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He Made 800 Times His Money... And He's Buying AgainBy
Thursday, August 1, 2013
"Do you still have that first apartment you bought here in London in the late 1970s?" I asked my friend Peter Churchouse over dinner in London on Saturday night.
"No, we sold it about five years ago," he said.
In other words, he sold at the top of the global real estate bubble... He had perfect timing.
"So what are you doing in London?" I asked him.
"We're here buying back in," he said.
To me, Peter is a legend in global real estate investing. He's bought and sold property all over the planet.
His main focus has been Asia. But when he sold his London apartment five years ago, the annual rent he was earning from it was more than what he paid for it.
The story gets even better... Peter bought that place with just a 10% down payment... So the return on his initial investment must have been out of this world. I asked him if he knew what the return number was.
"We made about 800 times our initial investment," he said.
Peter and I were both in London last week. I wanted to hear what he was up to these days.
We met for drinks at my hotel, the Royal Horseguards. (Funny name... but the hotel was fantastic. If you are a tourist in London, stay here!) We then had dinner around the corner from the hotel at Boyd's Brasserie (another great find... a rare underpriced restaurant in London).
I was surprised to hear that Peter is buying again... After all, property prices in London are as high as anywhere in the world. Russian and Chinese billionaires are paying upwards of $100 million – for an apartment.
Doesn't that have to be some kind of bubble? What kind of apartment could be worth that kind of money?
It turns out, Peter is actually buying apartments in London...
He explained why over dinner: Many wealthy foreigners want to get their money OUT of their home countries, and property in London is their top choice. Peter doesn't see this trend going away.
Yes, he's fully aware that prices are as high as anywhere in the world... and he's OK with that.
"With all due respect to New York, London is the world's money capital," Peter said. "And foreign money comes here. It's easy to buy real estate here as a foreigner. People are scared away from the U.S. because the real estate taxes are complicated."
Having spent a few days here in London, I have to agree about the "big money" coming here... I've never seen so many Ferraris, Bentleys, and Bugattis in my life.
Peter is sticking to buying quality apartments in more upscale areas.
London has been an incredibly strong property market... Prices are actually at new highs. The city shook off the global property-price bust better than just about anywhere.
Peter doesn't see London's attractiveness to foreigners changing any time soon. So he's buying.
Remember, Peter made 800 times his initial investment on his first purchase in London. He is one of the best real estate investors on the planet. And now he's buying again.
If you're interested in non-U.S. real estate, London apartments may be a good bet – at least according to one of the world's best real estate investors...
Good investing,
Steve
Further Reading:
"In his lifetime," Steve writes, "Peter has likely seen more great investment opportunities than just about anyone else." And he's fired up about one in particular. According to Peter, two to three years from now, "today's buyer will be sitting pretty." Read Steve's full report here: A "Once in TWO Generations" Real Estate Opportunity.
Steve's relationship with Peter – his "hero" and "one of the best investors in Asia" – is a great example of the "real" secret to Steve's success. Read all about it right here.
Market NotesAN AMAZING BULL MARKET IN EXPENSIVE CLOTHES Today's chart displays two big ideas. One idea tells us a lot about the American consumer. The other tells us a lot about the stock market.
Anyone who plays sports, watches sports, or has children who do, is familiar with Under Armour (UA). Under Armour sells branded athletic clothing, shoes, and dozens of other "sporting" products. These products are not cheap. If you want to blow $150 on a t-shirt and a pair of pants, head to an Under Armour store.
As we've shown in previous Market Notes, the American consumer is alive and well. And he's making Under Armour one of America's fastest-growing companies. Sales growth is over 20% annually. And the stock has climbed from $20 to $67 in the past three years. Shares just struck an all-time high.
This huge price rise reinforces our stance that the American consumer is a lot stronger than the pessimists would have you believe. Also, Under Armour's valuation, at an expensive 37 times earnings, is proof that investors are willing to pay big for solid growth stories.
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