How to buy Foreign Real Estate

When it comes to moving overseas the best advice is to visit first, then rent for a year or so and only then to buy.  That makes a lot of sense doesn’t it?  Well that is not what I did.  Not by a long shot.  And I know that some of you are interested in buying as well.  It is a great way do diversify your assets and take steps towards residency in many countries.

The trouble with the logical, planned out technique is that it can lead to analysis paralysis.  You can over think everything and never actually do anything.  I know all about this because I did it for years before I actually took the leap.

I  knew about Panama from one of my business partners 5 years before I ever traveled there.  He was telling me about all the great real estate deals, and if I had purchased when I started thinking about  purchasing I would have made a killing.  But I didn’t.  I thought about how cool it would be if I did.  Day dreams.   Wouldn’t it be cool if….  Have you ever done that?

What I did do was to find a partner who was interested in buying as well. This way there was some accountability. Someone to push me when I needed it. This really helped.  (Why do you think Coley and I are doing this blog together?)  It is easier to expand your horizons if someone is pushing you.  Just like exercising.  You push yourself harder when there are others around.

I spent years as a real estate agent and the owner of a real estate company so I knew a little bit about how to get good deals when buying property. The old adage is; Look at 100 properties, make offers on 10 and then buy 1.  That is about how it works.  Here is the systematic approach we took that will help you get the best price, and learn the most information about your market.

1.   Define the boundaries of the area you’re interested in

We picked an area we thought we would like.  This was based on internet research.  We had to know where we were looking, and there had to be strict boundaries so we did not wander.  For us we defined our area this way.  All property between the Coronado and Fallaron areas of Panama on the coast side of the highway.  We did not look at anything across the highway and we did not look past Coronado or Fallaron.

2.  Book Tickets

Then we booked tickets and flew down.  This step is obviously crucial, but somehow overlooked by many.

3.  Gather Data

Next we drove down every single road between the highway and the ocean in our defined area.  We started at one end and worked towards the other, very systematically.   We took pictures of literally hundreds of for sale by owner signs (se vende) and made notes about our impressions of the different areas.  We associated each note with a picture number so we could make sense of it all when we got back to the states.  We constantly pushed each other to talk to strangers about property, which was hard because our Spanish was pretty terrible.  This was hard work, but it was really fun.   There was this sense of excitement that we were actually doing something that we had been thinking about for a long time.  This helped keep the ball rolling because it was so much more interesting and exciting than our 9-5 jobs.

As a former realtor I knew I did not want to waste too much time with agents but we did stop into a few offices to pick the brains of whoever would talk to us.   We basically talked to everyone we could about real estate and it was amazing how quickly we got a good sense of the real estate market in the area.  Prices begin to make sense.  Before this trip I had no idea what dollar per square meter even meant, but it’s a critical benchmark that everyone uses in Panama.

4. Analyse data

When we got back to the states we went through the data and picked out our favorite 10 -20 properties.  We gave a calling card and a couple hundred bucks to a local kindergarten teacher who was from Puerto Rico and spoke flawless Spanish and had her start calling sellers in Panama. We gave her a list of questions to ask everyone.

5.  Make Offers

Lastly we started making offers.  With all the information we had accumulated about the area, we really started to feel like experts.  And the fact is we were.  When we were buying our property I believe we knew as much as anyone about what land was going for.

After we got our property under contract, the ball was rolling and all we had to do was provide the info that the attorneys needed. Tedious at times, but it did not need pro-activity.  Just give what you are asked for.

Of course the next step was to find a builder and build some houses, but I will leave that for another post.  I’ll leave you with this picture of my real estate partner and I.  We had closed on the property in Panama and the picture was taken when we went back down for the first time.

We were standing on property that WE OWNED, in Panama, and it felt GREAT!  And yes that is a bottle of tequila.

Foreign Land Owners

Foreign Land Owners

 

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