Flipping America 582, International Investing with Ronan McMahon

This show is called Flipping America, but it’s a big wide world out there and there are investment opportunities all over it. We are going to explore that a bit today.

Ronan McMahon is the editor of Real Estate Trend Alert, Your Overseas Dream Home, and a contributing editor to International Living. Ronan’s newsletter, “Your Overseas Dream Home” is delivered to readers’ inboxes daily. No matter what level of real estate investor you are, there’s plenty of great info for you. In it, you’ll read about every promising international real estate investing idea Ronan and his team comes across.

He also brings you up to speed on his favorite markets for making “double your money” gains through either capital gains, rental income, or both. He also shares his key strategies for identifying profit opportunities in some of the most beautiful locations worldwide—by Caribbean, Pacific, and Atlantic beaches, in glamorous European cities, in quaint little mountain towns, or anywhere else that might interest you.

I’m happy to tell you that Ronan is going to join us shortly. We will talk about his investment model and how you can get involved in investing all around the world. Dianna and I read his newsletter regularly.

How to contact us

Please SUBSCRIBE on whatever platform you are hearing this. And please share with one friend.
Facebook.com/flippingamericamedia
Twitter and Instagram @FlippingAmerica
YouTube.com/FlippingAmerica
Call our National Comment Line: 877-55-ROGER (877-557-6437) ext 1. Leave your message or your question.
Text WIT (upper or lower case) to 205-858-FLIP 3547, enter your email and you will be subscribed to the Weekly WIT (Whatever It Takes). It has the week’s real estate and Flipping America news, an investing tip, a joke, and a blessing. It’s usually about a 7 minute read, with some optional links.

Quote of the Day

“Time is more valuable than money. You can get more money, but you cannot get more time.”

John Rohn

Expected Air Date: Fri 1/20/23

Guest: Ronan McMahan

Transcript

[0:00] This show is called Flipping America, but it’s a big wide world out there and there are investment opportunities all over it.

And today, we’re gonna go exploring.

[0:11] Music.

[0:28] The show that teaches you how to make money in real estate Wherever you are, whatever your situation, there is an opportunity for you. And now, here’s that Flipping America guy, Roger Blankenship.

Thank you, Kathy Curtis, and hello America, and hello world.

[0:45] Ronan McMahon, and I really, I’m sorry, Ronan, I can’t get that pronunciation of your name. No disrespect intended. I know you know that.

Ronan is the editor of Real Estate Trend Alert, also an e-newsletter called Your Overseas Dream Home, and is a contributing editor to International Living Magazine.

The Dream Home newsletter is delivered to readers’ inboxes daily. We’re going to tell you during the interview how you can reach out to Ronan and get on his list.

[1:17] No matter what level of real estate investor you are, there’s plenty of great information for you.

In it, you’ll read about every promising international real estate investing idea Ronan and his team comes across. He also brings you up to speed on his favorite markets for making double your money gains, either through capital gains, rental income, or a combination.

He also shares his key strategies for identifying profit opportunities in some of the most beautiful locations in the world, by the Caribbean, Pacific, and Atlantic beaches, and glamorous European cities, and quaint little mountain towns, or perhaps anywhere else that might interest you.

I’m happy to tell you that Ronan is joining us in just a moment. We’re gonna talk about his investment model and how you can get involved in investing all around the world.

Diana and I are big fans and it’s great to have Ronan here today. We’re at FlippingAmerica.net and you can ask any question about real estate by sending it to questions at realest, questions at FlippingAmerica.net.

We promise you an answer and we might use your question on the show.

Ronan’s got a free book he’s gonna offer you during the show, go to bigbookfree.com forward slash Roger to get it.

[2:25] No time for the news today. We’ll get to the news segment in the next show, I hope. But because the interview with Ronan went on a little bit longer, it’s so fascinating.

We’re gonna turn it over to him now.

[2:38] Ronan McMahon, welcome to Flipping America.

[2:42] Lovely to be here, Roger. Thank you. I’ve already told everybody how excited I am to get you here. And yeah, I have been excited about this for a while because,

we’re moving beyond the shores of the United States today and we’re going to talk a little bit about international investing.

So tell everybody a little bit about your background, where you’re from and what you’re up to.

