Beginning of excerpt.
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?
My taking profits on Ecuador real estate 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 just a view of another currency.
I am heavily weighted in real estate in Ecuador, Florida, Georgia and North Carolina 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 and has not been such a good value… though it may be correcting now. The real estate market has not recovered to such an extent.
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. We truly enjoy that process and often don’t enjoy holding, using and/or renting.
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 other 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 and converted that to condos.
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 a 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.
Third, this last year we have had special reasons (our grandson and the Florida RE crash being two of them) to focus on real estate in Florida… but we remain well diversified at the same time. We are especially putting extensive capital into building our Ecuadorian publishing and tour organization. We doubled the number of tours we conducted in 2009 and this year we have doubled them again.
Two years ago we did 12 Ecuador tours. This year we’ll do nearly 50.
Now Merri is researching Oregon coastal real estate… looking for bargains… not because the Oregon Coast is better than Florida, North Carolina or Ecuador… but because our next two grandchildren are three and one years old. Thoughts of spending time with them in a few years is enough to draw our attention there now. Also, my sister and her husband have craved a property on the Oregon coast and it looks as if we will have to find it for them.
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.
End of Multi Currency excerpt.
You can read this entire article with a multi currency subscription.
Sadly at this time when American investors need more multi currency investments and a better global view, overseas banks are increasingly restricted from helping US investors. This increase in regulations has created so many more regulations on banks that numbers of overseas banks who have the ability to help honest Americans have stopped accepting all US investors.
Yet at this crucial time when the US dollar has great fundamental weakness, US banks have little experience in helping any of us invest in other currencies.
This means there will be an increase in the number of Americans who develop multi currency portfolios and global businesses.
Jyske Bank has stayed with us Yanks and formed Jyske Global Asset Management. They spent millions creating a system that can give US investors a full currency and global investment service in the US, Ecuador or wherever they live. This is why I will be speaking at Jyske Global Asset Managers forex seminar in Laguna Beach this April . See details here.
Real estate, if you like investing in it, can be one of your hard currencies along with your own business and gold. Real estate is a commodity always needed that will fight inflation and can add other forms of richness to our lives as well.
Join Merri and me or our Ecuador Living staff 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.
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.
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.