June 25, 2025 | How to Finance Foreign Real Estate

Geographic diversification — that is, buying and/or storing assets overseas — is a good way to hedge against the increasingly real possibility that the US government will go a little crazy when the fiat currency experiment fails.

But it’s not simple. Over the years, I’ve come close to buying real estate in Costa Rica and Mexico. But when confronted with the uncertainties of language, law, and finance, I’ve given up and stayed mostly local.

That’s apparently a common dilemma for Americans, and Nestmann Group, a consultancy that helps with things like second passports and cross-border investing, just posted a “how-to” article on the financing part of this subject. Here’s an excerpt:

How to Finance Foreign Real Estate as an American

(Nestmann) – Buying real estate overseas can be a smart way to diversify – not just your assets, but your lifestyle and legacy, too. But if you’re hoping to finance that purchase as an American, you’ll quickly learn the rules are different. Sometimes wildly so.

Some countries make it easy. Others, not so much. The regulatory headache known as the Foreign Account Tax Compliance Act (FATCA) makes Americans a compliance risk few institutions want to take on.

But if you know where to look – and how to structure things properly – you still have options.

That’s why, in this article, we’ll walk through how to finance foreign real estate as an American – with practical, real-world ways our clients are doing it today. We’ll cover everything from developer financing to cross-border collateral strategies and more.

Why Consider Foreign Real Estate?

But before we discuss the how, let’s first answer the why.

Foreign real estate is a great answer to the question of “What can I own that doesn’t depend on the US financial system?”

Why? It checks the fundamental boxes:

• It’s a hard asset in a foreign jurisdiction, immune to US bank failures and court orders.
• It can generate income – or simply preserve value – in currencies not tied to the US dollar (which has lost nearly 10% of its value since January 2025, according to the DXY – an index that measures the dollar’s performance against a basket of other currencies).
• It often comes with additional benefits, including residency rights (sometimes).

And unlike gold or crypto, it’s something you can live in, rent out, or pass on to your heirs as part of a well-structured legacy plan.

Read more: Investing in Overseas Property for Americans Afraid of US Market Chaos

Why Finance Foreign Real Estate?

Generally speaking, Americans buying foreign real estate with cash tend to have the biggest advantage at the negotiation table. But that doesn’t mean you should always buy with cash – or that, if you can’t, foreign real estate won’t work for you.

Financing a foreign property can help you keep more capital working elsewhere – whether that’s in a business, other investments, or simply building liquidity. In some cases, it may offer tax planning advantages.

Benefits of financing instead of paying cash:

• Preserves liquidity for other investments or personal needs.
• May unlock local tax deductions or planning advantages.
• Reduces upfront capital exposure to currency fluctuations.

The key is knowing which financing options are available to you and structuring the deal in a way that supports your bigger plan. Because done right, financing foreign property is not just about leverage – it’s about flexibility.

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Let us know what you’re hoping to accomplish and we’ll give you some options to help you reach that, and how we can help.

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Developer Financing vs. Open Market Lending

When it comes to financing foreign real estate, you’ll usually see two main paths:

• Developer-backed financing, offered directly by the seller.
• Open market lending, through local or international banks.

Each comes with trade-offs. Some obvious, others not so much.

Developer Financing: Convenient, but Watch the Terms

If you’re buying new construction or resort property, the developer might offer financing in-house. These deals often sound appealing: Low down payments. No income checks. No credit review. Fast approval.

Sometimes, all they ask for is a deposit check and a copy of your passport.

But there’s a reason it’s easy:

• Interest rates are often higher than local banks.
• Property values may be inflated to bake in financing “costs.”
• Balloon payments or resale restrictions are common.
• Some developers keep a lien that makes it hard to refinance later.

In most cases, developer financing isn’t a long-term solution – it’s a bridge.

Still, that doesn’t mean it’s always a bad idea. In countries where banks won’t lend to foreigners at all, developer financing may be your only practical path in. The key is knowing what you’re giving up in exchange for the convenience.

CASE STUDY:

A CLOSER LOOK AT DEVELOPER FINANCING

Read the rest (there’s a lot) here.

John Rubino June 25th, 2025

Posted In: John Rubino Substack

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