Absolutely, Roger. So I’m Canadian-born, but pretty much have lived all my life in in Ireland. My parents are Irish and they they moved back from Canada to Ireland when I when I was just four. But,

I went through the Irish school and university system, finance graduate, left university and like many kind of young Irish people the first thing I did once I got my first paycheck was get into real estate, get into my,

my hometown real estate.

You know, us Irish folks were very much attached to the dirt, the piece of land, rental income. So much of our wealth is tied up in real estate.

[3:57] So I got very lucky, Roger, with my timing, leaving university and kind of getting into the world of corporate jobs in the late 90s.

Ireland and.

[4:09] Real estate market was just on this absolute tear prices were rising up and up and up and it was an amazing moment to get in at the ground floor of of of ireland’s celtic tiger in terms of real estate investing. But day job, I was in the kind of corporate-y business world.

I found it tiring, ungratifying.

I was living in Dublin. That’s about three hours from my hometown of Cork, which in Ireland’s size is the other end of the world.

So I started kind of looking around for other opportunities. And in 2003, late 2003, I met up with the people at International Living, a publication and business that you know well.

And they’re headquartered in Waterford in the southeast of Ireland. I went to meet them in December.

They said, we’re looking for someone to get in a plane and travel the world in search of international real estate opportunities.

I said, I think I might be your guy. and a couple of weeks later I was on a plane to Panama and Nicaragua and pretty much haven’t looked back, you know, close on 20 years later.

[5:30] Okay, so tell everyone where you’re sitting right now as we have this conversation. I’m sitting in Cabo San Lucas in a community called Cavira,

which is on the Pacific side of Cabo San Lucas,

and I’m just looking out at wild Pacific waves crashing on a flat tan beach and the white of the water is spurting up in the air. It’s 76 degrees and it’s absolutely heavenly.

I wouldn’t be in Ireland today.

What is the weather in Cork today?

[6:10] Oh my god 42 degrees and raining exactly yeah you can say that with near confidence irrespective of the season maybe in the summer at 10 degrees on but it’s fundamentally the same although roger summer summer in ireland is heavenly with the light until 10 thirty eleven o’clock at night so i still want to be in ireland in those summer months because that’s a special time but that My big thing is no heating, no cooling, you know, always be somewhere where I’m wearing a short sleeve shirt like this, where I can leave the doors open, and the kind of the wind coming through at night, and no air con, no, no heating, no cooling temperatures that are comfortable enough to exercise outdoors, but not too hot.

So, and I’ve been able to get it with the circle I organize my life around.

Okay. Well, we have some things to discuss about Ireland because my wife is Irish on both her mother and her father’s side, but she’s never been there. And part of my goal this summer,

perhaps, is to take her to Ireland and let her see that land. But we’ll talk about that offline.

So you’re doing this traveling and you’re scouting out locations for international living. And of Of course, I’ve been reading you, my wife and I both have been reading you for a while.

[7:36] In her case, I think a couple of years. But she finally got me started reading all these international living magazines about a year ago. And even the latest magazine, she was sitting out

on the balcony, I think, Sunday morning, reading an article by you. She said I needed to read. I don’t remember what it was about now. But anyway, we’ve been following you for a while.

What is your thinking or your model for what constitutes a good investment? Well, I guess I should back up a little bit.

How did you?

[8:10] You

Screw up your courage to buy that first property in a different country. Yeah, so I did so that the first property I bought internationally was in Panama City in kind of late 2004 2005.

I had the confidence of having made a couple of trips, I had boots on the ground, I knew the developer was strong, but most importantly I felt I could just see in Panama the same trends that I’d lived through in Ireland the previous decade.

There was this transformation where Panama was opening up and attracting all these multinationals from right across the globe.

It was becoming a true kind of regional economic and corporate hub.

And you know, that’s exactly what I saw play out in Ireland with the tech and pharma industries coming in, driving a real estate boom.

[9:15] I felt that I’d seen it all before and I was getting in at the ground floor and the ground floor meant I could buy an amazing condo with views of the Bay of Panama, you know, high,

end building for under $150,000.

So what felt nervous to me was more being like stuck so heavily in Irish real estate because Irish real estate had just got so expensive for me.

