Last week I was having dinner in Tulum with Ronan McMahon from International Living and we discussed the different methods of conducting due diligence on the so-called “hot markets”. Not only is it important to complete due diligence, but it’s so important to know HOW to complete it – who to talk to, the questions to ask, what to look for …
For the last year and half I have traveled across Brazil, Peru, Ecuador, Mexico, Costa Rica and Belize to follow through on what Ronan skillfully explains in the video below, that is, exactly WHY these emerging markets can be of such value for our portfolios. Even though our Canadian real estate market is in great shape, it is good and wise to hedge our portfolios towards diversification, and it would be very unwise not to consider property investments in emerging markets. The trick is discovering which ones are golden. As Ronan says, timing is everything.
And they come with perks … the right investment offers two-fold benefits – a short to medium term vacation destination as well as some cash flow to break even. And sometimes, if you look very hard, you can find a project that offers cash flow with 5 to 12% returns Cash on Cash. These are the golden eggs – properties that will deliver handsomely in the 5 to 10 year range, sometimes 2 to 5 years.
I hope you enjoy Ronan’s video on due diligence. I really appreciate and value his expertise in international property. I’m particularly fond of it because it is the path I take (and the method I’m currently using in Costa Rica) when making a full study of an area to sort through the straw men in search of a diamond. In listening to this video you will be able to determine if the strategy makes sense for you.
Be sure to leave me your thoughts and comments on the subject. I’ll send you an update soon from Belize!