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Starting Your Real Estate Investment Journey Overseas with Andrew Henderson of Nomad Capitalist

To join Ken McElroy’s Newsletter, follow this link: https://www.kenmcelroy.com/news — Join Ken McElroy and Nomad Capitalist founder, Andrew Henderson, in a discussion about their experiences with starting real estate investments outside of the US, things to look out for, and the best countries to get yourself started.

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Ken McElroy:
Welcome everybody. It’s Ken and I’m here with nomad capitalist and we’re talking to Andrew Henderson and he he’s going to help you guys a lot today, we get a lot of questions around tax and, and a lot of, you know, especially now with Biden coming into the office and, uh, Andrew, I saw you had a really good video that that’s gone kind of viral about the, you know, when Joe Biden got elected and, and you know, it’s crazy. So welcome. Welcome to the show.

Andrew Henderson:
Great to be with you. Thanks.

Ken McElroy:
So I know you guys probably know that taxes are, definitely going to be the number one expense in your lifetime. There’s no question about it. And, um, so Andrew has legally reduced his taxes from 43% to 1%. He’s got a great book called nomad capitalist. You can find it on Amazon. Uh, Andrew. Welcome. Welcome. Welcome.

Andrew Henderson:
Yeah, it’s my pleasure.

Ken McElroy:
So I’ve invested in Mexico and I know I had to go through that fideicomiso process. And, and, and I know a lot of people now, especially with all the migration patterns around the United States that we’re starting to see and people are moving. I was looking at this morning, you know, the state tax rate like in California is like 13%. And in New York, it’s 8.8. And, uh, I’m in Arizona. It’s 4.5 and people are kind of moving around, you know, based on the limited amount of money that they have. And I know a lot of folks have looked in the past about, you know, moving their money out of, out of the country and, and how to do that legally and how to establish another residency, how to get another passport. Um, so let’s just jump right in. Let’s start with the benefits of buying properties overseas. What are some of the big benefits you have seen in property outside of the United States?

Andrew Henderson:
Well, there’s a number of benefits. I lived in Arizona for a number of years. They’re, they’re raising taxes. If you dare make over the, a tidy sum of $250,000, which, you know, the way they’re printing dollars, it’s not really so much anymore, but, uh, I lived in Arizona. It’s going to be a lot worse, I guess in California is gonna be worse. But what I’ve been doing for years is investing in properties overseas. I’ve been living overseas. Uh, so the, the benefits will be number one, if you think that, uh, you know, somebody like Joe Biden or someone, some of these Democrats are going to come and force you to put your retirement account or your money into treasuries, things like that. Uh, it’s asset protection makes it hard to take your assets. We don’t suggest people do anything as shady, but a legal asset protection.

Andrew Henderson:
That’s a good idea. Higher returns. You know, you look at some of these returns and some of these places, and especially in some of the places in the U S volatile returns, you can get higher, more stable returns potentially, uh, or especially in some of the uncorrelated frontier markets, emerging markets around the world. Uh, you can get exposure to foreign currencies as the dollar continues to slump. This year, people are saying the dollar will go down more so you can get the exposure more reasonably, and the more profitably those a bank accounts, uh, you can, uh, get not only a higher, uh, returns, but, uh, again, more consistency. Uh, you can also get things like you mentioned, residences citizenships, you buy a property, you get a residence permit in some like in Turkey, for example, you get a passport within months. And so if you’re thinking I want a place to live, where they’re going to let me in, they can let me spend my time.

Andrew Henderson:
There potentially a tax friendly place. You can go and live, or if you want to take it all the way and become a citizen, then this is potentially not in every country and not in many of the countries that people talk about. The Caribbean islands, that’s rubbish real estate. You don’t want to do that, but in places where you can buy real real estate and get a residence or citizenship, you are setting yourself up to have that plan B. But if you want to leave the U S you can do so you can take your money with you, and you can do what I say, which is go where you’re treated best, not so much anymore.

