imagesWere you getting a little bored with the turnkey rental properties that are available? Feeling a little rowdy this week? Just so you know, buying in Nicaragua was my first real estate investment ever. Buying in Nicaragua as a total noob! That’s right, you heard me. So don’t underestimate it.

All I can say is: positive cash flow + insane vacation home = rockstar.

Location: Nicaragua.

Purchase price: $349,000 (soon to be $389,900 when the roof is completed)

Condo info: 2 bedroom, 2 bathroom, 1,466 square feet, direct infinity pool and beach/ocean view

Property info: 5-story condo hotel building, phase 1, international hotel partner, world-class surfing, golf, paradise

*All purchases are 100% deeded freehold ownership, so none of this ‘the government will come in and swipe my property’. Doesn’t work like that.

Estimated Cash Flow

Before you look at this cash flow analysis, I want to make sure you understand something about a purchase like this. If any of you reading are straight-up real estate investors, who only care about the bottom line, you might find the cash flow below a little disappointing. Here’s what you, and everyone else needs to understand. There is a difference in “lifestyle investing” and “real estate investing”. Well, except that lifestyle investing is a form of real estate investing. Lifestyle investing though will always have lower returns than a straight-up real estate investment. Why? Because it’s fancier and has more use to you personally. Think about this condo. You can vacation in it yourself, in paradise in case you didn’t realize Nicaraguan beaches are truly paradise, you can retire to it, and the growth/appreciation potential is huge. You don’t get those things with the boring rental property investments. But you do get higher returns with those. So make sure you understand the difference in those two forms of investing because they truly are different.

Now that you understand this is more of a “lifestyle investment”, you should actually be really impressed with these returns! They are high for lifestyle investing! Think of it this way. You are a surfer. There happens to be the #68 surf break in the WORLD at this development. It’s a hidden gem. So you are a surfer, want to go a few times a year. Let’s say you’ve been going to Costa Rica or Cabo up until now to surf. How much do you spend to do that? Well here, you are surfing a higher-ranked wave and when you aren’t there riding it, you are renting out your condo (which happens to be branded by an international hotel partner, so everyone wants to rent it) and making the returns below. Uhh, hello no-brainer?

Now you can look at the cash flow analysis…nicaragua_cash_flow

One other note. Not this condo in particular, but one of the same style is available for fractional ownership. NO, it is not a timeshare. It is actual partial ownership (1/12th to be exact) of a condo so you get 28 days usage each year. You can use it yourself or rent it out for cash flow. These fractional prices start at $49,900. Easy money! For real ownership.

 

Never thought about overseas investing before? Curious about it?

Overseas Real Estate Investing… For Real?

Comments
  • Gary
    Reply

    You are awesome. Love this site!

    • Ali
      Reply

      Thanks Gary!

  • Sharon Tzib
    Reply

    Ali, do places like this in Nicaragua offer financing, or must it be an all cash purchase?

    • Ali
      Reply

      Hi Sharon!

      Financing is tough there, but doable. You can get financing through the banks there but the interest rates won’t be your favorite. Harder for long-term holds. If you buy a home site and want to build, building loans are easier and quicker. Really just depends on what you are interested in buying as to what the options would be.

      When I bought down there, I couldn’t get a US mortgage but I could take out US loans out (car loans, etc) for the money to use down there. That’s another option.

      Ali

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