Coastal Land Banking Play (solid case for 3x on capital upside)

Hey guys, Mikkel here,

Two weeks ago, I shared a land-banking opportunity in Northeast Brazil that I recently invested in.

I purchased two coastal lots (sub 100k USD for both), explained why I believe this particular region has considerable room for growth, and invited those of you interested in doing the same to speak with Melissa ([email protected]) 

Well, the response has been tremendous, and over the past couple of weeks, Melissa has been speaking with a steady stream of readers interested in the opportunity, and one thing in particular about the land deal I brought you guys has seemed to capture some serious attention:

The financing aspect.

My partners are allowing members of our community to secure fully titled coastal land with ZERO DOLLARS DOWN and monthly payments starting at just $1,250 USD.

$1,250 per month for a 320-square-metre lot, or $1,500 per month for a 360-square-metre lot.

Both can be purchased outright at a discounted price or financed over 36 months.

Good luck finding an arrangement like that in your home country… let alone in a growing coastal region of one of the founding BRICS economies.

We're not talking about some remote piece of land in the middle of nowhere, with no economic activity or meaningful development taking place around it.

We're talking about coastal land in a Brazilian state attracting billions of dollars in infrastructure, industrial, tourism and technology investment.

A state where international hospitality companies are committing substantial capital, airports are being modernized, major transportation infrastructure is under construction, and some of the world's largest technology companies are establishing a presence to capitalize on the data/cloud center boom. 

Nine Years Of Relationships Have Made This Possible

I've known my Brazilian partners for going on seven years.

Over the last four or five years, we've worked closely together to build high-upside rental opportunities for our community. 

One of the biggest lessons I've learned after more than 25 years of international business and investing is that some of the most interesting opportunities come through relationships.

When you work with people long enough, show you can bring serious investors to the table, and build a reputation for following through on your commitments, doors start to open.

That's why I can bring you opportunities that never make it onto the public market, negotiate terms that wouldn't normally be offered to individual buyers, and invest alongside people whose businesses and reputations I've had years to get to know.

In this particular case, my partners have demonstrated an extraordinary level of confidence in our community.

That is a meaningful commitment on their part.

My partners have enough confidence in the Expat Money & Brazil Beachfront communities, and in the relationship we've built together, that they're willing to let us acquire land with no upfront payment.

They trust that buyers from our community will fulfill our obligations over the next 36 months, just as we always have.

In this community, we say what we are going to do. Full stop.

If you didn’t read the most recent edition of BB, I want to give you a quick, simple breakdown of the investment category this opportunity falls under.

It’s called land banking.  

Land banking is one of the simplest real estate investment strategies to understand.

You purchase land in an area where you believe future growth will make that land more desirable (and thus more valuable), hold it while the surrounding region develops, and eventually sell it at a higher price. That's it.

You're buying land today because you believe somebody else may have a much more valuable use for it tomorrow.

It doesn’t mean land banking is easy money, and it certainly doesn’t mean it is a foolproof way to generate a return on your capital. 

The strategy depends on identifying the right location, buying at a sensible price, understanding what could drive future demand, and having the patience to wait for that demand to materialize.

Some investors get it wrong.

They buy land in areas that don’t develop as they expected, lack the patience to hold it until its value rises sharply enough to their liking, or sometimes get greedy and set a selling price that's too outrageous, so the would-be buyer looks elsewhere.

Land banking investors almost always fall into two categories:

1) Active (intentional about the strategy)

2) Lucky (think about the families who owned land outside cities that eventually expanded toward them).

Obviously, luck isn’t a strategy.

So instead, savvy folks like us study where development is heading, understand what is already being built, and position ourselves before the market has priced in those changes.

We’re making a calculated decision to acquire a finite asset before the surrounding market potentially becomes much more valuable.

That means I need to be comfortable holding it. It also means I need to be confident that the price I'm paying makes sense relative to what is happening in the area.

Why I'm Banking On Brazil's Northeastern Coast

• Becoming a major technology hub, with enormous data centres and global internet infrastructure.
  

• Experiencing strong tourism growth, with millions of visitors every year.
  

• Welcoming major resort developments, including a MASSIVE Club Med project.
  

• Expanding airports to attract more visitors and improve access to coastal destinations.
  

