Multi Currency Real Estate Question


Here is a good question to my comment:  “Plus 75% of my portfolio is in real estate. all denominated in US dollars”.

A reader asked:  Gary—Does the fact that Ecuador real estate is also dollar based have anything to do with your current sales of your Ecuador real estate?

And what would be the prospects or recommendations for an individual to buy Ecuador real estate in the future if their portfolio is already “heavy” in
USA real estate?

Reply.

My taking profits on Ecuador real estate in Ecuador has nothing to do with the fact that Ecuador real estate is denominated in US dollars.

I view real estate as a currency and look beyond the currency. I expect real estate to  strengthen against any currency with inflation… so the denomination of the currency is not all that important.

There are times when a currency’s purchasing power drops so fast that real estate does not keep up. This is rare… and during the lag, there is a really good time to buy real estate.

An example was the melt down of Ecuador’s currency in 2000. The sucre fell from 12,000 sucre per US dollar to 25,000 in just a couple of weeks.  Real estate prices did not double anywhere as fast.

I was buying Ecuador real estate heavily then, which is one reason I am selling now as you will see below.

Normally real estate to me is view just another currency.

I am heavily weighted in real estate right now for three reasons.  First, I see real estate as a better bet than most currencies at this time.   The economic downturn of 2007 and 2008 lowered real estate prices… creating good value.  The stock market recovered… the real estate market has not.

An excerpt from the January 23 article in the Economist entitled  “Still in the cellar Small signs of recovery cannot shift the general gloom” confirms this fact when it says:

WHEN American house prices finally started rising in June last year, ending a three-year decline, homeowners and economists rejoiced. The steep plunge in values, about 33% nationally from peak to trough, caused widespread damage in the American economy and abroad. The stabilisation of prices turned out to be a precursor to broader economic recovery.

Since bottoming out between May and June, prices have ticked upwards every month, while sales have risen from their recession lows. And yet gloom persists. The pace of foreclosures has not abated, and there has been no improvement in employment in residential construction.

Worse still, the momentum now seems to be ebbing.  Mortgage applications for purchases fell sharply in November, to their lowest level since 1997. Confidence among home-builders declined in November for a second consecutive month. And figures released on January 20th showed that new housing construction, which recovered from the record lows of early 2009 to plateau late last year, fell by 4% between November and December. The fear is that prices will soon start to fall again, touching off another round of pain for homeowners, workers and banks.

Read the entire article at The Housing Market

Second,  Merri and I have a lot of experience in buying and fixing up real estate and use this experience and our imagination to enhance the value of what we buy.

I have written about our buying and selling on numerous occasions.  See more about this at Ecuador Real Estate & Imagination.

I buy and sell real estate in areas that enhance our lifestyle and where we see a bargain. We are continually churning our real estate portfolio.  Three years ago I sold seven condos I bought in Cotacachi while I was buying condos on the Ecuador beach.

That did not mean I did not like the condos in Cotacachi or did not like Cotacachi any more.  In fact the next year and I bought an office building in Cotacachi.

We do not keep real estate that we are not using for long.  We buy special properties with a problem… fix the problem… keep the property long enough to have a capital gain instead of income and take profit.

In 2005, while I was buying real estate in Ecuador I was also buying condos in Naples Florida.  We lived in the condos part time and sold them in early 2007 (luckily at the top of the market)…  and as the Florida market tumbled we began waiting and watching for more Florida bargains.

This last year I have had two special reasons (our grandson and the Florida RE crash) to focus on real estate in Florida… but at the same time we are putting extensive capital into building our Ecuadorian organization.  We doubled the number of tours we conducted in 2009 and this year we had doubled them again.

Two years ago we did 12 Ecuador tours. This year over 50.

We are investing in upgrades to our site’s focus on Ecuador as well.

According to Alexa… the investment is paying off.  Yesterday our site was ranked in the top 500 in Ecuador and 16,000 in the US.   The site has recently been among the top 50,000 ranked sites in the world.

Ecuador-opportunity

I do not have up to date data, but in 2007, it was estimated that there were about 109 million distinct websites.  This was an underestimate  so “there are more than 108 million websites” was the most accurate statement that could be made.

About half the websites were in the USA.

Estimates of countries with the largest number of web sites:

1. United States: 55 million
2. Germany: 15 million
3. United Kingdom: 6 million
4. Canada: 3 million
5. France: 2.5 million

So our investments in Ecuador are substantial and are doing well.  They just are not as much in real estate at this time.

