How do I invest in real estate from overseas?
I am frequently asked, “How do I invest in real estate from overseas?”
Deployed real estate investing is not easy. Limited time and communication are enough to make anything more difficult, but especially building a business.
The answer varies based on the experience of the investor, but here are my recommendations.
Invest in Yourself
This is true no matter where you live, but the very first investment you should make is in yourself.
Let’s assume you are currently stationed overseas (Korea, for example), and you have decided to get started in real estate. The very first thing you need to do is educate yourself as much as humanly possible on the subject of real estate investing.
You should also listen to podcasts.
Then I would suggest either a Google or YouTube, search to answer any questions you have and explain concepts you didn’t fully understand.
There is nothing more important than having a thorough understanding of the ins and outs of real estate investing. If you don’t know what your “why” is, which strategy you want to use, and what market(s) you want to invest in, you need to continue educating yourself.
Never stop learning.
Deployments and overseas duty stations are great for this because you have fewer distractions. If you find yourself stuck in Korea with crappy internet and not much to do on liberty except hitting the gym or bars, you should spend your time reading/learning instead.
Do this before you do anything else!
The next step you must always be taking is networking. They say your network equals your net worth, and I agree completely that getting around
other high achievers will skyrocket your success!
Networking will not be as easy if you’re overseas and especially if you’re deployed, but you can at least lay the groundwork.
Join real estate Facebook groups (especially local to your target market), set up keywords on BiggerPockets and network with other investors there, and post about what you’re learning when you have Internet access. Constantly surround yourself with high achievers and goal-oriented service members.
Maybe even look into starting a real estate investor meetup near your base or with your unit. You would be surprised how many other service members share these interests. Most of them would be willing to meet up and mastermind about real estate investing!
All you need to do is talk about what you’re learning/doing and people will come out of the woodwork.
You can even attend the meetups in your desired market from overseas utilizing virtual networking opportunities!
Overseas duty stations often pay you an extra cost of living allowance (COLA)
Deployments are a great time to save massive amounts of money! Depending on where you’re deployed you could get hazardous duty pay, combat pay, tax-free pay, separation pay (if you’re married), Per Diem, etc.
There is no reason NOT to save every penny of this additional income!
You could most likely live on less than 10% of your paycheck while deployed and easily less than 25%. I recommend that you maximize savings and bring home as much capital as humanly possible.
That could mean you put 25% of your paycheck into the TSP and 50% into a high-interest savings account. Or it could mean you put 10% into your TSP and 65%+ into a high-interest savings account. I recommend that you at least put 10% of your income into the TSP every month.
The more money you save, the more money you can invest and the faster you can build wealth!
Once you’ve laid the groundwork, it is time to start putting your money to work.
There are many challenges connected with investing from afar. These challenges only compound when you add into the equation huge time-zone gaps, communication restrictions, and inability to take leave and visit properties.
There are many ways you can invest from overseas, but here are some of the ways I would recommend, depending on your goals and experience.
A good way to invest in real estate from overseas is to partner with an investor in your target market.
You need hustle, knowledge, and money to complete transactions. Being overseas, you are limited on the ability to hustle in your target market, but you may have the knowledge and/or money. Find a partner with strengths that complement your weaknesses and make some magic happen!
I have a friend who recently purchased a 42-unit apartment with a joint-venture agreement between himself and two other partners.
You could find a partner at local real estate investor meetups when you’re in town. You might also find a partner through local real estate Facebook groups or the networking tab in BiggerPockets.
Network as much as possible and a byproduct of this could be a long-term partnership.
Make sure that anybody you partner with is someone you would be willing to work with for the duration of ownership. Do your best to vet their background to ensure they are legit.
Personally, I have never partnered with somebody I didn’t know well as a friend or family member previously.
That being said, if the right partner came around, I would not be opposed to a partnership!
Another option you could look into is private lending. I have several friends who have become private lenders along their journey.
You could find an investor in your local market (or any market really) and lend them money as a debt partner. This means you sign a promissory note for a set amount of interest/points that you’ll receive for lending them money, and then you sit back and let them repay you.
This is a simple way to keep your money working for you. Make sure you vet the person you’re lending your hard-earned cash out to!
When you purchase a property that is move-in ready, it is often referred to as being turnkey. This name comes from the fact that all you need to do is turn the key in the door (unlock it) and begin renting the house!
A turnkey company will buy homes that need work, fix them up, and sell them as turnkey rentals. Often, they have a property management team in house or a property management company they work with. Some turnkey providers will even go so far as to place a tenant in the home before selling it!
This allows you to be completely hands-off from the investment property if you would like.
Turnkey real estate investing is often give a bad reputation.
That is because you could receive better returns operating the investment alone.
This may be true, but if you are unable to operate the investment on your own, a turnkey property is better than letting your cash rot away in a savings account.
You will still benefit from cash flow, equity recapture, depreciation, and appreciation as you would with any rental property. Turnkey property in a market with good cash flow and appreciation potential could still make a very solid investment.
One turnkey provider I like is the one you may have heard sponsoring my podcast. Storehouse 310 Ventures is owned by an active duty Navy Officer and has a solid track record. In fact, the biggest issue he was having last we spoke is keeping his inventory of homes up to meet the demand of his buyers!
If you want to look into turnkey investing, email them at [email protected]
Syndication is when a general partnership purchases a large apartment building and pools money from various investors (syndicates) in order to acquire it.
A limited partnership is when you invest passively in syndications. Veteran Pride Investment Group (VPIG) is a syndication owned and operated by veterans who you can hear from on my podcast (Episode 44).
In order to invest in syndication, you need to be either an accredited or sophisticated investor.
An accredited investor is somebody with a net worth of more than $1,000,000 or somebody who earns $200,000/year alone or $300,000/year between themselves and a spouse.
A sophisticated investor is somebody with a large amount of knowledge in the investment strategy. Therefore it can be reasonably assumed they won’t get taken advantage of.
I would be considered a sophisticated investor because I already own real estate investments, and more importantly, I own an apartment.
Because of these strict requirements, syndication may not be realistic for new investors, but it is a great option if you qualify.
VPIG allows a minimum investment amount of $10,000 in their deals. If you were to invest $10,000 into one of their apartments, you would be a limited partner.
In my opinion, this is a good way to invest when you are limited on time and stationed overseas!
Another strategy to invest in real estate from overseas is to read Long-Distance Real Estate Investing from David Greene and take action!
You will need to build a solid team: realtor, property manager, lender, contractor, etc. from overseas.
I definitely prefer networking in person, but there is no reason you can’t build this team virtually. You can utilize ZOOM in order to interview these potential team members from halfway across the world.
You will need to focus on building this team and then systemize/automate your business as much as possible in order to put deals together from overseas.
That being said, I have successfully purchased several properties while stationed overseas in Hawaii. Yes, I realize that Hawaii is not the same as Korea, but the concept and execution are the same.
The only major difference would be the time it takes to get closing documents to you. Signing documents is easy to overcome with a little planning!
How do I invest in real estate from overseas?
Focus on learning, networking, and saving capital. Then decide whether you want to invest in real estate long distance on your own, with a partner, through a turnkey provider, through syndication, or through another strategy you found!
With the right groundwork and the right mindset, being stationed overseas (or even deployed in a combat zone) is nothing more than a speed bump in your investing career.
Look on the bright side: if you can invest in real estate from overseas, you can invest in real estate anywhere! This ability to invest long distance can be a great asset for you!