A 500 % Investment Return? Only in Venezuela!
Venezuela is one of the countries in Latin America that attract the most interest from investors. The difficult economic, political and social situation it is currently undergoing, far from ruling out the country as an attractive destination for investments has made it a destination where the investment return in the mid-to-long-term is much higher than in practically any other country.
Venezuela has been in everyone's eye politically and economically in recent years, but for all the wrong reasons. A couple of decades ago, the country was one of the most stable democracies in Latin America and a thriving economy.
But after 20 years of socialism, things start going south.
Despite a huge oil revenue due to the price hike of over $100 for many years, Venezuela was an economically unstable country: Double-digit inflation, isolation from international markets, growing debt, and a dramatic reduction of the FDI flow.
By 2014, inflation in Venezuela was close to 70% and the GDP was already declining. Everything got worse when oil prices fell in 2015 and then, in 2018, when the US approved the first group of economic sanctions that were not exclusively aimed at high-ranking officials of Maduro's regime.
All this led to an economic crisis that included inflation of 10,000,000 %, according to the IMF. Also, the last time Venezuela's GDP grew was in 2013. Since then, it has contracted by 49.6 % until 2018. This means that it is projected to fall by more than 60% between 2013 and 2019.
Reading all this, you will surely think that in Mundo we are crazy to recommend investing in such a country. Of course, considering the current situation Venezuela is going through, it doesn't seem too attractive for investments.
However, with great risk come great rewards. Venezuela has hit rock bottom and that means it is wise to bet on a medium- or long-term economic recovery, even if there is no political change. In fact, before the coronavirus crisis, Venezuela was already taking some small and shy steps towards small deregulation of the economy in search of progressive recovery.
And, as we told you in the title, real estate investments promise an otherworldly investment return for those who are bold enough.
It's certainly not an investment for the faint-hearted, but Warren Buffet once said, "when everyone is afraid, be greedy."
Venezuela seems to be a wonderful opportunity for those who want and can take the risk. Across the board, Venezuela resembles Russia and the post-Soviet states of the 1990s: failed socialist economies with a highly educated population, vast natural resources, demand for western goods, and almost no foreign investment.
Just look at Cuba: with much less potential than Venezuela, a military dictatorship, and a barely shy opening, it is receiving a huge influx of investment.
Real estate: the best bet in Venezuela
Venezuela enjoys very
diverse landscapes and cities: from the financial potential of the capital,
Caracas, the oil and agricultural potential of Zulia, to destinations with
great tourist importance such as Margarita Island. Venezuela offers all kinds
of investment opportunities in diverse sectors, all with great expectations of
return.
The complex political
situation that Venezuela is currently going through is characterized by a
series of international economic sanctions that the government of the United
States of America has issued through the Office of Foreign Assets Control
(OFAC). The sanctions aim at hindering and even blocking transactions with the
Government of Venezuela and with any public or private entity that operates
within certain economic sectors.
The ambiguity of
these sanctions led some companies, such as Adobe or MLB, to over-comply, which
improperly extended their real scope.
The US Government's
economic sanctions prohibit almost any type of commercial transaction with the
Venezuelan Government and any of its institutional agencies. These prohibitions
are extended to the oil sector and any organization where the Venezuelan
government or its agencies own 50% or more. This, considering most of the
Venezuelan industry was nationalized, leads inaccurate analysts to say it's an
impediment to operations with and in Venezuela.
On the other hand,
it is important to emphasize that US sanctions do not prohibit transactions
between individuals on assets located in Venezuela. Hence, the real estate
market is a market with high potential investment returns and with the greatest
international legal certainty.
Who will be able to
take advantage of all the investment opportunities that Venezuela offers? Those
who have the best legal advice to guarantee the interests of shareholders, to
allow the channeling of investments and the good administration and protection
of assets while the current political situation lasts.
Venezuela, having
been one of the richest countries in Latin America between the 70s and 90s,
enjoys an infrastructure that received considerable investment (economic and
intellectual) at the time of its construction. For their construction, the best
materials on the market, the most innovative designs, and first-class
techniques were used.
Many of these
buildings are today in disuse or with partial occupation and waiting for
visionaries to acquire and reactivate them.
The current economic situation
in the country has meant that many organizations do not have the cash flow or
the economic means to maintain and develop the full potential of this
infrastructure available in different sectors of the economy.
This potential
includes, but is not limited to, shopping malls, agricultural farms, fish and
shrimp farms, residential and office buildings, industrial plants, and land in
highly strategic locations in the heart of the country's major cities.
Another element to consider is the massive emigration from the country. There are a number of individuals of all kinds (workers, professionals, novel, and seasoned entrepreneurs) who are leaving the country looking for better opportunities.
