Two weeks ago, I shared a land-banking opportunity in Northeast Brazil that I recently invested in.
I purchased two coastal lots (sub 100k USD for both), explained why I believe this particular region has considerable room for growth, and invited those of you interested in doing the same to speak with Melissa (Sales@BrazilBeachfront.com)
Well, the response has been tremendous, and over the past couple of weeks, Melissa has been speaking with a steady stream of readers interested in the opportunity, and one thing in particular about the land deal I brought you guys has seemed to capture some serious attention:
The financing aspect.
My partners are allowing members of our community to secure fully titled coastal land with ZERO DOLLARS DOWN and monthly payments starting at just $1,250 USD.
$1,250 per month for a 320-square-metre lot, or $1,500 per month for a 360-square-metre lot.
Both can be purchased outright at a discounted price or financed over 36 months.
Good luck finding an arrangement like that in your home country… let alone in a growing coastal region of one of the founding BRICS economies.
We're not talking about some remote piece of land in the middle of nowhere, with no economic activity or meaningful development taking place around it.
We're talking about coastal land in a Brazilian state attracting billions of dollars in infrastructure, industrial, tourism and technology investment.
A state where international hospitality companies are committing substantial capital, airports are being modernized, major transportation infrastructure is under construction, and some of the world's largest technology companies are establishing a presence to capitalize on the data/cloud center boom.
I've known my Brazilian partners for going on seven years.
Over the last four or five years, we've worked closely together to build high-upside rental opportunities for our community.
One of the biggest lessons I've learned after more than 25 years of international business and investing is that some of the most interesting opportunities come through relationships.
When you work with people long enough, show you can bring serious investors to the table, and build a reputation for following through on your commitments, doors start to open.
That's why I can bring you opportunities that never make it onto the public market, negotiate terms that wouldn't normally be offered to individual buyers, and invest alongside people whose businesses and reputations I've had years to get to know.
In this particular case, my partners have demonstrated an extraordinary level of confidence in our community.
That is a meaningful commitment on their part.
My partners have enough confidence in the Expat Money & Brazil Beachfront communities, and in the relationship we've built together, that they're willing to let us acquire land with no upfront payment.
They trust that buyers from our community will fulfill our obligations over the next 36 months, just as we always have.
In this community, we say what we are going to do. Full stop.
If you didn’t read the most recent edition of BB, I want to give you a quick, simple breakdown of the investment category this opportunity falls under.
It’s called land banking.
Land banking is one of the simplest real estate investment strategies to understand.
You purchase land in an area where you believe future growth will make that land more desirable (and thus more valuable), hold it while the surrounding region develops, and eventually sell it at a higher price. That's it.
You're buying land today because you believe somebody else may have a much more valuable use for it tomorrow.
It doesn’t mean land banking is easy money, and it certainly doesn’t mean it is a foolproof way to generate a return on your capital.
The strategy depends on identifying the right location, buying at a sensible price, understanding what could drive future demand, and having the patience to wait for that demand to materialize.
Some investors get it wrong.
They buy land in areas that don’t develop as they expected, lack the patience to hold it until its value rises sharply enough to their liking, or sometimes get greedy and set a selling price that's too outrageous, so the would-be buyer looks elsewhere.
1) Active (intentional about the strategy)
2) Lucky (think about the families who owned land outside cities that eventually expanded toward them).
Obviously, luck isn’t a strategy.
So instead, savvy folks like us study where development is heading, understand what is already being built, and position ourselves before the market has priced in those changes.
We’re making a calculated decision to acquire a finite asset before the surrounding market potentially becomes much more valuable.
That means I need to be comfortable holding it. It also means I need to be confident that the price I'm paying makes sense relative to what is happening in the area.
As I explained last week, lots in one early development nearby tripled in value in just about 3 years.
Could something similar happen to the land we’re investing in? Absolutely.
Will it? No one can say.
What I do believe is that well-positioned coastal land has the potential to become more valuable as infrastructure, tourism, and development expand around it.
Within the larger master parcel where I purchased my two lots, my partners have made two types of property available to our community.
When I looked at this particular opportunity, I didn't see one reason to buy; I saw several independent pieces of the thesis beginning to form:
In this particular case, that's enough for me to put some capital at risk and be patient.
None of those things guarantees I'll make money, but given I got into the market at roughly R$650 per square metre, I believe the current pricing leaves meaningful room for appreciation if the thesis continues to play out.
If you've been looking for a relatively accessible way to own a tangible asset in Brazil without taking on another rental property, I think this is worth investigating.
LEARN MORE ABOUT SECURING LAND IN THE SAME MASTER PLOT AS I HAVE, BY VISITING: WWW.BRAZILBEACHFRONT.COM/CONTACT
Or, if you want to connect directly with my sales associate, Melissa, you can send her an email at: Sales@BrazilBeachfront.com
If my thesis is right, five or ten years from now I expect to be negotiating with parties who need the land I own and are prepared to pay considerably more for it than I did.
If you secure your own position inside the same plot of land as me, I expect you’ll be doing the same on the same time horizon, too.
Speak soon,
Mikkel