Begin Your Global Investing Small

Making a real estate investment in a foreign country could easily become a “learning experience”. The profits could be enormous. That is because the risk can be enormous as well. The global financial crisis seems to be abating a little, so maybe it is time to get your feet wet. The trick is to get your feet wet without drowning.

There is an easy way to get started with a minimum of risk. Unfortunately the upside potential is less than an active real estate investment. The vehicle is foreign stocks. Almost all of the online brokerage houses has some type of “Global Account” where trades can be made in local exchanges and local currencies. After thoroughly researching some countries as if you were going to make a large investment there, choose your investment target country. This is the most important step.

Watch the market in that country or examine the historical data. There are two ways to go from here. The easy way is to buy an ETF (Exchange traded fund) or REIT (Real estate investment trust) that invests in that country. The second is to build and imaginary portfolio to practice investment skills. You could even do both. Buy the ETF or REIT and practice individual stocks until your imaginary portfolio outperforms the ETF. At that time it may be good to put your money into the portfolio that you handle yourself.

In many cases there will be foreign tax regimes to negotiate and emerging markets can be volatile. After a year or two, you should be familiar enough in the market to make a direct investment. You will have limited your loss to a predetermined amount.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Positive or Negative...It's a Point of View

Bernanke has signaled that QE may be coming to an end. This is being called the Taper. The stock market is upset. They think interest rates will go up (they already are). This will make investment capital more expensive. It will move money from equities into bonds. This is not all bad.

Many fixed income people have been suffering from low interest and low bond yields for several years. This will give them money to spend, which will help retail. It will also reduce their dependence on social programs and charity. It could make it a little harder on home buyers, but it may cause some people to be more open to owner financing. It may even cause investors to put properties on the market to turn rent into mortgage income.

In a sense the central banks are saying, “We can do so much. The politicians need to do their part.” Unwillingness to compromise is ruining the economy. It is a shame that congressmen are not paid on a performance basis. Most of them would have to make a contribution.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Rise of the 4th Reich

Two world wars couldn’t do it. Germany’s attempts to rule Europe failed both times. Finally, by way of the Euro, it seems as if they have made it. Austerity, which works fine in Germany, has strangled the rest of the countries in the Euro. Now Germany is suing the ECB (European Central Bank) to back off on quantitative easing, which is the only hope for many of the marginal countries and the economy of the rest of Europe.

After the 2nd world war, it was obvious that Germany’s industrial power house was so strong that they would soon out produce the rest of Europe. That would raise the possibility of a 3rd war. Europe had had enough. There were two choices. The Europeans could wait a few more years and have a German Europe, or they could put together the EU and have a European Germany.

Some economists say that the only way the Euro will work is with a true financial union. If that is achieved, Europe will be German in all but name. Who knows? They may even change the name a little further down the road.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Balancing Resources

Do you remember your parents saying; “Turn out the lights when you leave the room”? Now the power companies say use CFC’s to save electricity. Hybrid and electric cars are supposedly reducing energy use and pollution. Where does that energy come from? A lot of it comes from coal.

Some of it comes from Nuclear and Hydro. It has been said that it requires more water to turn the light on in the bathroom than it does to take a shower. Maybe we are damned if we do and damned if we don’t. How can the economy, available resources and protecting the environment work together?

They probably can’t. Oil, Electricity & Gas have largely replaced coal and wood in much of the world as a home heat source. Are we really better off? What about the damages caused in the acquisition of these resources? We build modern cars that run on ethanol or electricity, using up our food and water. Where is the trade-off? The only real answer is to go nowhere, eat cold food and stay home in the dark with the television off.

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

No Middle Ground

            The world’s political, social and economic middle seems to be disappearing.  In the USA the Republicans and Democrats take extreme opposite positions and refuse to budge.  Paraguay’s leftist president took the country into disaster.  After he was impeached, a staunch conservative took over.  Venezuela’s upper class was so abusive that they created Hugo Chavez.  You can’t get much worse than that.

            Austerity is a principle that should be practiced when times are good.  Instead, the government gets money and spends twice as much.  An example is the Bush tax cuts that led to our situation today.  Now our government, like those of Europe, is trying to cut all of their expenditures when they should be investing in infrastructure and putting people to work.

            The gini coefficient in much of the world is dropping.  Soon there may be no middle class.  When the middle goes away from any structure the entire structure collapses.  Are we headed back to the middle ages?

