Recently I told readers of my Roving Real Estate Investor e-letter that studies have shown residential real estate, not equity, has been the best long-run investment over the course of modern history.
I told you how real estate is an asset we control, that can’t be inflated away, and that we can buy with other people’s money.
And because real estate provides such a basic need, demand grows along with population growth, while supply remains constrained by a constellation of factors, driving up values.
I learned about the magic of real estate at a very young age. My parents owned some rental properties that were generating income. And when they explained to me how it worked, it blew my mind.
The idea that a bank would loan my parents the money to buy a piece of real estate, and the rent the tenants paid covered the mortgage was a revelation. Even at a young age, I knew it was an astounding deal.
And so my love of real estate was born.
But it was only later that I discovered the real reasons why real estate stands head and shoulders above any other investment.
With real estate, if you are willing to open your mind to a location beyond your own backyard, it’s easy to spot winners. And in doing so, you can jump from acceptable returns into the next level.
When I started investing in real estate after leaving college, I was lucky enough to hit upon a buying moment in my native Ireland. I saw massive gains in just a short time. In fact, values nearly doubled in a few years.
Then someone offered me more than a home I owned was worth, so I sold. It was that simple.
And I knew it was something I could do again. I just needed to find the next place where those set of circumstances were in play.
In Panama, I found what I was looking for. I got in when the market was at the start of an upward growth trajectory. I bought with just $5,000 down. I pocketed $73,000 by buying a preconstruction condo for $147,000 and selling shortly after delivery for $220,000.
If you know how to recognize a buying moment, you can make a killing.
And if you’re willing to look overseas, you’ll always discover a destination where the buying moment is now.
And right now, thanks to the crisis, you will find many such destinations… (I’ll be telling members of my Real Estate Trend Alert group about them.)
I like to buy in places with supply constraints and growing demand.
A beautiful thing about real estate is that unlike dollars, you can’t print 2 trillion homes overnight. Supply is limited by the complex intersection of land, permits, capital, machinery, materials, and skilled entrepreneurs.
And you don’t need a complex equation to figure out what happens when more people want a scare thing: the price goes up.
As the price goes up, people start panicking that it will go up more, so they feel they need to act, and someone offers you more money than the property is worth. That’s when you sell.
I like to buy when everyone else is running scared and I can get high-yielding property at a hefty discount. I like to sell when everyone is buying and prices are high.
Find a destination in the grips of an economic transformation and with a little know-how you can find incredible double-your-money deals. Likewise, you’ll often find such opportunities with a Path of Progress event—a new infrastructure project, a tourism boom, etc.
In a major crisis moment, like the one we’re in today, we can find such destinations and buy with as much as 50% off. A combination of motivated sellers and currency shifts, plus historically low rates if you’re financing, make for a potent combination…
So, to recap…
- By investing in real estate, you’re tapping into the best possible long-run investment.
- And by being location-flexible, you’re supercharging your ability to pick winners and profit.
And if you’re a Real Estate Trend Alert member, you have another crazy powerful advantage: group buying power.
If we were lone investors, we’d have to compete in the same competitive field as everyone else. But as a group, with a network of contacts and insiders around the world, we can wield extraordinary influence. Our group buying power means I can negotiate directly with developers and lock-in significant discounts and get in before anyone else.
We can essentially win the race before the gun even fires.
This is what members have been doing with astonishing success throughout RETA‘s 12-year history.
This current crisis is going to play out differently in different parts of the world. In countries on an uptrend, like Panama, I expect it to be a short, sharp interruption to the long-term trend—with the emphasis on short. These are the kinds of places where we can get special situations discounts like the $65,700 bailout members got in our recent Surfside deal.
In places on a downtrend, like Italy and Spain, we will see big falls in value of best-in-class real estate. I’m figuring on 30% in Italy on prices that have been already been falling for 15 years. More in parts of Spain. The value of marginal real estate in the hills and empty villages will go to zero. And the “free house” trend will go into overdrive.
Trends that RETA are already investing in will accelerate. The new world we are left in will be different, and this will play into our hands.
Social shifts, like the sudden normalization of remote working, will change home buying behavior. In the new normal, more people will work from home…and home can be anywhere. This means more people living near the beach in Tulum or working from a café in Medellín. Places where RETA members can buy with exceptional RETA-only discounts.
It’s the opportunity we’ve been building towards. There’s no moment when Real Estate Trend Alert’s group buying power has greater collective value than in a crisis. And I aim for my members to make the most of it.
Wishing you good real estate investing!
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