• Building new multi-billion-dollar railway infrastructure to support trade and industry.
  

• Creating business activity and employment through industrial and technology investment.
  

• Seeing more capital flow into its once-overlooked coastal economies.
  

• Benefiting from one of Brazil’s most important ports, with strong ties to the Port of Rotterdam.
  

• Attracting new residential and commercial developments as economic activity expands.
  

As I explained last week, lots in one early development nearby tripled in value in just about 3 years.

Could something similar happen to the land we’re investing in? Absolutely. 

Will it? No one can say.

What I do believe is that well-positioned coastal land has the potential to become more valuable as infrastructure, tourism, and development expand around it. 

Within the larger master parcel where I purchased my two lots, my partners have made two types of property available to our community.

Option 1: Type A Lots

• 320 square metres of fully titled land.

• $0 down, with payments of $1,250 USD per month for 36 months ($45,000 if financed).

• $39,000 USD if purchased outright.

Option 2: Type B Premium Lots

• 360 square metres of fully titled land.

• $0 down, with payments of $1,500 USD per month for 36 months ($54,000 if financed). 

• $44,000 USD if purchased outright.

I personally purchased two Type B Premium lots for cash (I have the liquidity, so I took the discounted price). 

I understand that not everybody can or wants to deploy mid-five-figure capital immediately.

Some investors prefer to preserve their liquidity and spread the purchase price over three years.

Even wealthy investors often choose financing, despite the added cost, because keeping access to their capital can be more advantageous for their personal situation than the savings. 

The Type A lot costs $6,000 more when financed than when purchased outright, while the Type B Premium lot costs $10,000 more.

That's the cost of spreading the purchase price over three years.

Now, buying the land is only half the equation… eventually, you need somebody willing to purchase it.

You have to be willing to think in terms of years, not months, for this to materialize - three, five or ten years are all possibilities (depending on what happens in the surrounding market). 

When the time comes, my partners on the ground have agreed to help market and resell the land.

That same level of assistance will be available to members of our community who purchase within this master parcel.

This strategy depends on experienced local partners who understand the market, know the region, and can connect sellers like us with potential future buyers.

Even with my extensive experience in international real estate and land banking, I wouldn't buy land in a market without a trusted local partner on the ground to help me navigate the future sale. 

You don't necessarily need to know exactly who your eventual buyer will be - you only need a credible reason to believe that future buyers may find the land more desirable than they do today.

The eventual buyer will depend on what the market looks like when the time comes.

Now, before I wrap up this edition of the Brazil Beachfront Newsletter, I want to finish with this: 

This will be the last dedicated newsletter I send promoting this particular land-banking opportunity.

There's still plenty of land available, but my partners have told me that once our community has had a fair opportunity to learn about the investment, speak with Melissa, and decide whether to participate, they intend to retain the remaining land for themselves.

They believe in this coastline's long-term potential. So do I.

While I'm pleased they've made part of their holdings available to our community, I understand their thinking.

If you own strategically positioned coastal land in an area you believe will develop considerably over the next five or ten years, why would you sell all of it today?

You wouldn't.

You'd sell what made sense for your business, and hold onto the rest.

That's why I'm making a point of discussing this opportunity (for a final time) today.

If you're interested, you will have to do so by Friday, October 30th.

After that, this offer will no longer be available to our community. 

Don’t come back to me six months from now, asking to invest in this land. We move fast here, and we won’t look back at opportunities once we have taken them off the table.

I've explained why I invested.

I've shown you the economic developments that interest me.

I've outlined the financing arrangement and the strategy behind the purchase.

And I've explained that you’re only getting access to this sweetheart deal because of the high levels of trust I have built up with my partners.

At this point, it's up to you.

If you're interested, I encourage you to speak with Melissa and investigate whether this opportunity makes sense for your circumstances.

You can contact Melissa directly at [email protected], or visit BrazilBeachfront.com/Contact and follow the simple steps to schedule a call with her. Once you submit your name, email address, and the reason for your call, you will be redirected to a page where you can book time on her calendar.

I have no idea exactly what this coastline will look like ten years from now, but I have seen enough positive signals to understand I want a piece of it. 

Until the 30th of October, I am giving you the opportunity to do the same. 

Speak soon,
Mikkel