So like I said in the last post, I saved up $20K in 2 years. No problem. I knew this would be easy because I did it 2 years ago. Whenever I have $20K in my savings, I always start seriously looking at houses. This time, my location of choice was Cape Town, South Africa. I searched on property24.com because I like their inventory and the interface is easy to use. I filtered my view to only look at the cheapest properties in my favorite area. Luckily, I had a friend from the US who stayed in an apartment complex in a cool part of Cape Town. She said it was safe and a great place to live. That's all I needed to hear to start looking for apartments in the exact same building! Move over girlfriend, I'm your new neighbor! Lol.
Any-who....the apartment was listed for about $50K. I couldn't go to look at it in person because I was thousands of miles away, so I asked my friend to go look at it for me. She took videos and sent them to me. I emailed the listing agent and told them I was interested in purchasing the property. They emailed me back a copy of the contract. I filled out the contract, signed it, and returned it to the listing agent via email.
Next step was to pay the downpayment. If you're a foreign buyer, South Africa's rule is that you have to pay down at least 50% of the purchase price, and then get a mortgage on the other 50%. I tried to open international bank accounts with several banks in Cape Town but I had no luck. All the banks required that I either have a South African ID# or a visa. Of course I had neither. I had 50% of the purchase price, BUT I couldn't get a mortgage. That's when I realized that I would have to pay for this $50K apartment fully in cash.
I went to my bank in the US and made a wire transfer of $20,000 to the real estate company in Cape Town. I was now the official owner of this cute little apartment in Cape Town...well almost. The process was delayed a bit because I had to find ways to get the other $30K. I kept telling the real estate company that my US bank had restrictions of how much money I can send within a short period of time (because of fraud). So the seller just had to wait until my bank allowed me to send another large sum of money. During this time, I was hustling my resources (Google) to find out how I could get this $30K.
After much reading and some browsing, I learned that I could use my credit card.
I had two credit cards: one was already in use, paying off some student loans. The other had a limit of $17K and was barely ever used. I was able to get $15K cash from my credit card at 0% interest for a year. This is called a cash advance. My bank loans me the $15K and I don't have to pay any interest on this loan for one year. However, if one year passes by and I haven't finished paying off the entire $15K, I would be charged about 22% interest per statement period.
Ok, so I saved $20K, borrowed $15K from my credit card, that adds up to $35K. Where did the other $15K come from?
I borrowed it from a trusted family member who knows I'm about my money so they have nothing to worry about.
The Breakdown:
List Price: $50,000
Downpayment: $20,000
Cash Advance: $15,000
Personal Loan: $15,000
Bonus: This property also had a tenant already living there so I was collecting rent right away. The rent is just so tiny when you convert it to US dollars lol. But money is money.
What do you want to know next?
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