It is a common investment strategy in the U.S. market to buy a property with the intent of quickly reselling it at a higher price. The so-called “buy-and-flip” approach can be profitable here in the U.S., but it is often less so when looking at property in other countries. Obstacles include laws and logistics involving international purchases, the cost of the properties and the higher cost of buying and selling property in other markets.
One option that seems best suited for international buyers is to buy the property preconstruction. Developers are often looking for investors in new projects to help provide cash flow and will offer a reduced price, and investors often can make staged payments. Ideally, the buy-and-flip seller can sell the unit before the final payment is due, but this can be risky of the buyer does not have capital or financing to follow through on the purchase.
Three recommended options
Forbes recently put together a shortlist of markets where buyer/sellers can flip the property:
- Panama: This financial powerhouse has enjoyed massive success and growth thanks to foreign investment. So the country is equipped to work with investors based in the U.S., particularly when it comes to preconstruction investors.
- Dominican Republic: There is a rapidly expanding rental investment market that is still undervalued – apartments can cost $100,000 or less. Pre-COVID tourism and business were booming and should come back.
- Poland: Krakow, in particular, looks promising. Its modest size and the straightforward market makes the city easy to navigate.
What makes sense
Those looking for preconstruction opportunities need to search for markets that are (or were pre-pandemic) quickly expanding with a ready supply of foreign workers or students looking for a place to live. Nevertheless, each country and city will have its challenges, so it is wise to work with a team that has experience with international real estate transactions and financing. This includes knowledgeable real estate attorneys.