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International real estate

Financing International Real Estate Investing

International real estate

Part Three of a Three Part Series
By
Gary Scott

While living I was able to take advantage of financing International real estate investing in London because of the falling pound. If you have not read parts one and two of this study use the arrow above to read them first. I noticed that Lloyds Bank, one of the London banks I used, was just beginning to issue a new executive gold card which included an unsecured 7,500 pound line of credit. This looked like it could be good for financing international real estate investing.

Financing International Real Estate Investing Opportunity

I recommended that clients apply for these credit cards to finance their international real estate investing by borrowing the 7,500 pounds and convert them into a hard currency for investment into London international real estate which was priced so low.

I helped these investors buy property in the Queensway area of London.

Map shows Moscow Road area where we helped investors in Financing International Real Estate Investing from Londontown.com

Financing International Real Estate Investing Profit

Those who took that advice profited nicely. The pound fell over the next year back to US$1.40 per pound. When they took the loan, they were able to convert the pounds into dollars at US$2.20 rate and obtain US$16,500. When the pound reached $1.40 per pound, it took only $10,500 to buy the 7,500 pounds required to pay off the loan. Those investors made a quick 60% before they even made an investment! Thus they earned a return on their dollar investment plus made a huge foreign exchange gain, plus gained huge profits on the real estate they bought.

Financing International Real Estate Investing Lessons

There are several lessons we can learn from this three part case study.

Financing International Real Estate Investing Lesson #1: Fortunes can be made just because of currency moves. In this real example, investors made 60% on the money they had at risk in just over a year, from just the currency move!

Financing International Real Estate Investing Lesson #2: Timing is of utmost importance. In this study, investors borrowed their loans at almost exactly the right time. Had they borrowed a year earlier they would have waited much longer to make a profit. Had they borrowed later they would not have made a profit at all.

Financing International Real Estate Investing Lesson #3: Great losses can occur because of currency moves. Any investor who borrowed pounds and converted them to dollars a year later suffered a loss. After the pound reached a low in the US$1.40 range, it then strengthened back to US1.90 and maintained that strength for several years. An investor who borrowed pounds and converted to dollars at the 1.40 rate received $10,500. $10,500 converted at the $1.90 rate would create only 5,526 pounds, a loss of 1,974 pounds or a loss just from currency moves of about 26%.

Financing International Real Estate Investing Lessons #4: Borrowing can leverage profits or losses from currency moves. In the case study, investors made as much as 60% (or could have made a 26% loss) only on borrowed money at risk. They did not have to invest their own cash.

Financing International Real Estate Investing Lesson #5: When currency and real estate prices are distorted together profits potential becomes almost phenomenal.

International Real Estate Investing

British banks used to issue bank notes. Now they issue loans instead. Picture above from Rampantscotland.com

Gary

Get more details about International Business and Investing courses. See GaryScott.com/catalog

For more on international real estate investing distortions go to successguidelines.com

International real estate
Financing International Real Estate Investing
March 17, 2005
International real estate

 

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