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Multi-party Parties

The world has laughed at Italy for being unable to form a government. Perhaps the in the USA we should be laughing out of the other side of our mouth. Or be crying as the case may be. Having only two parties, fairly equally balanced has led only to stalemate. With many parties and no majorities compromise is required to even rule. The possibilities of compromise increase on the events that matter to the populace.

Governments, political parties and businesses should have and adhere to a firm set of principles. They don’t need a firm set of attitudes. Hardening of the attitude is referred to by Wayne Dyer as psycho-cirrhosis. This is a killing disease. Absolutes are paralyzing government to the point of self destruction. If government were a business, it would be bankrupt. Not just because of financial issues, but because of unhappy customers.

Most politicians seem to be only interested in getting re-elected. This would not be all bad if it forced them to listen to their constituents. Unfortunately their constituency is not as important as their campaign fund. It seems that in most cases, the best funded candidate wins. If the NRA says one thing and the voters say another, the NRA wins.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Trap Snaps

An article on the Charles Schwab website this morning predicted that Europe was going into a depression. The only reason they are not already in a depression is that no one actually knows how to define a depression. One of the metrics is the unemployment. When one’s neighbor is out of work, that is a recession. When that same person is out of work, that is a depression. In many parts of Europe the unemployment is over 25%. The unemployment in some demographic groups is over 40%. A lot of people might perceive that as a depression.

In the “great depression”, there were rampant bank failures. The bailouts are the only thing preventing those failures now. The retirement systems in most European countries are absolutely ridiculous and should be reformed. Now is not the time. That money needs to go into the economy. Retired people spend money and don’t take up space in the workplace.

The German economy is tightly tied to the rest of Europe. Austerity is a way of life in Germany anyway. Imposing this austerity on the rest of Europe has cost Germany a big part of its market. Germany has the last successful economy in the Eurozone. When it crashes, the trap will snap.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Europe Trap (part II)

Hong Kong, like France, Germany and Britain, has an economy that is fully integrated into the world economy. They have a comprehensive social net to protect their citizens from financial discomfort, but they do not have reckless, foolish entitlement programs that burden the government. Argentina, while it has some international exposure, is a much more self-contained economy. They have an extremely high burden of entitlement programs. A person working for the government 1 day has earned a pension for life. Retirement age is very young.

When Argentina dropped its peg to the US dollar many Argentineans lost as much as 75% of their wealth overnight. Going forward they could take care of their internal obligations with devalued local currency. If Argentineans bought goods produced in Argentina they had inflation, but not as bad as that on imported objects.

The same thing would happen in the peripheral European countries. The real pain will come in decoupling from the Euro. Internal debt can be paid with depreciated local currency. Past international obligations are due in Euros. Many banks now offer accounts denominated in foreign currencies. These are backed by reserves in those currencies and can buffer the effects of inflation for local people.



David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

The Europe Trap

I can’t help but wonder if the European Union has totally lost its collective mind. A tax on bank deposits to save the banks! That can only cause a run on the banks. Then, there is this whole austerity thing when the economies need stimulus not an anchor. The government of the EU is destroying the economies of its borderline countries.


Italy, Greece, Spain, Cyprus and Portugal should get out of the Eurozone. Their problem is that they can’t because they need the bailouts. The European Union is an excellent idea. The Euro is only good for the strong economies. Britain should be in the Eurozone. The countries mentioned above should get out.

Hong Kong and Argentina provide excellent examples of the benefits and pitfalls of currency fixes. The Hong Kong dollar is pegged to the US dollar; so when the Hang Seng crashed, the entire Hong Kong economy did not collapse. The Argentine peso was tied to the US dollar and when they had problems, the dollar peg made things worse. Why does this happen? Come back and read “The Europe Trap part II)

David Segrest is an International REALTOR in Charlotte, NC. His email is david@segrestrealty.com , His webpage is http://davidsegrest.com , and his international real estate blog is http://dointernationalrealestate.blogspot.com/

Clean Coal

This is a famous oxymoron. Even if coal can be made to burn cleaner than it does, it still destroys the world when it is mined. China has just pumped 7.5 billion dollars into a small Australian town to bring the coal from under that town to a seaport so that it can be burned in Chinese power plants. The population of this town will triple with the new jobs produced.

The town itself will probably become unlivable in a few decades. Look at what has happened to a large part of the state of West Virginia. Once pristine mountain streams are now dead and killing the rivers into which they flow. Ash retaining ponds at power plants are collapsing and destroying the nearby environments.

The insatiable demand for energy today is driving us to destroy the world that our children will inherit. This feels like the beginning of a bad “B” movie. Picture yourself walking in a barren landscape, trying to avoid deadly violent mutations looking for something to eat that won’t poison you. Science fiction….I doubt it.