This has even caused them to sell their assets (from vehicles to real estate)
at excessively low prices to obtain sufficient capital to start a new life in
another country. This has caused the supply in the real estate market at
auction prices to be excessive. Thus, prices are not only affected by the
crisis but are also affected by an excess supply of goods at incredibly low
prices.
Venezuela is the
perfect storm for the visionary investor. There are lands of excellent location
in the main cities of the country with a current market value of $130/m2 when
only five years ago, they were valued at $500/m2. There are sectors where these
gaps are even more dramatic and whose development potential is unmatched.
Concerning leasing,
the regulatory framework differs according to whether the sector is office or
industry, commerce, or residential.
Regarding office,
industrial and commercial leases, the laws are relatively flexible and allow
normal management of these types of rentals. However, in the area of
residential leases, the regulatory framework is highly protectionist, to the
point that housing evictions are virtually impossible to carry out. This has
the following consequences:
1. It is advisable to
use an exclusively holding strategy when it comes to investment in housing
property;
2. As a result of this difficulty in renting,
housing properties are even less expensive on the market because few owners
take the risk of renting out this type of property.
Caracas has, by far,
the cheapest square meter among Latin American capitals. While in Buenos Aires
it is over $2,000 and in Bogota, it is around $1200, in Caracas today it is
under $500. And in other cities, such as Maracaibo and Valencia, the square
meter cost can be as low as $150.
A three-bedroom,
120-square-meter room in an upper-middle-class area in Caracas could cost
around $200,000. The price has fallen to about $60,000. In other cities, like
Maracaibo, it is even more dramatic. An apartment of the same characteristics
in an AAA zone can cost $50,000, and in a middle-class zone, it can even reach
$15,000.
Estimates by various
experts in the Venezuelan real estate market indicate that, regardless of the
occurrence of a political change, the market of real estate destined for
housing should see a revaluation of at least 600% of the current value. In the
case of properties destined for office, industrial and commercial use, the revaluation
ranges between 400 and 500%.
Even if these
estimates are not correct, a revaluation of 100 % is still much higher than any in other place.
This is why one of
the most attractive forms of investment is in properties for office, industrial,
and commercial use. The profitability of a lease varies between 6% and 12% per
year of the current market value of the property. What does this indicate?
That, when it comes to real estate structures intended for commerce or business
use in general, the investment strategy is not limited to a simple holding
company as significant cash flow can also be obtained through a lease of such
property.
These levels of
profitability by renting are almost unique in the world. However, this requires
you to have an expert ally that offers first-class legal and financial advice
to guarantee the legal security of the property and the investment in general,
since part of the profit is precisely in the correct management of the risks.
Do you have questions?
In Mundo, we have the best experts just for that
Investment in
industrial plants and land for agricultural production are also attractive.
Venezuela is
characterized by having much lower production costs than other countries in the
region due to the low price of land, wages, and raw materials. For this reason,
a very attractive investment that can bring income in the short, medium and
long term would be the acquisition of industrial plants, unused farms, and/or
the injection of capital for the reactivation of their operation and channeling
its production for export purposes.
With the previous
strategy, the investment return would not only be seen in the revaluation of
the acquired property, but also in the profit achieved by the acquisition of
raw material or goods at costs well below the international market.
Profit and savings at
the same time: only in Venezuela.
There is no better
investment in the medium and long term than Venezuela. Prospective investment
returns are unmatched by any other country. Indeed, it is an investment not
suitable for the faint of heart, but with the advice of Mundo, you
will obtain unparalleled benefits from your investment in Venezuela.
Current land prices
are at least five times below the value they would have in a normal situation
and are much lower than in countries comparable to Venezuela. That is why it is
not only an opportunity due to its current situation. It is in a very peculiar
position that seems to be the perfect storm for the investor who is confident
in the economic resurgence of the country (which gave its first timid signs
before the COVID-19 crisis) to be the most benefited investor worldwide.
The key to enter in
this matchless business opportunity is sound legal advice for the channeling
and protection of the investors' capital.
And in Mundo, we can offer the best advice in the market to secure your investment
and allow you to obtain wonderful returns.
Five reasons to invest in real estate in Venezuela
Investing in a
distressed asset
If you are familiar
with the financial world, you will know what a distressed asset is. Imagine a
car with a broken engine and its owner does not have money to repair it. You
can buy it at a bargain price, repair it, and then sell it and make a fantastic
profit.
Investing in
Venezuela is like that. It's about having a little resilience and patience,
buying at an unbeatable price, and making great profits in a few years.
Investment return of
more than 500%
Just as in
post-Soviet Russia, many investors obtained investment returns of more than
1000 %, investing in real estate in Venezuela could bring investment returns of
more than 400% and that is from a relatively conservative estimate. If there
is a political change or the Venezuelan regime applies an economic turnaround like
China or Vietnam, the returns could be even higher.
