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

28Understand the Local Bureaucracy

Things like real estate laws, zoning, types of title, and how you can hold title can vary state to state in the United States but in ways that are seldom meaningful to individual investors. The differences when investing overseas can be significant, compared with both U.S. legislation, regulations, and restrictions, and country to country.

The United States uses common law; most countries where you'll be interested in investing overseas use civil law. This has big implications. You can't assume, for example, when making a purchase with your spouse, that, because both names are on the title, you are taking ownership as joint tenants with rights of survivorship. That doesn't exist everywhere.

A guy we knew in Colombia decided to develop a coffee plantation and sell individual parcels within it to investors. A farm manager would manage the plantation. He promised each investor title to his parcel. The investors would get cash flow from harvest sales plus branded coffee as part of their return. The vision was appealing and fun.

The developer had done his due diligence on global coffee markets, farm prices in Colombia, and the equipment, labor, and infrastructure needed for processing harvests, and he even started an import/export company so he could ship his coffee production to North America.

He bought two coffee farms totaling about 40 hectares. One had a processing facility on it. Both had land beyond what had been planted, allowing for expansion. ...