Real Estate Investor Magazine South Africa February 2014 | Page 46

STRATEGIES

BY NEALE PETERSEN

Diary Of An SA Investor
In The USA
How to invest offshore – step-by-step

M

any investors are taking money
offshore, especially given the poor
state of the rand, which is still
hovering around R10 to the US$1. A number
of South African property players have invested
in offshore real estate to diversify, but also for
currency protection.
In the US, there are signs of a sound recovery
and prices are starting to rise rapidly. As a result,
competition for US properties is heating up with
private investors facing deep-pocketed hedge
funds both inside and outside the US.
My first foray into the US property market was an
exploratory trip in April 2012, which included San
Diego, Phoenix, Las Vegas, Atlanta, Memphis,
Orlando and New York. In November 2013, I
accompanied IPS and Wealth Migrate on their
16-day Buyers’ Tour during which we investigated
three new markets, namely North Dakota,
Oklahoma and Chicago. We also found that the
markets in Orlando, Memphis, New York and
Atlanta had almost doubled since our 2012 visit,
although many cities are still below replacement
value, while Phoenix and Vegas are overshot.
This time around I joined a band of South
African investors looking to park their cash in
US real estate. IPS supplied each investor with
an investor kit, an investor strategy sheet, loads
of info on each city and the listed investment
properties for sale. Armed with this, we tackled
a packed itinerary.

Day 9: Property day in Atlanta
Day 10: Depart Atlanta; Arrive Memphis
Day 11: Property day in Memphis
Day 12: Depart Memphis; Arrive Oklahoma
Day 13: Depart Oklahoma; Arrive Chicago
Day 14: Property viewing Chicago; Depart
Chicago; Arrive Orlando, Florida
Day 15: Depart Orlando, Florida for Atlanta to
Johannesburg
Not only have prices almost doubled in these
cities since April 2012, but they are still giving
investors great returns on capital and rental yields.
What makes the US a winner for investors is the
fact that many Americans cannot get mortgages,
as most have bad credit records and need seven
years to recover. This is great news for offshore
investors, as it drives the rental market, which
has grown dramatically. The increased investor
activity is putting upward pressure on prices.
Although pricing has slowed in some cities, there
is still massive opportunity.
Every good investor knows that simply
identifying a city is not enough, as the US has 50
states and more than 320 cities that need to be
considered and, within those cities, the suburbs
must be investigated.
Investors on the 16-day Buyer’s Tour completed
an investment strategy sheet and questionnaire,
which assisted them in focusing on how to buy the
right offshore investment property.

The property investor’s diary
Day 1: Depart Johannesburg
Day 2: Arrive Atlanta, Georgia; Depart for
Minneapolis, Minnesota; Arrive Williston,
North Dakota
Day 3: View properties in Williston
Day 4: Property day in Williston
Day 5: Depart Williston; Depart Minneapolis;
Arrive New York City; Property day in New York
Day 6: Depart New York; Arrive Atlanta
Day 7: Property day in Atlanta
Day 8: Property day in Atlanta

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February 2014 SA Real Estate Investor

Investment strategy questionnaire
1. Why are you looking to invest?
2. What could stop you from investing?
3. How would you define a successful
investment?
4. What type of investor are you?
5. Which areas would you like to invest in?
6. When would you li