Incredible investment
opportunities
Venezuela was once a
cattle and fishing power. Today, many of these facilities are abandoned or
diminished. But this means that you could acquire large agricultural farms for
a never-before-seen price, reactivate them, put them back into production and
get a terrific ROI by selling them back in less than a decade.
Much more than
holding
It might seem that
acquiring a commercial space in Venezuela would imply a mere holding strategy,
but this is not the case. The annual returns of office space in Venezuela are
between 6 and 12%. This is a first-rate figure and means that your investment
does not depend exclusively on waiting for the situation in Venezuela to
improve. You can receive high returns on your investment now.
No sanctions issues
Most properties in
Venezuela do not fall within the framework of sanctions imposed by the United
States. It is probably the safest market to invest in Venezuela from a legal
point of view, and with the advisory we can offer you in Mundo, you will have a
legally and financially protected investment without incurring any type of
sanctions or legal inconveniences.
Navigating the Venezuelan legal frame
Knowing how to manage
the complex legal framework of Venezuela is a necessary asset for every
investor who seeks to take advantage of the benefits of this country's gold
mine.
When it comes to
Venezuela, the first thing to note is that it is a socialist country where all
kinds of controls abound, such as
● Prohibition of firing workers and limitations on hiring foreigners.
● Price controls.
● Regulations of the percentage of profit on products and services.
● Regulations on exchange control.
It must be taken into
consideration that there is a series of regulations at the international level
that restrict the margin for negotiating and celebrating transactions,
investment, contracting and financing when dealing with Venezuela in the
aforementioned sanctions applied by the US government.
The correct
management of the scope of the US sanctions against Venezuela is essential for
any investor with interests or links in the US who decides to diversify his
investment portfolio to include Venezuelan assets.
Acquiring a property
in Venezuela is relatively simple. However, one of the preliminary elements to
take into consideration is that it is necessary to process a Business Visa at
the nearest consulate, which the investor has to be able to visit.
This does not mean
that you must be personally present in Venezuela. In most cases, you will be
able to acquire your property without necessarily traveling to Venezuela. You
will simply need to grant a power of attorney to one of our experts in
Venezuela for all matters concerning the acquisition of your property.
It is also essential
to consider that certain properties require the approval of the National Guard
or some other military security agency to be acquired. This situation is a
significant risk factor to consider, and it is better to review your
suitability on a case-by-case basis. Tourist areas, such as Margarita Island,
often fall within these special territories.
Who are we, and what can we do for you?
In Mundo,
hand in hand with our parent company, we have 25 years of experience in providing tailor-made
solutions for investors around the world.
That is why we offer
a wide range of investment, banking, trust, and immigration services around the
world.
We know that one of
our clients' favorite investments is distressed assets.
And all
Venezuela is a great distressed asset.
Those with the right
advisory, resilience, and courage to invest in Venezuela's future will gain the
business of their lifetime.
And in Mundo, we are
here to offer our world-class expertise so that you can earn unprecedented
revenues.
Our experts in
Venezuela work with top-notch real estate agents and have the necessary
expertise to navigate the complex Venezuelan legal framework so that your
investment is secure and guaranteed to be free of sanctions.
That is why we have
at your immediate disposal such properties as:
● Hotels in all the Venezuelan territory;
● Shopping centers in the most important cities of
Venezuela;;
● Residential buildings and complexes, built and
under construction, in various cities;
● Farms for agricultural production;
● Farms with potential for farming and shrimp
production;
● Land of unbeatable location, of all sizes and for all types of use (residential, commercial, or office).
But looking at the
complex Venezuelan landscape, you will understand that it is not as
straightforward as simply reviewing a portfolio of potential investments and
acquiring an attractive property.
You need a top-notch
expert who can help you navigate every step of your real estate investment in
Venezuela.
For this reason, some
of the services we offer are:
● Attraction and legal channeling of foreign
investment in Venezuela.
● Commercial representation before the corresponding
public bodies for all types of industry. This service is particularly important
due to the omnipresent regulation in almost all sectors of the economy.
● Consulting the evaluation, planning, structuring,
documentation, and execution of the acquisition of real estate.
● Real estate consulting.
● Advisory on planning, structuring, documentation,
execution, and protection of leasing operations in Venezuela. This is essential
given the complex legal framework of leasing contracts in Venezuela. Our
services cover all areas, from the conclusion of a simple lease contract to
handle the legal implications of managing multiple leases.
● Any other service related to compliance with legal
and regulatory requirements necessary to carry out projects and investments in
general.
Investing in real estate in Venezuela has an unparalleled potential worldwide, what are you waiting for?
$170,000
$2,500,000
$350,000
$1,400,000
$395,000
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