Why Foreign Investors are Buying up Miami’s Hottest Real Estate
Why Foreign Investors are Buying up Miami’s Hottest Real EstateWhy Foreign Investors are Buying up Miami’s Hottest Real Estate

Why Foreign Investors are Buying up Miami’s Hottest Real Estate

The South FL real estate Market has seen amazing growth, and foreign investors have played a huge part. Read on to find out what is fueling this growth in Miami’s hottest real estate, who the major players are, and how money laundering factors in for some investors.


Who’s Buying

Foreign investors spent $6.2 billion on residential properties in South Florida last year with Venezuela leading the pack, according to the Miami Association of Realtors.
 
Buyers from Venezuela, Argentina, Brazil and Colombia, and Canada spent the most on homes in Miami-Dade, Broward, Palm Beach and Marin counties, a newly released report shows. Mexican, French and Peruvian investment tied for fifth place. Altogether, investors from those countries accounted for 64 percent of foreign sales in South Florida last year.

As Brazil’s tumultuous economy appears headed for gradual recovery, some Miami condo real estate players say they are seeing a resurgence of interest from residents in the Latin American country.

Shady Investing

Miami’s not-so-secret secret is that it is a safe haven for foreign investments – sometimes shady foreign money. Secretive buyers often purchase expensive homes using opaque legal entities such as offshore companies, trusts and limited liability corporations. Offshore companies are legal as long as the companies declare their assets and pay taxes. But the secrecy that surrounds those companies makes it easy and tempting to break the law, as uncovered by the infamous ‘Panama Papers’ leak from law firm Mossack Fonseca.

The leak shed light on the firm’s creation of shell companies for the rich. Money from people linked to wrongdoing abroad helped to back the multitude of condo towers rising on South Florida’s waterfront and pushing home prices far beyond what most locals can afford.

The U.S. Treasury Department is so concerned about criminals laundering dirty money through Miami-Dade County real estate that in March it started tracking the kind of transaction most vulnerable to manipulation: shell companies buying homes for at least $1 million using cash. Those deals are considered suspicious because a) the real buyers can hide behind shell companies and b) banks aren’t involved in cash transactions, circumventing any checks for money laundering.

In early May, federal police in Brazil launched a money laundering probe linked to the real estate market in Miami.

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