You may have heard of crisis investing, and how it was the basis of some of the substantial fortunes of the last century. That includes Warren Buffett, the “Oracle of Omaha” (and one of the greatest philanthropists of today).

Buffet made a lot of money in the 1973-1974 bear market — buying a large stake in Washington Post Company – an investment that later went up 100 times the buying price. He once said, “Be fearful when others are greedy and greedy only when others are fearful.”

And Sir John Templeton, who ran the Templeton Growth Fund from 1954 to 1992. Templeton was another serious crisis investor, buying into COUNTRIES and companies when, according to his principle, they hit the “point of maximum pessimism.”

There was an opportunity in Spain written up in the Wall Street Journal on July 22 nd. The headline screamed “On ‘ Foreclosure Road’ in Spain, Bargains Abound.” And on July 28 th, Investment International proclaimed “Property bargains in Spain up for grabs.”

I kind of hate to say this – but we were ahead of them. Not only in breaking the news, but we also told you WHAT TO DO ABOUT IT AND HOW. It’s great to get notice about these opportunities. But what those publications don’t tell you is exactly what to do and who to contact to make quick, large profits.

The Opportunity in Spain

I wrote to RETA members about how after nearly a d ecade of runaway demand and floods of cheap money in Spain, the Spanish developers took their eye off the ball. They took on more debt and risk than they should have, and overpaid for land. And then, of course, economic and financial crises combined with oversupply led to sales drying up in late 2007.

Of course, Spain isn’t the only country where this happened. But parts of Spain are among the few pockets globally where it makes sense for a group like ours to swoop in on a situation like this. (I’ll let you in on details of another below.)

High quality, completed units were left sitting waiting for a buyer. Banks needed to purge their loan books. Developers wanted to lick their wounds, move on and live to fight another day.

That’s why we had opportunities like the ones I’m sharing with you today.

Granada: For Broad Rental Appeal

Actually home to three UNESCO world heritage sites (The Alhambra, Generalife and Albayzin), Granada is steeped in history. In fact, Granada attracts visitors from across the world. Its international airport has flights from most major European cities, and it’s within a two-hour flight range of Northern Europe’s major population centers.

Culture, beaches, world class golf and other outdoor activities are easily accessible. This area appeals to weekend break visitors, golfers, history buffs and even as a wedding destination.

Domestic visitors and North Americans come in large numbers. The rental market isn’t dependent on the English golfer or the German sun worshipper. This area has broad rental appeal. And, of course, it’s a beautiful place to retire.

One plus for Granada is that it escaped the major development seen on Spain’s costas. This means that development has been tasteful, and there isn’t the major oversupply problem that we see on many of the costas. This part of Spain has intrinsic value that will always hold appeal.

A Case Study

I investigated this project in Granada that was launched pre-construction two years ago. Today it’s completely built, right down to final landscaping. On launch, 80% of the units sold quickly – and two-thirds of those were to the domestic market.

The rest were to Northern Europeans. It’s always a good sign when the domestic market buys so much of a project like this.

But…the developer’s timing was unlucky. In late 2007 sales volumes fell off a cliff in Spain. The market froze like a deer in headlights. If the poor guy had launched two months earlier, he would have sold out. (You know what they say – “a miss is as good as a mile.”)

Instead, he found himself sitting on inventory he couldn’t sell even though he’d successfully delivered the project. His bank didn’t want to wait anymore and strongly “encouraged” the developer to sell the remaining units at a steep discount.

The Secret of the Insider (“Off Market”) Deal…

I can’t reveal the name of this project here, but let’s call it “Project X.” Because the developer of Project X was forced to sell the remaining inventory for substantially less than everyone else paid, he wanted to keep this deal “off market.”

And that, my friends, is the key to the “Off Market” deal.

Often, developers DON’T WANT people who’ve already bought to find out that they are now selling at a huge discount.

So he simply keeps Project X from getting any publicity. Perfect for us because of the favorable terms we can get.

This Was a Good One…

In this case, I’m talking about a 288-unit project located just 25 minutes from Granada’s international airport, and a short drive from its historic center. Plus it’s been built to a Moorish theme – arches, water features and a Moorish spa are just some of the prominent attributes.

No big concrete bunkers here.

High-end onsite facilities include four swimming pools, a spa, gymnasium, saunas and gardens. Condos come with fully fitted kitchens including appliances, air conditioning and heating, garage and alarm. Unit sizes range from 538 square feet to 1,114 square-feet.

This is a fully functioning community with the management company already in place. We don’t have to speculate about build quality. It’s there. You can touch it and feel it.

