Foreign Real Estate Investment | The STRR Podcast #79 | Tim Hubbard

I talked before about searching for a property in a new country, investing again outside of the US A lot of you know already a property in Colombia, but I officially got my own itsy bitsy slice of Brazil. It's a sealed deal, it's done, it's in my name and I want to break down the whole process and some of the challenges I had and some of the things I'm excited for if you guys are considering buying property outside of your home country. So stay tuned. Let's dive, dive into that this week on the Short Term Rental Riches podcast. Welcome to Short Term Rental Riches. Quick actionable ideas to help you along your real estate investment journey, but with a specific focus on short term rentals. I have a very exciting episode this week. Well, it's exciting for me. I hope that it's exciting for you guys too. Or for those of you that are looking for international property, or maybe those of you that already have some international property. Some things to consider, maybe a couple tips for your next acquisition. So it's official, officially closed on a property here in Balniario Camboriu in the southern part of Brazil. I know that's a tough one to say. I still mess it up most of the time. But it's a beautiful, beautiful place and I want to just talk about the process. I want to wrap it up for you guys from start to finish. When I started looking, when I started researching, how I did that research, who I worked with, when I got here, where exactly the property is, why I like it and why I think it's a good investment, how I paid for it and some of the challenges with that. And then a couple little extras in here as I prepare for renovation. And also a couple tidbits on preparing to potentially run it as a short term rental in the future. And some of the things I'm doing in advance before the renovation. So let's just jump right in.

So before I even got here, this city popped up. I was in the same state, Santa Catarina, last year for three or four months. When Covid started, I was in Florianopolis, which a lot more people are probably familiar with. This is a city about an hour from there that a lot of friends of mine had really recommended for its safety because it's on the beach, great medical, and just an easy place to live.

And I would say now, after spending three or four months total here, I have to agree 100%. This place is beautiful. It's just so easy to live here. Everything's pretty close, amazing restaurants.

The value of Our dollar is incredibly strong right now, so you can live like a king down here for very, very little. Amazing restaurants, amazing beaches, amazing people. I really liked Brazilian Cult. That's what brought me here in the first place. Now when I was in Colombia later last year, I started doing a lot of research on this place because I was looking to branch out into another country, to diversify out of the US dollar a little bit. And I went on YouTube and sure enough, there's multiple YouTube channels, specifically about the real estate in Balneario right here, which isn't a huge, huge city. There's about 150,000 people that live here. But in the tourist season, it'll swell to almost like a million people or even over a million people. So there was quite a lot of information on YouTube. This was also a great opportunity for me to practice my Portuguese because the channels were in Portuguese. But, you know, if you're looking in another country, there's a Little feature on YouTube you can just hit the captions so you can put closed captions on and read the subtitles as well. So little trick for you if you're looking at a new country where you don't speak the language.

So I was doing research before I got here. I was talking with friends, trying to get referrals. So I did talk with a real estate agent before I even got down here. He sent me a few things and of course I was looking online at the websites. But if you remember from the last podcast where we introduced this topic, a lot of those websites aren't very accurate. Go back and check that one out if you haven't already. So I was doing that research online, but I was taking that all with a grain of salt when I got here. That's when I really started peeking my head out there, talking with real estate agents, letting them know exactly what I wanted. So I saved a list of exactly what I wanted. I had it in WhatsApp and I would send it to agents because we know in most countries in the world, an agent might work with a few properties. There's no MLS down here. So I was sending the same message to everyone so that, you know, wasn't wasting their time or mine looking for something I didn't want and a price range I didn't want. So I had a really good idea before I got down here. Now I found a place was awesome and I got a referral for a lawyer who made things so much better. And my Portuguese is okay, but I don't know about you, I can't even Read legal documents in English. So I found a lawyer that spoke English and it was such a big help. And he actually owned property in the US as well, so. So he's familiar with sort of that process. So he helped me make sure our contract was in place. There weren't any weird things in there after we had agreed upon a price. So that was a ton of reassurance. Made me feel better, made me more comfortable, and we became good friends. It's great. And he had other references for contractors, things like that. So your lawyer can be a great resource in these new places that you're checking out.

Now. One of the big challenges I had as a foreigner is bringing money in. As a foreigner, you can't just send thousands and thousands of dollars across a border without raising some red flags. So you have to prove where the income comes from. In this case, my proof was from a property that I sold in the us So I had savings and prior sales of properties that allowed me to prove where this money was coming from. Now, setting up an account in Brazil as a foreigner, that was nearly impossible. I probably talked with 10 banks, talked with all my friends. You essentially can't set up an account if you're not a resident. So there are other ways you can look at transferwise. But I found one account that allowed me to do it as more of a brokerage account. So they don't have a debit card or anything like that that I can use, but they specifically just work brokering money across. So that was the biggest challenge, but got it figured out and got my money exchanged at one of the highest historical exchange rates between the Brazilian real and the US dollar ever in my whole lifetime. So really excited about that. I think I got some really good value. So that was a big challenge getting the money over. And that's going to be a challenge for anyone trying to get property in new country. So just consider that, see if you can find that out before. Because this is the thing. If you find a property and you don't have a way to pay for it quickly, well, someone else could buy the property. Especially if it's a good one, it's gonna. It's not gonna be available anymore. So you really gotta check that one out.

