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  1. #87

    To date Argentina is the only country ever that has defaulted on its external debt.

    Redondo. Argentina is among a few countries that has defaulted, but not the only one. But I agree that is was the most spectacular one.

    Saludos M

  2. #86
    About a secure rental income in Argentina.

    It's anything but secure of course. Tourists can leave and that is not unlikely with this high rate of inflation. Furthermore you need to have an ocupation-rate of around 80-90% to get a good ROI (atleast higher then you can get on a bank-account) and that can easily drop to 50-60%.

    Second you have to consider that it might be hard to sell your property. The BA housing market is a sellers market and not a buyers market which means it's hard to sell your property (especially a high end one) I would say the average selling-time of a 100k apartment is about a year or even more. The selling process is also time consuming (reservas, which can easily result in your losing 3 months time because the buyer can't finance his buy or can't sell his home.

    In 2006 there have been around 60.000 real estate transactions, which is nothing of course in a 4.500.000 people city and this is a time of economic prosperity.

    Third you also have to consider that it might be hard if not impossible to bring your dollars out of the country. To date Argentina is the only country ever that has defaulted on its external debt. That should say you something about the way Argentina sees foreign investment. Argentina has also gone through numerous cases of hyperinflation and economic crisis.

    If you plan to stay at least 5 to 10 years and / or are married to an Argentine, have a business or a job in Argentina it's different offcourse. If you are willing and can maintain your home you should be fine.

  3. #85
    Excellent view point and advice Hunt99. We are starting to see more foreclosures in Bay Area too. Mortgages are at a premium over equivalent rents here so from an investment standpoint its cheaper to rent then own. However there are many buyers that have income and growing families that want the their own home or a larger home and even though they admit appreciation potential over the short term (1-5 years) is very low are in the market. Also there are other external factors here a) maturing stock options where to put the money? b) grants from companies to new employees to buy a house with down payment assistence.

  4. #84
    Senior Member


    Posts: 1543
    Quote Originally Posted by Moore
    According to a recent article by Ben Stein, real estate in one of the strongest markets, Southern California, has performed just so over the past 25 years - it barely kept up with inflation.

    Breaking even maybe a great investment in places like Argentina but not USA.
    Ben Stein's articles are posted every other Monday here:

    http://finance.yahoo.com/expert/arch...fe/ben-stein/1

    He's a good writer and a shrewd financial mind, and on every other Monday morning his column is one of the first things I read with my coffee.

    His column from January 19 made the point not that real estate is a bad investment, but that for the long term, the stock market is better. I certainly agree with him. But let's do a small exercise where we consider buying investment real estate in a market where there is no price appreciation beyond inflation.

    Let's say that in 2007 I buy piece of rental real estate for 100,000 dollars. I put 20% down, with an 80K mortgage at 6.5% for 30 years, which is $500 a month. Because I don't overpay, in 2007 I am able to charge rent equal to what my mortgage, taxes, insurance, management, and maintenance would be. Let's say $600 a month. A lot of people who get in trouble in real estate overpay and thus are "upside down."

    I raise the rent it in line with 3% inflation over the following 20 years. My mortgage payment always stays at $500 a month, but at the end of 20 years I'm bringing in rent of $1,083 a month. Meanwhile, my mortgage has gone from 80K to 44K. In inflation-adjusted value, I gained 36K, and earn nearly double in rent what my cost is. Not a bad investment over 20 years, to be sure. What was the key to this success, even though I didn't earn one dime in appreciation over 20 years? Not overpaying up front. (Keep in mind we have ignored the depreciation and tax-advantaged capital gains investing elements from this example, as well.)

    The second lesson: Investments are for the long-term. "Flipping" is for speculators. In my hometown a lot of these guys who bought condos in late 2005 with the expectation of a quick turn-around are getting killed. One condo complex in particular that I have my eye on. A number of 1BR units were sold in 2005 for 420-30K. There are units on sale in the condo right now for 330K. Rents top out at 1, 400 a month for a one-bedroom. But even at 330K, the units are highly overpriced for me. I will not buy unless or until the price drops back to the 190K range. If I paid more than that I would be "upside down. " There were two bank foreclosures in this facility, and NO buyers at the auction (meaning nobody offered to buy the units for the amount of mortgage on the unit). Which means that the bank owes them. The bank is going to take it in the ass on this deal. Hopefully several units in this place will end up as REOs, potentially. But not guaranteed. Driving the price down to my preferred level.