[9:47] It had just got so frothy.

And I was more nervous about my holdings in Ireland than taking the step into a market like Panama, where I knew it was just so fundamentally underpinned,

by a really, really strong short-term rental market,

and also by a long-term rental market.

So yields were robust.

It really felt quite comfortable having made those couple of visits and vetted. Okay.

[10:19] Well, let’s talk about your business model because it looks to me that you basically follow the buy in the path of progress model and wait for rapid appreciation to bring that return that you’re

looking for. Do I have that right? Yeah, yeah, exactly. So I, along with my little team of scouts, we find places that, you know, where something is happening or is set to happen that’s

going to kind of fundamentally drive demand. So, you know, historically that was often things like new airports, new flight access. In more recent years, you know, since the kind of the COVID

situation, we’ve seen this dramatic rise of working from home and that’s fundamentally transformed the demand and rental equation in places like Cabo San Lucas here, in places like Lagos in,

Portugal, right across these kind of highly desirable places that are extremely accessible,

that are just sucking in these remote workers from right across the globe.

[11:32] Okay. So, you know, what I do is I buy something that’s got some factor of distress in it. Maybe the house needs work or maybe the people are behind on their payments or maybe both, usually both. And so we’re going to be putting work into it. But you’re buying brand new properties and.

[11:52] Then just waiting for yields that come from rapid price appreciation. So what constitutes a good looking deal in terms of the returns.

[12:03] Yeah, exactly. So I expect kind of 50% capital appreciation. Essentially, my criteria are double your money, double your cash invested within five years. Typically, that comes from,

capital appreciation during an initial construction period because what I do is I identify the,

the best in class developers in a place and then we make a deal with the developer that they pre-release a percentage of their inventory to our group at special members only pricing and terms.

So this is a huge perk for the developer because it just fundamentally changes the numbers in their business if they have say a 120 unit project and we take the first 60.

[13:03] Then they can take the second sixty and they’re under much less pressure in terms of absorption rates they can increase prices much more more aggressively it takes the whole it. Significantly do you risk the project so the quit pro quo is that in return for us being first and we got a significant significant discount so.

There’s these different layers. First of all, we’re buying in a place that’s on the up.

[13:34] We’ve been very active here in Cabo San Lucas over the last six or seven years, Playa del Carmen, Lagos in Portugal. So we’ve been very successful at identifying places that are at that early to

mid-stage of a growth trajectory. Then we get in on the best in class projects because,

of our group buying power is so valuable to developers. Then we get the layers of the benefits, the discounts, then the project goes retail and then we see pretty strong capital appreciation from there.

So, you know, to give you an example, we’re just in the process of offering a new condo project here in Cabo San Lucas, but our last launch, Rita members only closed on their

condos three months ago and we were closing on condos, for example, for $270,000.

Those condos today are on the retail market for $390,000 and we just closed three months ago.

The kind of rate of appreciation we can get in these types of markets.

[14:49] Yeah. I was just, you know, I immediately did the math when you said double your money in five years. That’s basically a 20% average annual return on your capital.

[14:59] Yeah.

[15:00] Now, do you leverage these properties or you pay cash?

[15:05] So we pay in, there’s a payment plan. So we pay 50% during the construction period. and then on delivery there’s developer finance. So it’s a nice, easy, manageable formula. Now.

[15:23] Regular buyer for regular buyers, finance or mortgages is almost non-existent in places like Mexico and Panama and Costa Rica, but part of the deal that we make with developers is that they’ll offer our RETA members developer finance as part of the deal.

So that’s nice, you know, a lot of RETA members like to kind of accelerate the payments, but it’s a flexible plan. So you know, you can go the whole five-year payment plan or you can pre-pay,

it’s very flexible.

[15:59] OK. Oh, yeah. I missed that five-year payment plan. Yes, yeah. 50% down and five-year repayment plan. Sorry, Roger. 50% during construction.

So we’re getting in pre-construction. Typically, it’ll be a two to three-year build period.

And then on delivery, the remaining 50%, we can finance over five years.

OK. We’ve got to take a quick break. And we’ll be right back with more questions. He is Ronan, I am Roger. We’ll see you in a minute.

