Quora Answer: How Do I Turn $1 Million Worth of Real Estate in an Emerging Economy into $10 Million in 7 Years?

The following is my answer to a Quora question: “Assuming I am going to get $1 million worth of residential real estate in the capital city of an emerging country, how can I turn it into $10 million worth within the next 7 years?”

If this emerging economy is in a growth region such as East Asia, or Southeast Asia, it is entirely possible.  There is a massive influx of the rural population into the city and that is driving growth.  Depending on how the city grows and then, if you can navigate the bureaucratic and legislative web, it is achievable.  You will, however, be undertaking massive risk.

If it is not in a growth region, then it is highly unlikely.  If you intend to hold on to $10 million worth of real estate, that is also unlikely since you are looking at a 1,000% ROI in seven years.  But if you are looking at taking a series of loans, leveraging what you have, positioning them favourably in the city’s growth plan, and are willing to let go of properties for strategic reasons, it can be done.  You should run your investments through your own property development company for taxation and other reasons.

One of the areas of real estate you should consider investing in, is not residential, but commercial.  In growing cities in the developing world, there is an acute shortage of suitable warehousing, especially cold stores near the ports and airports.  They are not as costly to build and maintain as high end residential estate, but they earn you more per square metre, due to lower maintenance cost, and higher demand.