bank willing to give me a 20-year mortgage, I bought it in the year 2000 when property prices were at a low, but on the rise, investing $45,000 as a down payment. The variable rate loan I got proved to be a sweet deal—the monthly payments were the same as the rent had been, and they haven’t risen after all these years. Only the term of the loan goes up or down when rates fluctuate.
Within a few years, the value on properties in the district had almost doubled, so the bank agreed to issue an “equity release” (second mortgage). It funded the purchase of two additional properties in Paris. Those two small apartments were renovated and furnished for luxury vacation rental—the way to earn the most amount of income.
Meanwhile, all the properties went on increasing in value as the Paris property market continued its rise. The rental income successfully covered all the mortgages…and even left a profit. When the euro-to-dollar value was $1.50 in 2007, the same lender gladly issued another equity release loan, enough in euros to purchase an apartment in Manhattan where my daughter had taken up residence.
In the last year, property in Paris rose almost 23%. The Le Marais historical district where I bought my first apartment has shown particular strength—it’s well located in the center of the city and has appeal to both tourists and foreign investors.
I’m now in the process of purchasing a fifth property—an apartment in Nice on the Riviera in the south of France. It’s paid for with another loan of 100% based on the increase in value of the other properties. I plan to rent it out as a vacation apartment so the income it makes will cover the new mortgage.
It’s like playing a game of Monopoly and collecting a portfolio of properties, but as I said in the beginning, this is a true story. The properties are currently valued at a total close to $3.5 million, all based on an initial investment of $45,000. That’s a return of investment almost 78 times the initial out-of-pocket expense.
The purchase of that first apartment was more than just a good investment and a great place to live—it was the first step on the road to building a business. Today, my team and I have helped hundreds of other people do the same—find financing, invest in high quality French property and generate rental revenue. It changed my life, provided security for my future and in addition, it’s been greatly rewarding assisting others in doing the same.
It started out as pure luck, but it was the smartest luck I ever had.
Editor’s note: Adrian’s not alone in turning a profit on real estate…one retired engineer who used his early-retirement severance package to break into the lucrative overseas property market made $47,000 profit in 11 months. Here is how he did it.