Ken McElroy:
Well, I love that video. You have on YouTube called what’s your plan B. And I think everyone should watch that video and take a look at what are some of the countries that you like right now?

Andrew Henderson:
Well, I like a lot of different countries. I look at from tune buckets. Like I’ve been a big fan of Cambodia for eight years. I think a lot of it’s become oversaturated, but there’s still some areas in the core of Noam pan. The capital city is doing fantastic. I just had a friend who bought a, uh, a multifamily beautiful building by the way, beautiful river view is right in the center. Uh, doing great yields. And I mean, it’s hard to replicate that, but it’s, it’s harder and harder to buy as a foreigners. You have to come in with, someone knows what they’re doing, but that’s a market I’ve been very excited about. I think Mexico, you mentioned is interesting. I’m looking at properties like landmark plan B stuff in Ecuador. I’m here in Columbia right now. I’ve been a fan of this market a little more.

Andrew Henderson:
Hands-on potentially, I’ve been a big fan for about five years of the country of Georgia. Got a little bit expensive for me in the last year or two. Now prices have come back down. I’m seeing sub $1,000 a meter properties. And then I’m looking at a, uh, you know, interesting up and coming markets, places like, uh, uh, who’s Becca, Stan, Egypt, I think offers a lot of potential. And I mentioned Turkey. I think that there’s parts of Istanbul, which are very, uh, dollar, uh, based that even as the lyric goes down, as we’ve seen recently, you’ll see your dollar value preserved. You can get a citizenship there quickly. I think it’s an under invested in a market that has huge population growth. The country’s growing. We’re just seeing today. Uh, they’re probably going to get a big boost with the ability to travel to Europe. So those are some of the markets that I looked at. I think there’s something for everyone. Yeah.

Ken McElroy:
Yeah, there definitely is. And I know, you know, having invested a lot of people don’t think that they can invest out of the country safely. And I know, you know, one of the things that you said in your, in your video as you kind of, kind of be leery about who you’re doing that through, whether it’s, it’s a, a real estate agent, uh, why is that? And who’s better. Who’s the best person to find out information. If you’re going to go to a country, let’s say for the first time what’s, what are the right steps people should take?

Andrew Henderson:
Well, my, my approach, uh, you know, I work with what I say is seven and eight figure entrepreneurs and investors. We got out of the crypto investors. We got a lot of very high net worth people. And, you know, I do what they do is I go to the best lawyers in the city. And I look for the best lawyers I shop around. I’ll probably hire three or four different lawyers and I’ll get to know who’s the best one. And I think a lawyer is often a great person to develop a network through. So I’ve had, let’s take George. I mentioned, I think there’s probably about two good real estate agents in the entire country who don’t show up an hour late and cargo shorts. And, uh, I’ve been lucky to find them over the last number of years, both through my attorney. And so if you have a guy who, a killer attorney, not the guy, you know, the courthouse steps with the, uh, the cardboard sign, you know, doing residences for $300.

Andrew Henderson:
But the person who really does a good job, that’s a great place to meet. And so I think if you’re going to a place for the first time, you know, you have to put some skin in the game, you have to go out and hire people who know what they’re doing, because there is in Georgia. In most of the places that I mentioned, there’s no MLS, there’s no place to find properties. There’s no central repository of places. Uh, and if there is like an, a Turkey, it’s often a scam in countries like Georgia, you can go on play style GE with this study, once we call it a hundred properties, and I think 82 had already been sold or warrant for sale. Like I sold, I bought a property. I sold it years later. And when I sold it, after I sold an after I took the listing down, the listing from the previous guy was still up there.

Andrew Henderson:
People were still calling him about my property. So you have to know him in these places. I mean, you can make a lot better returns. And again, I mean, for me, if I’m buying the city center of a place where the Chinese are descending on that to me is pretty much more stable than Los Angeles. Or you look at San Francisco, New York looks at the beating they’re taking from COVID. Um, you know, people are fleeing and maybe never coming back. And that’s a lot more stable as those countries emerge. But, you know, the downside is you have to have that network.

