Buying Real Estate Overseas For Cash Flow (And A Better Life)

10Preconstruction—Buy Before the Property Is Built to Leverage and Flip and Multiply Your Return

Buying preconstruction, or off-plan, as it's referred to in the UK and Ireland, isn't necessarily a cash-flow investment, but it can be if you keep the property and rent it out. Many investors, though, see a preconstruction purchase primarily as an opportunity for leverage. You take control of the asset by paying just a portion of the purchase price—typically 20% to 50%—over the construction period. And you buy for a discounted price.

We've made preconstruction purchases pursuing both strategies. We bought a preconstruction condo in Spain with the intent to flip it before taking possession, and we purchased preconstruction in Panama intending to keep the asset for rental indefinitely. Both of these experiences rank among our top 10 investments in terms of profitability. The apartment in Panama, which we still own, has come with a lifestyle bonus.

The condo in Spain was, in fact, our first pure real estate investment play overseas. Lief took a research trip along the southern coast of Spain, driving from Barcelona to Huelva, stopping in each active real estate market along the way. In the Costa del Sol, he came across a developer who had just released a beachfront project the day before. Forty percent of the apartments had already been reserved.

Having already seen hundreds of properties on the trip, Lief was convinced that this project was the opportunity he'd come looking for. ...