Prime Brazilian Land Investment on outskirts of Natal City $115,000 USD/ 20,000m2

I have this land area for sale that is a brilliant option for just buying and sitting on for 3-5 years,especially if you are buying with the strong dollar,euro or pound.

It's located right on the BR101,the main highway that leads from Natal city up the north coast of the state.

It's just off a major roundabout with a big beer factory right opposite and an industrial belt,500mts

towards the city,ie the land is on the periphery of Natal's northern district(population of 400,000)

and only approx 8kms from the international airport.

There is a new housing development being launched on the other side of the road(the land is being cleared 

right now)

Another development for approx 1000 residential plots will be made next to the property over the next 2 years.

The land is 2 hectares in size with 100mts of roadside by 200mts in depth.

The property could serve for the following in 2-3 years time;

1.Housing development..minium 60 homes

2.Apartment complex of up to 300 apartments

3.Shopping mall

4.Supermarket

5.Wharehouse facility/factory

You would have several options;

-) Subdivide into lots and re-sell

-) Sell a part/all the land when the time is right for 

-) Make a partnership with a developer to build the homes/apartments.

For this you would receive approx 18% of the units built(in cash)

In the case of homes = 11  x R$130,000

In the case of apartments = 54  x R$ 110,000

This parcel is available for R$ 450,000 / 116,000 USD

I understand that the location is not touristic with particularly nice views but this is where the action is,it's a highly dynamic market and the area is expanding fast which makes it much easier to re-sell/negotiate for higher returns.I would be able to offer the land for re-sale or partnership through my contacts in this area and also have larger development parcels available close-by.

BRAZILIAN RECESSION IN 2015 AND BEYOND...GOOD/BAD FOR FOREIGN INVESTORS IN THE REAL ESTATE MARKET ?

So much has been written about the Brazilian economic recession and political crisis recently, it all seems to add to a sense of impending doom. I live in Natal in the North-East of the country and it is certainly true here that people are losing their jobs, personal debt is rising, prices overall continue to rise and the local government are making cut backs.. all this has been happening at a gradual pace over the past 8-10 months. There is no political breakdown at a local level, people are not on the streets protesting, there are no shortage of goods in the supermarket, no calls for revolution, just less security about the immediate future of the economy. This is what I'm seeing on a personal level and is one sense of reality, affecting brazilian people at the moment.

But  does this current Brazilian economic downturn have an adverse effect on foreign investment ?  Is it a dangerous time to invest in Brazil?

As a realestate broker and investor on the ground in North-east Brazil, I would say that opportunities abound, especially in land investment and definitely large potential in the tourism industry, short to long term...I think this recession still has some bite in it, unemployment may well continue to rise along with inflation and the budget deficit may yet worsen but the Brazilian economy has experienced the good times for over a decade(since the last major downturn in 2002) and this recession was bound to happen as part of any countries natural economic cycle.

Are there risks to invest in realestate in Brazil at the moment? Perhaps but the potential gains from applying your capital here are far higher than the returns you could expect in Europe or the U.S in the next 1-5 years.

One of the key factors to investment potential and a direct result of the recession is the Brazilian currency depreciation (down 35% since last year and 50% in 16 months) As a foreign investor you are effectively getting 50% more for your capital than you would have in early 2014.. this is significant.

The average value of the Brazilian Real to the U.S dollar over the past 18 years (since the launch of the Real) has been R$1.8. Today the rate is R$3.80, yes R$3.80 ! Presuming that the currencies revert to equilibrium in the coming 12-36 months, your realestate investment now will reap the reward in dollar terms (without any property appreciation factor)

The North-East is still a developing regional economy but is developing fast! Cash is King in any recession and land aquisition is the key investment strategy to doing well in this market (as explained in my book, details below) This is what our real estate company (with 9 overseas partners) invests in and we are making lucrative land investments in 2015 with every confidence that our strategy will be profitably rewarded in the years to come. I would heartily recommend that you too jump in and take advantage of these extra-ordinary times.

Afterall this Brazilian economic recession will pass, recessions always do!

Mike Smith

Mike is author of the best-selling Amazon Kindle book; The Essential Guide to Land Investment in Brazil for 2015 and Beyond.

http://www.amazon.com/Essential-Guide-Investment-Brazil-Beyond-ebook/dp/B00QPFSVYG/

The essential guide to property investment in Brazil for 2015 and beyond is a must read for any international investor who is looking to apply capital and achieve maximum returns in the Brazilian realestate market. There is no book quite like it as it's is based on the bottom line, pure and simple; how much to invest, what to invest in and what returns to expect.. straightforward and very lucrative information direct from a brazilian expat investor who is doing the exact same thing for himself and his investment partners.. you will gain invaluable knowledge in four specific investment products here in Brazil, learn the common mistakes brazilian investors make and get a better understanding of the logistics in setting up your investment plus how to implement your exit strategy.

Avoiding Common Mistakes When Investing in Brazilian Real Estate (Extract from “The Essential Guide to Land Investment in Brazil”

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Brazil is a challenging but ultimately very rewarding country to do business in.  But things can go wrong. Investors will try to take short cuts by failing to have paperwork checked thoroughly and miss out on basic procedures, checks that can prove very costly and stressful in the long run so let me just tell you about some of the things I have seen that can go wrong with property investment in Brazil.