Ken McElroy:
Yeah, you do. And, and one of the things that I always tell people I like that you do too, is sometimes when you go into a market and it’s unsophisticated, that’s actually a good thing because you know what, what happens when you start to see all this technology like Zillow or realtor.com, realtor.com, all those kinds of things, what it does is it kind of, it kind of balances the playing field. So, uh, can you talk a little bit about that? Cause I know what happens a lot of times, and you briefly mentioned it, people pull up these big, fancy websites. I’ve done that, you know, I was like, okay, where do I get a passport St. Kitts comes up to the top of the list, big, fancy website and all that kind of stuff. But there’s a lot to know below that. Can you, can you talk about how you need to be careful a little bit on some of these websites and, and as you mentioned, the word scam, some of these are scams.

Andrew Henderson:
I don’t even use the word scam and at least maybe in very few cases, but yeah, I mean, it looks at these Caribbeans citizenship by investment programs. I’ve had so many Americans who are seeing, uh, the patina come off from the last year and there’s thing. I want a second passport, you know, I’ve got 50 million bucks, I’m not moving, but it tastes, things get bad in the first place. They look is the Caribbean Saint Kitts. Uh, Domenico Grenada, I’m a Saint Lucian citizen, for example. And, uh, you know, in those cases you can make a donation or you can buy some really overpriced real estate. So unless you’re going to commit to buying a multi-million dollar Villa, that is just for your own use, and that’s going to be a lifestyle, I’ve got a guy doing that right now. We’re probably going to do that right now.

Andrew Henderson:
That can be a good deal. Some guy built eight villas. Maybe it’s not the best deal in the whole Caribbean, but for that, I, when it’s a normal and you can buy one of his bills because you’ve registered it with the citizen ship commission maybe then, but these deals where you put in, you know, money’s a timeshare and these forget it, never, uh, now you look at a place like Turkey when I was just at the airport a couple of times back in December, uh, cause I have a property and a symbol. And um, you know, you look at the airport and they have all these things that are both mostly designed to bring in the era. Uh, investors back when Turkey’s citizenship was a million dollars, they hit all the glossy in flight magazines. It’s okay. But I always say, and then I’ll tell us on my team and I’ll take them with me somewhere and we’ll get to the airport and I’ll show them the pitch.

Andrew Henderson:
It’s always like the top floor of the penthouse. And there’s a woman at a very cleavage-y evening gown looking out the window at all this skyscraper, it’s always wondered, you know, you’re being ripped off and you’re seeing this evening, gab, that’s when you run away. But you go to some of these websites in Turkey, for example, yeah, it’s all rubbish. Or it’s under price. It’s like a lead generation machine or it’s overpriced. Do you need to go to these, you know, these brand new buildings and the problems that you have, these Arab folks, investors who come and, you know, as long as it looks nice, who cares? If it’s two hours outside of Istanbul and traffic, they don’t care. You want to be in the city center by and large, or you want to be in the resort. Are you, you don’t want to be an hour away.

Andrew Henderson:
So, um, I think that anything that’s overly marketed, um, you know, what we do is we say, you know, as part of our service to people, uh, you know, you can pay us and we will assist you. And if you’re buying a million dollar property, uh, you’re going to save a lot of money. If you’re doing these golden visa deals, by the way, these turn anything turning key, uh, never a good deal, uh, or almost never a good deal. So anything to glossy, to turnkey, to design for a passport or a residence program, you see properties in Portugal, 500,000 a year, a minimum, you buy your property. A lot of those are 420,000 year properties. They marked up and nobody cares. Well, you should care. It’s 80,000 Euro is a hundred thousand bucks.

Ken McElroy:
Yeah. If you guys are going to try this, you definitely got to go through somebody who knows what they’re doing. Cause, uh he’s right. And, and you know, it’s harder and money and things are going to get marked up. Robert Kiyosaki and I, my business partner on real estate, he, he says that, you know, the bigger, the bigger the brochure, the worse, the deal.

