We sat al fresco at a café table at the edge of the cobblestoned plaza sipping prosecco in the shade of a white umbrella, my husband Lief and I, listening to Luis’ remarkable recommendation. He was insisting we’d doubled our money.
We three had sat in precisely the same spot two years earlier. That was the day we’d met property agent now friend Luis. We’d identified this market at a bottom on Portugal’s glorious Algarve coast and hopped on a plane. We wanted in.
Our Lisbon attorney connected us with Luis who showed us six apartments for sale in one afternoon. We’d stopped at this café after our marathon property tour to regroup on the investment opportunities on the table. We were determined to act.
Across the road were the beach, the harbor, and the marina. Seagulls soared above white sails at the horizon. Narrow roads meandered up the hillside behind us, their cobblestones laid like mosaics in contrasting patterns, light and dark.
Each passageway was lined with centuries-old structures, some whitewashed, others faced with tiles of blue, green, red, and yellow, all protected by 16th-century city walls anchored by the Bandeira Fortress with its drawbridge and moat where Phoenician and Greek merchant ships once sheltered.
Two-thousand-year-old Lagos is the jewel in the Algarve’s crown, managing to become modern without surrendering its Old World soul. A classic crossroads, this city with Roman, Arab, Christian, and corsair heritage welcomes travelers and traders of all description. We wanted a reason to return.
We also wanted to make some money. This was a chance to buy into a market on a path for boom at an historic dip.
One of the properties we’d viewed with Luis was a 200-year-old townhouse on a winding pedestrian-only passageway two blocks off the square, two bedrooms on three levels with a rooftop terrace and a sea view.
Every apartment we saw that afternoon was a great buy, but this one was an extraordinary bargain. The seller had a mortgage she needed to get out from under. If we could close in a month for cash she’d sell for 100,000 euros. Done, we told her.
That was summer 2015, in hindsight the moment this market hit bottom. We were among the first to notice and then quick on the ground. Within two months of our buy, prices began a long and impressive march up.
We bought what we bought because we didn’t want to buy common. In a competitive market, common can’t compete. Plus, we prefer houses of character. They have intrinsic value, and they’re also more pleasing places to spend time. We believed the historic townhouse Luis found us would appreciate ahead of the curve once the market turned.
We were also investing for cash flow. In season, the streets of Lagos bustle with tourists from across the Continent, the U.K., and beyond. Twenty-something Euro-vagabonds with rasta hairdos, elaborate body art, and guitars slung over their shoulders mix with families with young children and well-heeled retirees.
We found renters off season, too. Our rental manager kept the place occupied 90% of the two years we owned it.
Lief and I have invested in 21 rental properties across 8 countries. We look for a minimum return of 5% to 8% per year net of management fees and all expenses. Our Lagos property netted us 9% annually.
In addition, it connected us to a place we wanted to know better. We enjoyed two summer holidays here with our son.
It was a home-run investment. Why did we sell?
Because that sunny afternoon when we returned to Lagos with Luis and sat again with him at our favorite café, he insisted he could flip our sea-view buy in a week for twice what we’d paid.
“In a week?” Lief asked skeptically. “You could find a buyer in a week to return me double my money?”
“Buyers are bidding against each other,” Luis explained. “Everybody wants a stake in Europe’s hottest market.”
Lief looked over at me and I at him. We smiled at each other and nodded. We’d have no trouble finding other uses for that capital.
“Let’s sell,” Lief said holding up his glass. The three of us toasted the decision.
Three days later Luis emailed to say he had a buyer for 4,000 euros more than our ask.
I didn’t set out to be a property investor. I made my first real estate purchase at age 25 when I married my first husband. That was a starter rowhome in northern Baltimore City. We traded up two years later for a 100-year-old Craftsman in New Freedom, Pennsylvania.
When my first husband and I divorced, I returned to Baltimore where I bought a three-bedroom brick home with mature gardens and a big back yard for my daughter.
Each of those purchases was made for personal reasons. The choice for what to buy was based on charm appeal. I gave no thought to when or how I’d exit or how much appreciation I might enjoy. I did make money from each buy but accidentally.
Then I met Lief Simon. Nothing about his approach to buying real estate was accidental.
Lief had made his first property investment a few years earlier. He’d taken a $5,000 gift and turned it into $150,000 profit. The buy was in Ravenswood, an up-and-coming northside Chicago neighborhood of middle-class office workers and first-generation Latino immigrants.
Here, after months of searching and take-no-prisoner negotiations, Lief put together a deal that allowed him to make the buy with but $5,000 cash. The asset was a building configured as three two-bedroom flats. Lief lived in one apartment and rented out the other two. The rents generated enough income to cover the mortgage payment. When he sold two years later, Lief walked away with $150,000 after all expenses.
Next step in Lief’s plan was to diversify abroad. That’s how he came to be in Ireland, where he and I met on a tour I’d sponsored and sold to readers of my International Living magazine. Turned out, Lief was a lifetime subscriber.
I used the trip as a chance to scout locations for the EU office I was to open for my partners at Agora, the publishing company behind International Living. Lief was searching for his next property play.
Within three months of the trip, Lief and I were engaged. A month later we were married. The month after that we moved together to Waterford. Now we needed a place to live.
Lief’s $150,000 profits from his three-flat in Chicago combined with the $50,000 I made selling my home in Baltimore funded our first joint property purchase. Lahardan House was another home run. It was our charming and beloved family home for five years then, thanks to the Celtic Tiger timing, returned us four times our money when we sold.
That return made possible the purchase of an apartment in Paris that we own still. That property has been both a home base and a short- and long-term rental and, according to the website of French notaires who track and report values, is now worth two-and-a-half times what we paid for it.
And so we’ve continued over three decades, converting profits from one buy into a next investment.
In all, Lief and I have made 57 property purchases across 24 markets over 30 years. Nineteen times we’ve returned 200% or more, including from that townhouse in Lagos.
Eight times we’ve lost everything. Nothing is guaranteed.
Every purchase has been an adventure and an education.
We’re not jet-setters. Lief is the son of a single working mother from Phoenix. I’m just a middle-class girl from Baltimore. But you could say we’re living a jet-set lifestyle.
For me, the lifestyle advantages have always been the prize. Lief is my perfect complement. For him, it’s all about the ROI.
In today’s world, overseas real estate is not only the sexiest but also the smartest way to invest your money. It’s a key strategy for diversification at a time when diversification is not a sound investment approach but survival. The very good news is that you do not need a big budget to get started. Remember, Lief launched his career with $5,000.
The objective stretches well beyond making money. Yes, you build wealth this way, but you’ll do more than rack up profits. It might seem like the world is spinning out of control. This is how you put yourself in the driver’s seat of your financial future.
You’ll be positioned for upside in the immediate term in the form of rental yields, in the mid-term in the form of capital appreciation, and over the very long haul creating a legacy for you and your heirs.
All the while, purchase by purchase, you’ll be reinventing your life.
Until next time,
Kathleen Peddicord
Founding Publisher, Overseas Opportunity Letter