Now, with 80% of the units sold, there was very little risk of being left in a shell of a building. (Can you spell MIAMI BEACH? I hear there are over 20,000 condos for sale in the Miami area. Wow.)

Here’s How the Deal Worked

As I explained, the developer’s bank had stepped in and was basically forcing a distressed sell off of the remaining units.

Prices were discounted by up to 36% off the list price.

These discrete “off-market” prices can expect gross rental yields in the region of 10% for the smallest units…figure 8% after expenses. Remember, this area has intrinsic value and unlike Spain’s costas, supply has been limited.

And – With Financing!

Here’s where it got really good. The bank offered up to 90% finance on these units with rates as low as 2.5% (this was a variable rate tied to European Interbank rates) and a term of up to 40 years. It made sense for the bank because they wanted to move outstanding debt from a troubled developer to a large number of private individuals.

(By the way, I do invest in the stock market. But up to now that’s not where some of the best returns came from. The solid performance came from “off market” international real estate, where the profits can be huge.)

The Secret of Secrets

It all comes down to one simple secret: Markets swing from too high to too low. So assets are quite often misvalued – either upwards or downwards.

Now, if an asset is overvalued, it’s hard to guess how much it might come down. 10%, 20%, 50%?

But if an asset is CLEARLY undervalued, chances are the swing back to the norm is going to be substantial.

And right now, after the worldwide boom for years (at clearly unsustainable rates), it means many assets have swung WAY to the underpriced side.

That’s why banks offer preferential terms for mortgages on distressed properties where they have an interest.

So while we need to avoid areas that will be in a state of oversupply for the foreseeable future – a place like Granada wasn’t one of those areas.

Want To Get In The Game Here?

The rental market there is strong. The folks who bought there can immediately show positive cash flow. In the next three to five years, I expect values to recover to the current list price and maybe more – the current price list is as much as 36% more than the folks who grabbed this deal paid.

Whether you view Spain as a pure investment destination – or simply a beautiful place to purchase a vacation home – there is now a whole range of golden opportunities available to those in a position to purchase highly discounted properties from distressed sellers.

I’ll be keeping my Real Estate Trend Alert members updated on the deals worth grabbing.

And This Is Just One of Many Opportunities

Now, I’ve reviewed dozens of deals like that Granada one recently.

I’d consider three or four to be strong enough for us to consider.

Many offerings are from developers I’ve known and worked with for many years. Others have been sent to me by trusted contacts in the industry. But my contacts don’t just extend to developers. I’m also on a first-name basis with real estate lawyers, title agents, mortgage brokers, and others who can help you buy property overseas.

In addition to “off-market” deals on habitable units, I’m also looking for deals where we get to participate in the purchase of development land at undervalued prices. This land needs to be in a market I like, of course..

But most importantly, the development team needs to be right…they need to have a track record of delivering similar projects and getting things done. The deal needs to be structured in a way that we get to enjoy the maximum upside potential.

Everything You’ll Need Within Minutes

As you can imagine, you can’t just pick up the phone and call me anytime you want to know about a deal. My own company is a fee-based service that is only available to a group of hand-picked clients who are willing to pay thousands of dollars for select advice.

But there is another way to get the inside scoop on the best real estate deals on the planet at any given time…

On my members-only website, I’ve compiled a list of the most interesting properties currently on the market. I’ve talked with developers, brokers, agents, land managers, tax people, the title insurance agent, government officials – in short, anyone who can give me the real story on a development.

Most of the time, I’m flying around to check these locations myself first hand.

You see I don’t just talk about this. I’m an active investor myself.

Just in the last 18 months I’ve visited developments in 15 countries. I’ve golfed with developers, had dinner with government officials like the Minister of Tourism for Guatemala (while riding out an earthquake during the second course!), and negotiated with the toughest lenders to get best financing rates for my members.

I’ve developed a near-flawless system that accurately pinpoints real estate bull markets while they are still in their early stages… long before most people are even aware of them.

And when I find the best deals, I negotiate “off market” deals with the developers on behalf of my private clients and a select group of individuals who follow the Real Estate Trend Alert.

Of course, not every opportunity will be right for every investor. But when you do see one you like, it’s important to act fast (but prudently, of course). This isn’t the kind of investing where you take your time, and mull over it for a few weeks.

You’ll get email “alerts” from me — the fastest, most efficient way I know of getting the information to you.

The Real Estate Trend Alert will give you all the details on how to get in on the investment. Who you need to talk to about down payments, financing, in-country legal help, and everything else that makes the transaction smooth and easy.

If you decide that a particular opportunity isn’t right for you, then you simply wait until the next alert and look at the next opportunity. There will never be any pressure to participate in any particular investment.

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