David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Hollow Demographics

The Economist Magazine ran an article on the hollowing out of the USA job force. They indicated that the new jobs becoming available are at the top end or the bottom end of the pay scale. People at the upper end will save their money and invest it. It is possible that their investments will be made abroad. People at the lower end have to constantly trim their budgets and decrease their style of living.

This will cause regular drops in consumer spending. More and more people will join the underground economy to stay afloat. This will impair the government’s ability to provide basic services. Cuts in education are exacerbating the situation. Military spending puts some money into the economy, but it does not improve infrastructure or educational levels. In many cases the spending is for weapons systems that will never be used. In other instances the materials just get blown up.

A serious investment in education and infrastructure could be made with the money that is currently going for defense. This is not a new idea. The interstate highway system was build as the Nation Defense Transportation system. More spending on education would reduce the spending on prisons. The Republicans do not want an educated population, because they would not be quite as susceptible to Fox news and Rush Limbaugh.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Jobs and Prosperity

It seems to be agreed that the economy will not truly heal until the jobs come back. Will this solve long-term problems? That depends on what kind of jobs come back. Building new weapons systems keeps people busy and gives them money to consume imported goods and local services. Does it really help things in the long run? It uses vast amounts of energy and natural resources and causes unbelievable pollution. What could be accomplished investing the same amount of money in infrastructure and education?

For one thing, the only way we can lower our Gini coefficient is to improve our educational system. There are plenty of people who are well qualified to get a “good job in a cotton mill”. The problem is there are no cotton mills. My dad’s first question when he was examining a new business opportunity was. “How will this make people’s lives better?” He knew that a business model based on providing benefits was saleable. What are the problems our world and our country are facing in the near and distant future? What are the skills and technologies needed to deal with these issues?

Directing our money and our energy into solving these problems will provide jobs and get the economy moving in a sustainable direction. New weapons systems will not.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

The Gini Coefficient and Income Disparity

The Gini coefficient measures the gap between the rich and the poor. The higher the number the greater the difference. The coefficient varies between 0 and 1, but is usually multiplied by 100. Canada and most of the western European countries have a ratio in the mid twenties. The USA was under 40 through the mid 1980’s at which time it began to rise. Now it is well over 40 and the USA has a similar position to many of the banana republics.

Anyone who has spent much time in Latin America knows that in this type of system, the poor people live in hell and the rich people live in jail. The middle class is almost non-existent. This has changed over the last several years. Latin America’s coefficients have been going steadily down, while the USA has gone steadily up.

Part of this can be explained by the erosion of our industrial base. Most of the problem comes from the governments theories of “trickle down” economics. The idea being that if the rich people get more money, the benefits will “trickle down”. Unfortunately the rich people use the money to invest abroad or by imported good. All the poor people get is a warm damp feeling on the back of their neck.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Keeping the World Working

The motto of the world ever since Adam Smith has been “grow or die”. Prosperity and standards of living and education levels have increased in most countries dramatically. Growth has come to mean producing huge quantities of goods that no one needs and convincing them to buy them anyway. Perhaps this is like the disease organism that grows and grows until it kills its host and then dies itself.

Many of the Developed countries have taken worker security and benefits to the point where their economies have become uncompetitive. Now there is clamor for increasing working hours and push back retirement age as an incentive for companies to expand or hire more workers. The short term benefits of this are pretty obvious. Long term, the goal is to reduce the expected deficits in entitlement programs.

Most of the countries considering these things are experiencing high un-employment. Is squeezing more out of workers the answer to this problem? This will eliminate the need for more workers. More jobs are needed. The solution to this is more consumers not more workers. A retired person or a person on vacation is a professional consumer. Perhaps, the whole structure of production, consumption and employment needs to be re-examined in the light of and organism that may be growing itself to death.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Linkages and Countries

In commercial real estate we talk about linkages rather than location. This used to mean proximity to airports, other transportation hubs, population centers and highways. Now the importance of linkages goes beyond the location and extends to the global community. An auto plant is more connected to the parts suppliers and raw materials producers and the dealerships that sell the cars, than to the community of its location.

Globalization has lead to greater productivity and lowered employment. While this seems to be a sudden phenomenon, it is not. The current economic crisis has merely accelerated the process. The jobs that are lost will not come back. The labor type of jobs that have been outsourced will continue moving for cheaper production. The new plants used to just move and take advantage of cheaper labor. Now they move and take advantage of new technologies as well.