Andrew Henderson:
Yeah. I mean, it’s, it’s very simple, right? And so I’ve said, um, for example, you’ll get a golden visa, unfortunate don’t conflate investment with residents. If the residents come to introducing in the free market where the passport comes in, the free market. Fantastic. But when you look at a place like Portugal for a golden visa, why not put money in an investment fund? Why not put money in the bank? Right. Well, why are 90% of Dolton visas in some of these countries? Not to those options, there’s no one makes a commission on it. And so I tell people about those things, they may have been looking at a program for months and they just are now realizing, Oh, there’s an option besides these overpriced real estate.

Ken McElroy:
Right. Right, right. So let’s talk a little bit about, you know, cause you always hear these horror stories, especially Arizona. We hear it about Mexico. The time a lot of people get nervous about investing because they think that their land can be taken by, you know, by another government, you know, which it can. But why does that typically not concern you and what can people do?

Andrew Henderson:
You know, for me, I think the number one thing is the mindset issue here, right? If your mindset, I remember talking to some folks from Australia once and they said in our culture, if you’re from Adelaide, investing in Sydney is like scary. And people will talk to you out of it. It’s this insular isolated culture. And if you, if you think that your country is the only one, you know, what I tell people is the United States and really any kinds of, they’re not number one in anything you want the freest economy in the world, that’s Singapore, you know? So if you go to the list, freeze the economy, most stable banks, you know, everything, the U S has not appear. Number one in anything except for prison population and perhaps obesity. Uh, I think Mexico might be right up there, but you know, you understand the U S I lived in Arizona, so I still understand Arizona, but it’s a matter of educating yourself, which I think is why my attorney and expert approach for you’re paying for advice is a good thing.

Andrew Henderson:
Especially if you’re an investor looking to replicate a system, uh, you want to know what’s going on. I look at a lot of those. A lot of the places I mentioned are small countries. And what I think that these countries have realized is an increasingly competitive age. They can’t afford to be messing around. Uh, and so you’ve seen a Georgia, for example, that’s so long ago become buddies with the former president. Saakashvili? Kind of a controversial guy, but what no one can dispute took the guy from a Soviet hell of all run by the pull up Bureau guy to the six, three is economy, uh, or six easiest place to start a business in the world. And one of the top 12 freest economies freer than the U S you can buy a property title transfers in three days, it cost $15. You don’t need a lawyer.

Andrew Henderson:
Um, you can have a lawyer. We don’t need one. And, you know, he basically turned the place upside down that was in your lifetime, in my lifetime. And that’s the kind of country that wants to bring an investment. The United States, many European countries are what I call legacy brand countries. I mean, remember this, the debate back in the presidential election last time was how Donald Trump was trying to use eminent domain to take people’s property. Atlantic city. There’s not been a domain in the United States. I just had a friend. He has a beautiful business and they come and say, we need your land to expand our tollway. So here’s what we’re giving you. You don’t like it.

Andrew Henderson:
It’s a nice check and that when he was happy to get the business, but do you think this doesn’t happen in the U S so, you know, my perspective is you have countries that are looking to bring capital in because they’ve seen what happens when they don’t, and then you have countries, or you’re from it, where I’m from originally that, you know, have written the gravy train. It’s like the Paris that maybe a dated reference. It’s like the Paris Hilton of countries, someone four generations ago, did something great. And nobody in power now understands why. And so now they’re actively working against it.

Ken McElroy:
Right, right. So a great content. Thank you. So now we’re going to jump over to some red flags. Andrew looks for when investing overseas, and this is for our premium. You can sign up for this and other exclusive questions at kenmcelroy.com/premium.

Ken McElroy:
You guys want some more information, just go to Andrew’s website, uh, nomad capitalist, and you can find a lot more of this information, uh, on a lot of what he talked about and of course, uh, much, much more. Andrew. Thank you. I appreciate your time.

Andrew Henderson:
Always great to be with you.

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