Unless you are very familiar with the country that you are investing in, it is risky to dabble in such real estate.
This was what happened to the couple who spent about $800,000 to buy 16 properties in two projects in different countries in 2012. This gave them the ammunition to take the two different sellers to court for misleading them with untrue information. A sales representative told them that the developer had a good track record of successful developments and that the first phase of the project was already being built because the demand for its homes was good.
That gave the couple the confidence to put down around $200,000 as the “reservation deposit” for three units, but they never saw the homes as the developer later went bust.They also did not get their money back as the people behind the various foreign companies that concocted the scheme managed to siphon off substantial sums that had been paid by buyers.
The agents claimed that, in addition to spending a year in Brazil to study the project and the developer, they had also invested a six-figure sum on due diligence checks to ensure that the investment was safe. The first is the use of escrow accounts, which are often used to hold money as a form of securities, so parties involved in deals are protected.