[“The Perfect Valentine’s Day”] Are you looking for the perfect Valentine’s gift for that certain someone?

Blackbeachgifts.com has a great selection of jewelry, clothing, and accessories with sentiment that ranges from sweet to romantic to downright snarky.

One of my favorites is the skeleton of a girl lying there and she’s saying, I’m just waiting for the perfect man to come along.

[16:56] I also like the coffee mug that reads, I’m sorry for what I said before I had coffee. There are some others that you’ll just have to read at site because this is a family-oriented show.

Blackbeachgifts.com. Use the promo code Roger at checkout and save 10% on your first order.

Blackbeachgifts.com.

Okay, we’re back and we’re talking international real estate investing today.

And this is so much fun.

We’re gonna run out of time before I can possibly ask you all of the questions that are in my mind. but I’m loving this and it’s inspiring and it’s fun to think about.

[17:34] A little nerve wracking for someone like me, but you know, I am, we’re buying in 28 of the United States out of the 50.

And so I have bought properties that I never went and looked at first.

[17:48] But how do you find these operators? Like, you know, you’re traveling all over the world.

How do you find and vet an operator, say in Lagos?

[17:57] Yeah, I mean, very good question. And Roger, I think the critical thing to understand is that, you know, I’ve been doing this now for close on 20 years.

Over that time, I’ve built up a team, each of which their own kind of regional and discipline experience. So our world is our world in the

markets where we’re active is is is pretty small. So you know, if you were to take the the markets of, you know, Mexico’s resort towns, Costa Rica and Panama, it’s a very small connected

circle of the best in class developers.

So what we did is we initially built our kind of contacts and connections in Panama and Mexico’s Riviera Maya and from there our footprint has expanded in different places.

But it’s nigh on impossible to just drop out of space into a market and to really understand what’s going on because a big problem with a lot of these markets is once they get hot,

you’ve got a lot of outside developers coming in, a lot of Johnny come late, a lot of Spanish.

[19:20] Groups, American groups, Canadian groups, and these people come late to the table and they often make a lot of mistakes.

Very interestingly, there’s a number of kind of consistencies with the developers and the that we work with. Typically they’re multi-generational. We deal with either the, typically it’s the

second generation. The first generation got into hotels and land banking. They’re kind of old school characters who made very, very successful businesses. And now they’ve got a next generation,

who understands the internet, understands the value of our group buying power.

They’re dynamic, but they still have the land bank and the old family connections and resources to lean on. Anyone we work with, I want to make sure they’ve been through multiple crises.

In a place like Mexico, believe me, you just go back a couple of decades and there are multiple crises because they’ve got their own domestic crisis, we’ve had the international financial crisis, we’ve had COVID, we’ve had swine flu, we’ve had the tequila crisis.

[20:45] These are the moments when you know companies like this really show their their metal you know do they follow true and do they deliver. I know it’s a word of mouth in these cultures is much is so critically important so you know i’ll ask.

I’ll ask their competitors and people, you know, a lot of these groups, they’ll be fiercely competitive but they respect good reputation and good reputation supersedes everything in these countries.

So I guess long story short, a lot of work over many, many years has got us to this point of being able to identify.

You’ve got a book you want to give people and I’ve just put it up on screen. It’s www.bigbookfree.com forward slash Roger, for those of you that are not watching this, but you’re listening on the radio or the podcast.

Bigbookfree.com slash Roger. What’s in the book? Tell us about it.

[21:49] Roger, everything I’ve learned over the last two decades of doing this. So this is a book that I promised my publisher for the last three or four years I do.

And what it does is it steps back, brings the reader right back to basics of understanding what these big trends that we need to look for are,

how to identify them, how to get out ahead of them, and most importantly, how to profit from them.

With a lot of color and a lot of kind of interesting stories and anecdotes from my travels thrown in.

But I think for anyone interested in getting started in getting started in the world of international real estate.

I think this is for you because it really, it applies core real estate principles.

[23:00] But it marries them to the world of the kind of the international considerations.

Okay. So, yeah, well, and it’s free, I guess. It’s bigbookfree.com.

A special deal for your readers, just pay postage and packaging and we’ll send you a book.

