Simple Solution to the Great Paradox

By Chris at www.CapitalistExploits.at

KISS... You've likely heard the acronym used before: Keep it simple, stupid!

It can be applied to anything in life, except for perhaps keeping one's wife happy which is why man invented quantum physics. I was reminded of this when a friend recently began complaining about his very expensive luxury imported car and the cost to get it serviced.

Truthfully, it's a horrible looking ostentatious thing which I'll refrain from mentioning for fear of offending some readers (OK, it's a Jag). But nevertheless - I realized that my cheap and nasty Nissan Land Cruiser has no such problems. It's almost impossible to break and even when not serviced just keeps on running like a well watered 20-something Kenyan.

I like simple. Investing in real estate, like my trusty Nissan, is simple. The factors to consider when determining any real estate purchase are easy enough to understand and the cashflows are typically stable and easy to quantify. Leverage can usually be added and quantified.

Real estate can be as lively as an Ibiza disco to your income statement, while at the same time appearing to look like a slum from the outside. I have proof. It has the ability to turn pennies into pounds when bought well, and when well positioned has been the cornerstone of many millionaires beginnings.

It is therefore a tragedy that central bankers have made such an enormous mess of our credit markets and incentivized ever increasing layers of debt.

As a result, when we scour the globe for opportunities it's incredibly rare that we see huge opportunities in much of the developed world. Paradoxically, markets which have been cut off from the monetary spigot often present far more compelling opportunities. 

Colombia is a country we've had on our radar for some time and in line with keeping things simple, I provide a few factors prevalent that have us interested:

• The income of the average Colombian has doubled in less than a decade, bringing a massive shift into the middle class bracket.
• Leverage is very low and interest rates high. Unlike the insanely indebted Western world, Colombia still suffers from a banking and credit system which is still in its infancy. This is a good thing for risk reduction.
• A banking and credit sector that is growing rapidly meaning that while leverage is low now that is not likely to remain the case indefinitely.
• Strong GDP growth.
• Low(er) unemployment.
• Controlled inflation.
• A growing housing deficit due to demographics and disposable income.
• Closely tied to the point above is the fact that there exists a lack of capital available to developers, further constricting supply.
• Large scale infrastructure projects underpinning growth.

On the topic of Colombian real estate I recorded a brief call with Hector Quintana of Zen Global who will be joining us in Colombia for our Seraph Meet Up.

We discussed Colombian real estate and opportunities we find most interesting there. I think you'll find our conversation valuable and invite you to listen below:

If you wish to join us in Medellin, Colombia in August to explore opportunities in the local real estate market and more, you can get more information HERE.

- Chris

"Simplicity is the ultimate sophistication." - Clare Boothe Luce

Comments

[The Ingenious G...]

My dad's boss in the 60's had a jag. He had the same complaint about the cost of getting it serviced...every week.

You'd think Jaguar would have learned something in the 60 years since, or at least gone out of business. 

Nice leather seats though.

[strangeglove]

Dont forget the Coke and Hookers! Columbia has everything a fleeing Bankster may need.

Me Im the Captain of my ship and Im going down with her

USAUSAUSA!

[CHX]

I KISS 2 and stack.

[Model T]

I knew there was something i really needed, since I don't have any problems; Columbian Real Estate ! That ought to do it, alright.

[ramgold2206]

FFS I'm so fed up with all this bullshit...Ireland took the opposite direction to Greece yet the problems remain (just under the surface). The euro project is doomed but it will limp on for years crisis after crisis dragging everyone down with it.  

BUT ITS NOT JUST THE EURO... ITS ALL FIAT CURRENCY.. ITS REACHED THE END OF THE ROAD...

Reading ZH convinced me to own gold to try remove myself from this madness as best I could but like nearly everybody I had F..K all extra cash to convert into bullion.

6 months ago I had no cash and no gold and a shed load of credit card debt.. Now I have a some extra cash.. a few ounces  of gold... and I'm rid of the dreaded credit card debt..all from reading Zero Hedge and its commentators, taking that knowledge and doing something with it!!! thanks guys I owe you.

If you find yourself in the same position as me and you're willing to try your hand at network marketing, you could use the commissions earned to acquire gold bullion from Karatbars. Its not for everybody and I'm not pushing it on anyone it's just another option for you guys. All I can do is testify that its working for me - There is no reason why we can't make it work for all of us..

if you're interested in what is a decent opportunity visit  www.teamramgold.com my own site - email me for info it costs nothing to have a chat. I would be delighted if the some of ZH community teamed up with me because we all have an understanding of underlaying problems causing the pain for people and phyical gold is the kryptonite to those issues.   

[zvzzt]

Please block GuusJa - spamming with off-topic crap in a language that nobody a few care about...  And yes I'm Dutch and can read what is posted. Might as well be about cookies, donuts or the new dildo being shipped with free extra lubricant. As said, completely offtopic

[Poekieman]

@GuusjA: Dit is een internationale site, bijna niemand kan Nederlands lezen, alleen poldersukkels, vlamingen en mss wat Zuid Afrikaanse boers...

So I suggest you try writing in English...

And your comments are way off topic too, btw...