  5. #83
    Senior Member


    Posts: 1043
    Quote Originally Posted by Hunt99
    In addition, real estate tends to hold value in the face of inflation much better than any other investment.
    According to a recent article by Ben Stein, real estate in one of the strongest markets, Southern California, has performed just so over the past 25 years - it barely kept up with inflation.

    Breaking even maybe a great investment in places like Argentina but not USA.

  6. #82
    Senior Member


    Posts: 610
    Quote Originally Posted by Saint
    Money isn't everything.
    Boy is that funny coming from Saint. Literally, everything he posts is about how rich he is, how important he has become and how he socializes with the rich and powerful all due to his success.

    He doesn't post about how nice the people of BA are or how great the weather is or the food or the great clubs. What he posts is how much money he has (supposedly) made, how many properties he has, how much revenue his company has (supposedly) generated.

    Money isn't everything? It's your GOD, Saint!

    Boy, that is probably the most hypocritical post ever made onto this forum.

    Amazing.

    Stowe

  7. #81
    Senior Member


    Posts: 1543
    Quote Originally Posted by Badboy13
    Anything you say Nostradamus. Next time I buy a property, I'll call you up and you can tell me EXACTLY how much it will be worth in 5-10 years. I am sure you will be able to predict everything that goes on in that country politically and economically. I mean predicting floods, earthquakes, wars, conflicts, military coups, fires, and huricanes is nothing for an Oracle like you. Is your last name Buffett by any chance?

    But at this point we are being childish arguing over semantics. Our opinions differ.

    Bad
    We're not arguing, or at least I'm not - and I haven't seen where our opinions differ at all, since I haven't seen you write anything which differs from what I've said.

    Real estate is a predictable investment inasmuch as you can control the price you pay, have a reasonable expectation of the rental income you earn, and can know going in the tax and accounting benefits you can obtain. Floods, hurricanes, and fires are all insurable - again giving you predictable risks. Risks from wars and coups are controllable if you avoid real estate in localities at risk from these things.

    No, you cannot predict what exact prices will be in ten years, but again you can forecast a net gain with reasonable assurance if you exercise due diligence by selecting properties in areas with population growth (i.e. avoid rural Kansas) effective governments (i.e. avoid Caracas) and positive social characteristics (i.e. avoid Baghdad) In addition, real estate tends to hold value in the face of inflation much better than any other investment.

    Two factors are paramount - control the price you pay and select the property and locality with discernment. Secondarily, you must have excellent management available to run the property for you.

  8. 02-26-07 15:57


  9. #80
    Senior Member


    Posts: 1543
    Quote Originally Posted by Badboy13
    Thank you Hunt, A very interesting and pretty accurate defense of real estate investing. But the whole part about predictability? I would go into it, but some real estate markets are anything but.

    Bad
    It's generally only unpredictable if you are playing the "flipper" game, trying to buy and sell in short periods with the hope of making a quick profit off of price appreciation. That's not investing, BB, that's called "speculation." If you want to try that, go to the casino and put your money down on red or black.

  10. #79
    Senior Member


    Posts: 1657
    Quote Originally Posted by Hunt99
    But really, BB, real estate investing is one of the safest forms of investing there is - so long as you know what you're doing going in. Crunching numbers in advance is essential. But once you identify a good opportunity and are able to act on it with favorable terms, RE is predictable, steady, and just the opposite of picking stocks, trading currencies, or running a business which sells widgets in a wide open marketplace. In real estate you can use leverage of 80 or 90 percent to give you exponentially higher returns. (Of course, this leverage is not realistically possible in Argentina. In real estate you will know almost precisely what your fixed and recurring costs are, as well as your income. Few businesses exist that have such predictability - and if you know your business, there's safety in such predictability.
    Thank you Hunt, A very interesting and pretty accurate defense of real estate investing. But the whole part about predictability? I would go into it, but some real estate markets are anything but.

    Bad

  11. #78
    Senior Member


    Posts: 1543
    Quote Originally Posted by Badboy13
    It seems obvious that this guy Saint is doing rather well in the BA real estate business,
    How is this obvious? Because he says so in the most egotistical terms possible? Badboy, I dearly want you to come invest with my firm. We had 250% returns for our clients last year. We turn work-a-day Joes into multi-millionaires overnight. Just give me your money and you will be wealthy just like all my other successful clients, such as Ted Turner, George Soros, and my special friend the Sultan of Brunei ("Sultie baby" to his close friends like me). Of course not everyone is capable of achieving these returns, and this kind of investing is inappropriate for 99% of you. But I know that all my clients never have to worry again about their financial security because my firm makes them rich.

