Offshore to the Rescue!

Did you know? South African investors are permitted to transfer a total of R1-million offshore without requiring a SARS tax clearance certificate and, should they be granted such a certificate, may transfer an additional R10-million into their desired US property investments. Did you know that you can invest with ease in offshore property? What is important is the type of investment you go for and that a reputable custodian manages the process for you.

YDL’s current focus for South African investors is a fix-and-flip model. This refers to the process of buying, renovating and selling a property for profit – an investment not without risk, but one that has been proven highly profitable in numerous cases.

Targeted returns on equity of around 10 to 15 percent per annum (in US dollars) are currently achievable within this market in the US – notably in Atlanta, Georgia. This is a market that YDL has settled on due to the metro’s high demand for residential property; after four years of real estate transactions in Atlanta, we have acquired an intimate knowledge of the important aspects of investing here. These include: the best neighbourhoods to target, the most reliable contractors, and the laws and taxes you need to consider.

To renovate and sell-on a property, YDL focuses inter alia on these must-do points:

  • A detailed viability study of a property, with the aim being to complete the flip within a six-to-12-month period.
  • Buying right, i.e. the right market, right area, right price. This encompasses sound market research and the development of efficient mechanisms to source investment properties.
  • Proper due diligence, including doing a title search; assessing the condition of the property; determining the rehab scope and budget; obtaining realistic quotes; and settling on a realistic estimated sales price.
  • Selection of an appropriate contractor, with the skill set to deliver quality work – both within budget and a reasonable timeframe.
  • Financial management, control and accounting.
  • Establishment of appropriate legal and tax structures.
  • Sound supporting administration, i.e. implementation of selected structures; the drafting and execution of legal agreements; the preparation and submission of tax returns; insurance of the property; and the timeous payment of vendors, among other considerations.
  • Aggressive marketing of the finished product to maximise the sales price – including staging, where appropriate, and sound management of the sales process.

In support of the above, YDL has access to hard money finance to supplement investor capital, and has developed a capable team on the ground to negotiate and close transactions.

Political uncertainty and South Africa’s recent downgrade of its investment grade to junk status are reasons to consider whether to shock-proof your portfolio – and build a hedge against the rand – by moving part or all of your foreign investment allowance abroad. If so, call us on 011 465 7356 or email so that we can give you more information about our US flip programme.

Warm regards,