This means that the 4000 jobs that moved to Mexico, were probably replaced with 3500 jobs when they went to China and 3000 jobs when they go to Viet Nam. Each time the factory moves, productivity and production increase. Employment decreases. A new strategy will be needed to keep the world working.

David Segrest, CCIM, CIPS, CEA, TRC, is a REALTOR in Charlotte NC. His web page is http://www.segrestrealty.com. His email address is david@segrestrealty.com.

Bubbles May not be all Bad

They certainly made Lawrence Welk famous. The economies of Central and Eastern Europe were the last to go into the tank. They had been buoyed some by membership in the European Union. Latvia’s real estate had been propped up by unrealistic lending criteria.

When the bubble did pop, it splattered hard. Most of these economies, except for a few little pockets, dropped like a rock. The thing to remember about emerging economies is that they move really fast. This has been the lesson learned in South America. The USA or western Europe may take years to recover. When these small economies take off, it will be rocket-ship style.

I’m not saying that it is time to buy. It is time to look for market landmarks. There will be some awesome opportunities and some terrific profits will be made. If it is not time to buy it is at least time for close observation of these markets. The examination must be of the general market; but pay close attention to micro markets. There will be pockets of greater opportunity. A rising tide supposedly raises all the boats. Some of these boats may have already sunk.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/

Time for Dreams to Come True

For many people around the world dreams have turned into nightmares. For others the nightmares can make the dreams come true. Buying a property at foreclosure or short sale in the USA is tough. In many places the complications make it nearly impossible. These are not the only properties that can be bought at a discount.

Many developers are holding land and can no longer get the financing to build the property out. Many other developers have properties that are built out and just sitting in inventory. These are opportunities for people with cash or access to financing. The dollar for some strange reason is in an advantageous position in reference to many currencies. This is a situation that cannot last. The perception is now, that no matter how bad things are in the USA at least the government is stable.

As other countries stabilize more, their currencies will rise. The people who buy now with valuable dollars, will have stronger currencies in the future to convert back to dollars. This means the profit on their investments will be multiplied.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/

Industrial Real Estate & the Global Supply Chain

The resort real estate industry has adapted to and taken advantage of globalization on a major scale. The industrial industry has adapted by opening offices around the world and trying to teach other countries how to “do real estate”. While we have to adapt to the laws of other places, we don’t always adapt well to the customs.

One problem is that the global supply chain demands standardization of procedures in warehouses and factories. Freight moves in standardized containers. Products come together from wherever the best source is for each module. The handling, shipping and stocking procedures have to conform to the standard systems. The buildings have to conform to the activity involved. Does this mean we can use a standard building?

In some cases it does. In other instances the building is the variable that makes the whole thing fit together. Plumbers would call it an adapter. The customs and processes come together in the building. In most cases, the loading doors need to fit the trucks and trains that deliver and remove the goods. The break rooms and offices need to fit the customs of the people who work there. Everything in the middle needs to bring the systems together.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/

Governments Respond to Hard Times by Opening Markets

It seems that lowered demand in local markets is forcing many countries to revise their attitude on foreign ownership of real estate. Several countries have regulation changes in the works to make it possible or easier for foreigners to own real estate. Australia has actually passed new legislation

The requirement of a permanent visa for real estate ownership has been eliminated. The $300,000 (Australian) minimum for students has also been removed. For developers the requirement to build within one year of acquisition on new land has been increased to two years. The 50% limit on sales of new properties to foreigners has also been lifted provided the property is marketed locally as well as internationally.

Even Mexico is considering dropping the ban on foreign ownership of coastal properties. Many people wonder why Mexico had the restrictions on coastal and border properties; but one must consider that immigrants from the USA stole 1/3 of the country.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/

Finding a Message of Hope

This is a traditional time of year to talk about a message of hope. Some of us in the real estate business may have to look a little harder this year. It is there. I found a message of hope in a most unlikely place. My wife likes to go to these investment “seminars” where the speaker feeds you in order to get you to come.

The one we went to last week was especially bad. The woman used very bad English, she was long winded. The food did not come until after the speech. The message was one of gloom and doom. She talked about low yield, extremely high inflation, real estate in the toilet, stocks unpredictable, and herself as the savior. I was depressed just by having to go. It got worse as the night went on. That negative message spoiled my appetite and my attitude.

It wasn’t until yesterday morning that the good news hit me. The real estate industry is in pain right now because of too much inventory and too little money. People still like to sleep inside; so our market will not totally go away. The real estate assets, if we can just hang on, will have to increase in value some day. Hyper-inflation will help this some. Hyper-inflation will also reduce the relative value of debt. Hallelujah.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com/ His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/