How to develop a property in a new country

How do you develop in a new country with no experience there?

I’m not entirely sure, but here’s what I would do

First, take a trip to the country.

In preparation for that trip, set up tours of various lots and homes for sale. Your objective with these tours is to learn as much as possible.

• What are homes selling for?

• What determines the price of the home (beach access, ocean view, amenities, access to airport or stores, etc.)?

• How quickly do homes sell?

• Who is buying these homes?

• How are they buying the homes?

• What did the homes sell for 5 years ago, 10 years ago, etc.?

During the same trip, arrange to meet with some builders. Present yourself as if you’re ready to build your dream house there. Ask as many questions as you can without revealing that your experience in real estate is quite high.

You have a more difficult objective here: you need to find out how much it costs to build homes. While doing this research, look for for-sale signs on land to get a feel for the cost.

After multiple trips, you’ll begin piecing together clues, and you can start to see the potential margins.

Next, you need to learn how long it will take to get a project approved.

This will be very tricky because:

1. It’s niche information.

2. Many people who attempt development are not successful.

To get this information, you will need to take multiple trips and start having conversations with people who are more sophisticated in real estate. Hopefully, you’ll choose a country where people are helpful, like Costa Rica.

Now you know:

1. What things sell for.

2. How much it costs to build.

3. How long it will take to get approval.

Now you’re ready for the fun part: finding a piece of land.

During this process, you will have become familiar with your target area, but now you need to zero in and find a deal.

How do you do this while living in another country?

You need to start talking to land brokers. Give them specifics on the size of the deal you’re looking for and what would be ideal.

That way, you will have everything lined up to make efficient trips.

After looking at 100 properties, it will be obvious which few are the best.

During this research, note all the red flags. Evaluate the best properties you pick and find reasons not to buy them. Once you have weeded out all the potential downsides, it’s time to buy the property.

At this point, make sure you have hired a reputable real estate attorney to help you navigate the purchase. Make sure you get a long enough due diligence period to iron out all of the potential concerns.

The next step is to hire a professional with experience in getting projects approved. This same professional will also help you create your master plan. You will need to decide on lot sizes and amenity placements.

During the approval process, start getting bids from contractors for your improvements. Since you don’t have an established network, it's important to get many bids to ensure you find the real cost.

If you have stalled all other projects, this process can feel slow at times. To fill your extra time, you can write a weekly newsletter and engage on Twitter.

This is where my journey has led me so far.