The third reason I am heavily weighted in real estate is that Merri and I use the process of buying and selling real estate to pay for and enhance our lifestyle.

We are spending this winter in Florida and enjoying our most recent investment.

Last weekend, I enhanced our lives with extra construction of …

Ecuador-opportunity

a most important tree house in…

Ecuador-opportunity

this tree.  I had cheap labor to help… our grandson Garren and of course our hound Ma.

Ecuador-opportunity

We are leveraging the addition (with rope).  This is a vital addition, not… because of the added money it will bring, but as the Visa ad says ‘its priceless”… the time spent with our grandson is beyond the bottom line!

Now Merri is researching Oregon coastal real estate… looking for bargains… not because the Oregon Coast is special… but our next two grandchildren are now three and one year old.   Thoughts of spending time with them is enough to draw our attention there.

Diversifying currencies is important and being concerned about the fate of the US dollar vital… but there is more than to a bottom line than percentage points and statistics.

Real estate, if you like investing in it, can be one of your hard currencies along with your own business and gold, as it is a commodity always needed that will fight inflation and can add other forms of richness to your life as well.

Gary

Join Merri and me plus nine other speakers and contacts this February  at a seminar that shares ways to invest, do business and live in Ecuador or globally February 11-14  at Quantum Wealth -International Investing & Business Made EZ, Mt. Dora, Fl.

You can also come on with us to Ecuador.

February 15-16 Travel to Quito and tour Quito

February 17     Travel Quito to Manta

February 18-19  Manta & Mid Coast Real Estate Tour

February 20 Travel Manta to Cotacachi

February 21-22 North Andes, Imbabura & Cotacachi Real Estate Tour

February 23-24  Quito & Mindo Real Estate Tour

February 25 Travel Quito Cuenca

February 26-27  Cuenca Real Estate Tour

Or join us in March 2010

March 11-14     Super Thinking + Spanish Course, Mt. Dora, Fl.

March 15    Travel to Quito

March 16 Travel Quito Cotacachi

March 17-18  North Andes, Imbabura & Cotacachi Real Estate Tour

March 19-20    Cotacachi Shamanic Tour

March 21  Travel Cotacachi to Manta

March 22-23   Manta & Mid Coast Real Estate Tour

March 24 Travel Manta to Cuenca

March 25-26 Cuenca Real Estate Tour

March 27  Travel Cuenca to Salinas

Mar. 28-29   Salinas & South Coast Real Estate Tour

The Ecuador airfare war makes it cheaper to get to Ecuador than ever before… and there is still time to enjoy great Ecuador tour savings.

You enjoy discounts by attending multiple seminars and tours. Here are our multi tour adventure discounts.

Two Pack… 2 seminar courses & tours $998 Couple  $1,349 Save $149 on couple

Three Pack… 3 seminar courses & tours   $1399 Couple  $1,899 Save $98 single or $348 on a couple or more

Four Pack… 4 seminar courses & tours   $1,699 Couple $2,299 Save $98 single or $697 on a couple or more

Five Pack… 5 seminar courses & tours  $1,999 Couple $2,699 Save $496 single or $1,046 on a couple or more

Six Pack… 6 seminars courses & tours  $2,199 Couple $3,099 Save $795 single or $1,395 on a couple or more

Even Better.  Greater Savings. Our 2010 International Club membership allows you and a guest to attend as many of the 51 courses and tours we’ll sponsor and conduct in 2010  (fees would be $40,947 for all these courses individually) is only $3,500.

If you join the International Club, the entrance fee for 2010 is $3,500.  Your attendance fees at all courses will be waived. You and a guest of you choice can attend courses worth $40,947.You can calculate the savings as our schedule of all 2010 courses here.
International Club 2010 Membership $3,500 Enroll here

International Club Three Monthly Payments of $1,190

Our Spring 2010 schedule starts:

Apr. 12-15   Ecuador Export Tour ($499 or couple $749)
Apr. 17-18   Imbabura Real Estate Tour ($499 or couple $749)
Apr. 20-21  Coastal Mid Coast Real Estate Tour ($499 or couple $749)
Apr. 23-24  Quito & Mindo Real Estate Tour ($499 or couple $749)

Apr. 26-27  Cuenca Real Estate Tour ($499 or couple $749)

The multi tour discounts remain effective for the April tours.


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