US Real Estate Investment is Russian Roulette With Only One Barrel Empty

Czech Point 101 December 8, 2014 @ 10:55AM

This morning I got up and started to read the top news headlines. One particular one caught my full attention: “Boehner calls for spending cuts as debt limit looms” on the BBC.

US real estate investment for non-citizens like Russian roulette with only one barrel empty

US real estate investment for non-citizen like Russian roulette with only one barrel empty

It wasn’t a big headline but the contents to me were another nail in the coffin of the US economy and dollar. In the article it says that the US would default on its existing debt obligations if the government wasn’t approved to increased their borrowing on May 16th.

Borrowing in order to pay debt obligations? Isn’t this a huge sign that a borrower is one step away from default?

US Real Estate Investment – Opportunities Unrivaled

I am an avid listener of the podcast “Creating Wealth with Jason Hartman” which is located in the US and focused on property opportunities across the country. As highlighted on his show and across other venues, I strongly believe that there are currently fantastic investment yields possible in US locations that are unrivaled in other locations, including here in Czech Republic.

Many international real estate agencies are pushing investment deals in the US right now with gross rental yields of 12% +. I am a firm believer that these deals exist.

If I was a US citizen I would be plowing as much money as possible into local property and fixing the interest rate on the mortgage.

The US Dollar – The Biggest Risk Factor

The major problem I see right now is that the fiscal situation of the US is extremely precarious. The above article highlights this when debt is being used to service debt.

Unfortunately for a non-US citizen, there is a huge risk factor in the US dollar. All signs point toward the continued deterioration of the dollar.

CZK vs USD - 10 Year Trend - US real estate investment warning

CZK vs USD - 10 Year Trend

How long will it continue?

In this article: Could the growing U.S. debt create a financial crisis? it quotes Anthony Sanders, a professor of finance at George Mason University who makes two great analogies of the US debt situation.

You cannot keep kicking the can down the road,” he said. “Eventually, the debt loads are going to be so large you cannot continue to service it.

“The only way to manage all this is to cut government expenditures pretty severely, but that has a cost, too,” he said. “We have painted ourselves in a corner.

The US government seems unwilling or unable to tackle this mounting problem.

Who Should Consider US Real Estate Investment?

For those who have a very big investment portfolio it makes sense to take a gamble on US real estate investment. I strongly believe that the timing is right and the deals to be had are phenomenal.

A non-US citizen investor would also need to have an investment horizon of 10 or 20 years since it is quite likely that the US dollar will not recover within this time period.

However, those who do must realize they are playing Russian roulette with only one barrel empty. The odds are very strong that your investment will be getting a bullet.

Updated/Aktualizováno: ,


  1. Stop Foreclosure

    Ok, the graph is depressing, but now is actually a good opportunity to grab some deals in real estate in the US – – a lot is just sitting going to waste right now.

    And, agreed, government spending will have to get under better control, but until the economy recovers a bit more, the govt still needs to take care of its obligations, and invest some in nudging the economy in the right direction.


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