So I got the property, we closed. I made sure everything was good with the lawyer on the documents, got registered with the city, all that paid the taxes, and now I'm looking to renovate it. I love renovating properties. Well, I shouldn't say personally renovating them, but I do love designing interiors that's kind of how, you know, this whole short term rental thing got started. I was designing a property for myself and decided to put on short term rental. And now, you know, dozens of properties later and lots of designs later and I still really like doing this. So this property I've got some great plans for. I found several contractors through referrals, through friends and I met with multiple contractors and I decided to go with one I'm super excited about. I saw projects he's currently working on, also projects that he completed. We picked out all of our materials together and we're ready to go. Pretty much I'm leaving here in a couple days, probably going to take about three months to do the renovation. It's a pretty big one. We'll put some pictures.

Foreign.

Some of the reasons that I just want to break down real quickly that make this a good investment, I believe a good investment. And what you might want to look for if you're looking for a short term rental in a new country, these are my top ones. For one, if you have the US dollar, if you have the euro, you have a ton of value right now in your dollar versus other countries. So look at the exchange rate. That can be really, really good. And if you're looking to div the US now is a good time to do that. So I really like that. I bought a used apartment. There's plenty of new apartments going up. In fact, there are apartments in this same neighborhood for sale for five times the amount per square meter that I paid for mine. Now my Property is about 19 years old, so it's not that old. And to be that close to properties selling for that much more, that makes me think that I got a pretty good value. Now another component to this is I'm in an area, it's actually a little peninsula very close to the beach that there's no more land, so they can't build anymore. So it's kind of like a San Francisco scenario, you know, with limited space and increased demand, the prices are going to go up. So I hope that trend continues. It's been in that direction for a long, long time. And they're building these incredible buildings there. I can't believe it. Many of millions, millions of dollars, American dollars. I'm talking. So to be so close to so many luxury properties, but also at a great value, which I believe is probably near or at construction cost. That is a good metric you can use anywhere. If you think you're in a good neighborhood or a good market and you're buying for what's close to construction cost. Well, that should make you feel pretty comfortable. I mean, to be in a prime location near the beach in a place that's been doing really well. It's landlord friendly and it's tourist friendly. So there's no short term rental regulations on this building. In fact, they really cater to tourists here because the city every year, November, December, January, February swells like 10 times with the amount of people that it does in the off season. So they're very tourist friendly. I can rent short term if I want. There's no condo regulations. So that was a big piece. Being near a beach that they're expanding, they're literally going to double the size of the beach that's, you know, only 100 or 200 yards from here. It's one block. So that's probably going to change the value of property that is in an area where they can't build more. When you think, I mean, the beach is packed. It's one of the big reasons people come here. So there's some really great factors in here. But in the end, this isn't 100% investment for me. I just love Brazil and I love this city. And so this is also a personal thing for me. And if the rents don't work out or anything like that, I'm okay, really having this apartment not make me any money. So consider that if you're looking, you know, in other countries or if there's a bit of personal touch to it, it doesn't necessarily have to meet all your investment criteria if there's some personal part into it.

In anticipation of potentially renting it out. There's a couple last few tips that I want to give you for finding a team before you're even ready. And it's pretty easy. I may have mentioned it in other podcasts, but essentially I was staying in Airbnbs down here. As I did research, I was staying in other Airbnbs and I was talking with the hosts and I was also talking with other managers that are managing other short term rentals. So I met with one who did a great job. I knew she did a great job because I was staying in one of her properties. Communication was great. Housekeeping was great. Property met my expectations. So I know that she could be a good potential candidate to manage this property for me in the future. And I also got a housekeeper from her if I decide to manage myself. So that's a really good way to kind of get in early, get some good contacts and to set some things up maybe before you're even ready with your property. But just a little quick tip on finding management or housekeeping or maintenance, really, before you're ready for it. Just stay in other BNB's and talk to the owners. Talk to the host. So hopefully you guys got some value out of this. If you're thinking about looking for an international property, it's super exciting. I mean, we live in a. The world is so big now. I know it's felt closed off because of COVID and everything, but it's so big. And we've got more people working remotely than we ever have before, so it's easier to travel around. And so this idea of having international property or property in another country, it's a lot more realistic for us. We can leave where we were born, where we've grown up, and we can go work in a totally different country that's a totally different culture and that we can learn a ton from. So until next time, thanks for tuning in again to the Short Term Rental Richness podcast. You guys are awesome. I hope you have a fabulous week and I will see you soon.

Sam.