This is my last update on my much discussed foreign real estate investment. The final return on this investment is now about 33%.
We started with an expected return range from 40 to 98% in mind. We assumed something in the middle of the range was doable. There were unforeseen costs and a surge in supply in the area, which made the sale difficult and thus brought the price down. In the end, 33% over about a year is still a very strong return (construction started this time last year, but the land had been purchased six months prior -- the land, though, was cheaper than the construction itself).
The lesson here is to have a margin of safety, as we did, and to watch out for hidden costs, which eat into the profit margins.
All told, this was a successful investment in two fronts: a successful learning opportunity for three first-time real estate developers and a nice return to go along and set the bar high from here on.
Now I'm preparing for the next one. Or two or three.