Documents

First and foremost, documentation, you need to check that the land you are buying has all the required paperwork, straight off..the land should have a public deed that is registered in the local notary office and be in the name of the person /company you are buying from.

The property also needs to be registered with the local municipality and the land dimensions, location and owner need to match up between the two departments.

This is absolutely fundamental in ensuring that you have a safe and prosperous investment. If the documents to the property are faulty in anyway, any subsequent development will be put in jeopardy and you stand the chance of losing your money.

If you go ahead and purchase the land because it seems like a great deal and have not carried out these checks it could prove to be a very costly mistake right at the get go.

For example many of the properties in this region do not have ownership rights but rights of possession, or ‘posse”. This means that the property does not exist legally / publicly but was purchased with a private agreement between buyer and seller and passed on through the generations. If you enter into this type of purchase you open yourself up to potential land disputes as anyone can come along and claim that they have a purchasing agreement for the same property. You cannot legally build on this type of land and therefore are unable to sell. There is a process (usucapião) where you can apply for legal title to the property after a certain amount of years but this route can be agonizingly slow taking years to finalize by which time you’ll have missed out on market growth and potential profit.

I would therefore advise you to only consider purchasing property that has the correct paperwork. This period of due diligence may take a week or so to establish with a good lawyer  or licensed real estate agent. They will also do a thorough check on additional aspects of the property, tax liens, existing legal suits.

Planning permission

I would advise you to get an architect involved, pre-purchase to put a project together for the parcel based on the local building codes of the municipality aligned with your investment model and then get a basic consultation with the local planning department  and the relevant environmental agency to check if it is viable.

This will give peace of mind and prevent any nasty suprises further into planning, construction phases.

So you’re going to buy a property that is legally registered with a definite blueprint of what can be built, according your specifications.

Lay of the Land

You also need to establish the topographical status of the land. One of my fellow investors purchased a large area of land in the interior of the state and licensed a project for 300 homes. It was only when they started to lay the house foundations that they discovered the solid rock under the top soil. This meant they had to drill deeper foundations and added over 1 million dollars to construction costs.

Alternatively land that is below sea level can appear to be perfectly fine for development purposes during the summer months but turns into a lagoon as soon as the rains come. This means additional costs as you need to dump truckloads of dirt to level up. Make sure you have an engineer look at the lay of the land  so you can at least factor these realities into your development budget.

Secure Land Perimeters

When you buy land here please ensure that you secure it with a perimeter fence or wall depending on your development plans. There are cases where local residents have invaded open land areas, built shacks and claimed ownership. This can prove a headache as you will probably need to file a legal suit to get them evicted and this can be a long drawn out process. If the land is clearly marked it sends a message to any would be opportunists so make sure you establish ownership of the property and secure it.

Going into partnership.

This is a problem that often arises.  A foreign investor comes to Brazil, strikes up friendship with a local Brazilian / foreign resident and decides to go into business together. The friend speaks Portuguese fluently and seems to know their way around so it makes sense to have this kind of local know how and support but with no capital or a disproportionate amount. This can be a blessing but is more often a fatal mistake. Once the friend becomes a company partner with equity in your business they have a part controlling share and should the friendship sour you could have a major problem extracting this person from the company.

Make sure that you run a check on anyone you are going into business with as a partner. It is fairly easy to research through social media channels to find out if the partner has had experience with property investment and perhaps get some references from people you can gently reach out to.

It’s very important to gather this type of information as best you can before entrusting company equity and decision making powers to the potential partner.

Overstretching your resources. Don’t go too big too soon.

This applies to all the development investment options mentioned in the previous chapters. With the subdivision, break up the project and develop in phases, for the gated community, try to minimize your initial development costs, build one showroom and get your orders in off-plan before proceeding with the more costly infrastructure and with social homes, try to make make sure you are not dependent on the funds due from the last batch of homes to complete the next batch otherwise you run the risk of defaulting.

The development needs to be of a manageable size that you can afford so you are not overstretched. There is always the possibility that you won’t be able to sell all of your plots / homes in the anticipated time so it is prudent to have a capital reserve to account for any delays / downturns in sales.

Delegate

Last but not least is the need to delegate..don’t try to do everything yourself. There are big opportunities here but the business is challenging especially if your portuguese skills are not up to scratch. This is a team effort so you need to employ the right professionals to get the job done.

When you are purchasing the land you’ll need a real estate agent to guide you through the process, for the project you need an architect, a lawyer to oversee paperwork, an accountant to run the books, possibly an administrator to organize the operation and a builder to deliver the infrastructure and homes. This structure is fundamental to doing good business here.

You can sub-contract this team of professionals or hire full-time depending on the size of your investment operations here.

I know some investors who want to be more hands on and start getting involved in buying, delivering building materials, attempt to train the labour force or  try to take on the due diligence when purchasing property. This is all well and good if you specialize in one of these business aspects and can add genuine value and improve efficiency. However more often than not micro-managing turns into mini-migranes!  It creates problems as you can become frustrated by the Brazilian business methods and general work culture. Pick the right team and then leave it up to the professionals to do their job and supervise operations. The job will get done alot more smoothly and you will able to sleep at night and make money in the process.

If you follow the guideline set out in this chapter and avoid the common mistakes that investors make you will have a much better chance of profiting from your investment and multiplying your returns.