Wow... the Sun Sentinel has finally caught wind of the Europeans that are buying en masse in South and Central Florida these days!
The article speaks of why Western and Northern Europeans are growing fonder of the area for both the lifestyle and climate.
They printed this map showing that most of the European Buyers are from the UK.
There are also many from Denmark and Holland.
Right now, Mortgages for Foreign Nationals are at an all time high. It is easier now than it has been in years to get financing at attractive rates.
That was actually a point missed by the journalists. Loan Programs are available from far more banks and lenders. Also there are new options in foreign exchange that are making the conversion of funds that much quicker and easier.
Some of the other factors that are influencing the current investment boom is the strong Euro. Based on the Dollar, the Euro is dominant... and the British Sterling is even stronger.
So what does this mean to Europeans? It means they're making much more on their investments than US citizens.
How? Foreign Exchange Rate Hedging...
The Dollar has long been an international standard in currency. Even people with stronger currency have a tendency to sock some away in US currency. It was actually causing a panic a few years ago when the US believed that so many bills were out of circulation and sitting in foreign floorboards and safes that we would eventually run out ourselves.
- The Dollar has also been volatile - as volatile as our politics and financial markets.
- As the dollar has dipped - much like a stock, foreign investors have bought the dollar.
- As the dollar has recovered - the investors would sell the dollar back and take the profits.
- So... while the dollar is LOW, investors are buying up Dollars with their Euros.
Then they buy a property here in the US.
Over time, the property itself increases in value. The dollar also becomes stronger over time as we recover economically.
Then when the foreign investor sells the property, they make a profit in appreciation. They then take the Dollars and exchange them for Euros and make a profit on the appreciated Dollar!
So if they buy the US Dollar and the House. 
- They put $100,000 down on a $500,000 house (20%).
- The House appreciates 15% over 5 years to $575,000.
- and the Dollar gains 5%, to $105,000 (equity CAN appreciate in this instance).
- The combined profit is $80,000 on $100,000 invested or 80% in 5 years!
- subtract out the debt service and depreciation to get a true IRR
How's that for some fancy European Math!
So... who wants to start marketing overseas with me??
David A. Podgursky, MBA
The Mortgage Go To Guy
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida
I'm all over it! The problem is that they've been watching prices drop so I don't believe they're investing as much. But as soon as the feeling is that prices have hit bottom (some argue it has), I bet the money will come flying in. Once the dollar appreciates, they'll be banking big!
- Tchaka
I would love to my friend. Great Blog., you put some time into this. Great work
Ben
I actually might have smoe good contacts in Latin America...
Ben - thanks!
Tchaka - it is a great time!
David... nice post. As you stated, it has been easier for foreign nationals to get mortgages. And as Ben mentioned, it does look like your put some time into this...
David,
Maybe we should work together. I literally fly to many of the islands, South America, and Central America. Every time I go there and stay overnight, I talk with the hotels and try to develop connections. Sometimes it pays off.
I used to do the same thing in Europe except I was usually too tired by the time I got over there. Now that I am flying again, I will begin my marketing campaigns for foreigners again. Kind of cool when you can tell a prospect that you will fly there and meet them personally to get their transaction going.
Good post.
Hello David,
Don't forget Canada. I know lenders who can use Canadian credit reports. I done loans for Canadians moving to Arizona and I've often thought of doing some marketing there.
Europe maybe be the bigger market!
Good luck!
Shailesh
David, I'm going to follow up with another response because I just saw something on CNBC saying that the Pound is now worth over USD2! I don't think the dollar's been that weak since maybe the early 80s? Combined with housing prices having adjusted lower, it certainly is a good time for Europeans to buy. I'm not sure how Latin American currencies are doing against the dollar so I can't comment there.
- Tchaka
David, this is not the only time i've heard about this investment moves. In fact, i am going to pass this to one of my clients in south Florida. Great blog
Geo Target, Pay Per Click in different languages could work for you. CPC will drop down and CTR will improve. Visit my website.
Thanks Jairo
I will check out your website
by the way - honeymoon was 1/2 vegas 1/2 sonoma... Sonoma's beautiful... we were in the city - at the Lodge ...
Hello David,
Great Blog. That is my niche. I work with people from the U.K. to find vacation homes. I keep daily track of the exchange rate to make sure to pass it on to whoever I am speaking with or e-mailing that day. Last week the exchange went up to $2.04 per pound. Today it is at $1.99.
I have made some great friends and contacts from across the pond!
i have 4 beautiful beachfront lots in the florida panhandle (herringproperties.us) i MUST sell!! any ideas om marketing to canada, europe, or even usa? ANY advice would e greatly appreciated, thanks, george
I need California lenders for Foreign Nationals. Do you know of any lenders that will do Calif properties? I notice on the internet it all seems to be in Florida.Thanks!!
Working with two European couples right now... both cash deals though which is even sweeter. However, it'll be good to know someone who is accustomed to mortgage lending to foreigners... got you bookmarked for future reference!
Your website was great.
Hi David
Thats a fabulous breakdown! I am going to keep your details handy as you have a frim and knowledgeable grip on this market.
I have seen a continuing increase in "European Vacationers" in the Florida Keys and many are checking out the environs to see if our area is a fit to their lifestyle. UK continues to domainate in that area but I also see quite a bit of Scandinavian activity.
Please follow our blog for the latest news on foreign national mortgages http://www.acmhomeloans.com/MyBlog
News on the market in 2010