Alright, yeah, that’s great, that’s nice. Now we read you every month in International Living and I guess the magazine is not going to be printed anymore, it’s all online now and so we’re kind of switching over to that.

But…

[23:43] Yeah. If somebody wants to get started, can we talk a little bit about your group? Yeah, exactly. With the free book, with that link that you just put up there, anyone who

buys the book will also include a 30-day trial subscription to my Real Estate Trend Alert,

publication. And Real Estate Trend Alert, I founded it in 2008. I founded it at the peak moment of the financial crisis when everyone in the developed world was absolutely losing their mind. But I was on the beach in Brazil just finding these incredible opportunities because the economy there was still on a tear.

And Roger, this is the huge take away lesson from my years at this is, you know, no matter how things look where you are, there’s always opportunity somewhere.

So 2008, I founded Real Estate Trend Alert. Real Estate Trend Alert is where all the actionable opportunities for my group are.

That’s where the deals are. But that’s also where the kind of the macro analysis of the various markets that I cover is.

So, real estate trend alert.

[25:08] Yep. Real estate trend alert. And Diana and I are members and have been for a while.

[25:14] And really, that’s how we’ve gotten to know you at a distance over a while. Now, we just recently went to the International Living Summit here in Atlanta.

And you spoke on recording there, and I’m pretty sure you were talking about Croatia.

That was unpredictable.

I mean, you know, I understand Portugal, the South of France, and Italy, and Greece, and Panama, and Costa Rica, all those things that we hear about.

[25:41] But Croatia? And then you even talked a little bit more about other places. And before we started recording, You were talking about Montenegro.

[25:50] Yeah, and Albania. And I think the meat of my presentation there, Roger, was more Montenegro than Croatia, because I traveled extensively in Croatia in… Oh, did you say Croatia was done and it’s time to go to Montenegro now?

Exactly. Okay, right. I remember.

[26:15] Yeah, yeah, so the you know, I traveled extensively in in Croatian the early early mid 2000s, well, particularly the,

early 2000s, you know, just as the kind of the Civil War was was ending our quasi ending. And, you know, it is just an.

[26:35] Absolutely amazingly beautiful coastline with beautiful crystal clear Adriatic waters, amazing history. And that was a moment when there was just incredible real,

estate opportunities to be had. Because while Croatia might seem very distant and very foreign to you, it’s only a seven hour drive from Munich, for example, an industrial and commercial and,

affluent heartland. So Croatia was still at the very, very heart of Europe and a Europe with a,

scarcity of beautiful coastline. So development raced through Costa Rica, values just went through the absolute roof and now Croatia is just the same as everywhere else in the Adriatic and the,

Med. It’s crowded, it’s expensive, you don’t want to be there in summer. I mean these historic cities, Roger that was like literally, I mean, when I was there, there was just a few youth hostels and,

budget hotels. Now it’s like Venice. And by that, I mean, it’s just swarms of crowds doing tours.

Wow.

You know, it’s beautiful coastline. But, you know, if you want to if you want that sense of adventure and getting ahead of things that’s completely done.

[27:58] But from Dubrovnik, you just drive like 25 minutes from Dubrovnik and you cross the border into Montenegro and it’s like a time machine. You cross that border and prices are, you know,

one third or one quarter of what you’d pay in Croatia. And it is just this absolutely beautiful,

pristine little country, charming old towns. They’ve got this amazing fjord that It looks like it should be in Norway or somewhere, but it’s in Montenegro.

Just beautiful coastline, tiny little country, beautiful people and prices, a fraction of what they are in Croatia.

[28:44] Okay. Well, we have so much more I want to talk to you about, but we are out of time for today’s show. Ronan, thank you so much for joining us. And I want to get you back here as soon as we can. All right.

[28:54] Thanks, Roger, for having me. We’re going to talk Albania next. Okay. Yeah. All right. We’ll do it. See you now.

And as we get out of here today, I want to remind you of a couple of things. First of all, go to www.bigbookfree.com slash Roger and order your copy of Ronan’s book. It’s free. You just got to pay

for the shipping and that’s not much, less than $6. And one other thing, Jim Rohn says, time is is more valuable than money.

You can get more money, but you cannot get more time. See ya.