    How's that for proof of my success as an investment advisor, Badboy? Convincing enough? Send me a check and you can be the next millionaire I create.

    Quote Originally Posted by Badboy13
    Real estate investment is risky no matter where you do it, some people are willing to take that risk.
    But really, BB, real estate investing is one of the safest forms of investing there is - so long as you know what you're doing going in. Crunching numbers in advance is essential. But once you identify a good opportunity and are able to act on it with favorable terms, RE is predictable, steady, and just the opposite of picking stocks, trading currencies, or running a business which sells widgets in a wide open marketplace. In real estate you can use leverage of 80 or 90 percent to give you exponentially higher returns. (Of course, this leverage is not realistically possible in Argentina.) In real estate you will know almost precisely what your fixed and recurring costs are, as well as your income. Few businesses exist that have such predictability - and if you know your business, there's safety in such predictability.

    Quote Originally Posted by Badboy13
    There is no point in bashing people for choosing to invest.
    Nobody has bashed anybody in this thread, except perhaps for 1036 and SAINT! rehashing their bitterness. And to be honest 1036 brought his woes upon himself by getting involved in a deal which was extremely stupid and not thought out in advance. He admitted as much. I admire such admissions of stupidity in this thread much more than I do the bloated claims of stupendous success which we all know are a bunch of horseshit. Amusing horseshit indeed, but horseshit nevertheless.

  12. #77
    Without going into the debate too much, I'll just post my experience of buying an apartment here in BA. The process itself was a little tricky, but if you speak Spanish fluently its not too bad. Consult with as many sources as you can, because there is a lot of conflicting information out there.

    I decided to buy a place because:

    1) I live here. I would have bought a place if I were living in the States, so to me its just the same thing, only now I live in Argentina. Its better to own than to rent.

    2) Apartments are affordable. Instead of taking out a mortgage, I was able to buy the apartment outright, without using all of my savings.

    3) The real estate market is still pretty good, so there is a potential for making a profit. There are associated risks, but thats the case anywhere you buy. Here they are a bit higher, but I think, exaggerated by some forum members.

    4) Its cheaper to renovate here than in the States. I was able to do some major work on my apartment and make it pretty impressive for only about U$3500.

    5) For a learning experience. I've never owned before, so it has been an educational process which I don't regret.

    For me it has been a really great experience. I haven't sold the apartment yet, and if I do, I do worry a bit about the legal issues that might arise, but I'm not planning on selling the apartment so its not a big deal for me. I'm hoping to keep the place for many years, even after I can't live in it anymore.

    I think trying to "flip" properties here is probably very difficult because there are a lot of people doing it, and being a foreigner puts you at a disadvantage. Plus, the market has cooled off a bit, so the potential gain is limited.

  13. #76
    Senior Member


    Posts: 1657
    It seems obvious that this guy Saint is doing rather well in the BA real estate business, either through consulting fees, rental income, property appreciation or all of the above. I don't think everyone who invests in BA can hope for the same results. The main point seems to be that you CAN make money in BA real estate and many people do. How much is a different subject, that all depends on many varying factors.

    Real estate investment is risky no matter where you do it, some people are willing to take that risk. There is no point in bashing people for choosing to invest.

    Bad

    Exon, You are correct about long term leases and the more I look into it the more I am liking that option. I do not agree with you on many other things, even if the BA real estate market hits a slump, I am in no hurry to sell, like I said everything that comes up must come down, the trick is to know when to get out, or at least make a profit on a few sales while holding on to other long term investments. Again I appreciate the free advice and the warning.

  14. #75

    Hello

    Quote Originally Posted by Hunt99
    Except for a couple of us here whose brains have been addled by syphillis, we're not stupid.
    Somebody called my name?

  15. #74
    Senior Member


    Posts: 1543

    Irony Alert!

    Quote Originally Posted by SAINT!
    I'm not claiming to be some big time operator.
    Perhaps the funniest thing I have seen on this site in a long time.

    I'm all for you making money, SAINT!. but please don't piss on my leg and try to tell me it's raining. Except for a couple of us here whose brains have been addled by syphillis, we're not stupid.

  16. #73
    Senior Member


    Posts: 1543
    Quote Originally Posted by Daddy Rulz
    There is some exemption for us little guys making less than 82K and not spending more than 30 days per year in Los EEUU no?
    I don't know the exact details, but last year's tax bill greatly diminished the favorable tax status formerly held by expatriates that you correctly remember. But no matter what the foreign income exclusion is, I believe you still have to file a return, even if your income falls below the limitation.

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