It’s one of the best things about being a real estate investor.

Using financing to buy real estate, you can benefit from a true “money miracle…” Leverage.

Financing gives you leverage. With leverage, you use borrowed money to buy a property. And with the right deal you can 5X…10X… even 20X your money with this strategy.

Using leverage you can own, control, and profit from a large investment with a relatively small amount of your own money invested.

At the same time, using financing, rather than paying 100% in cash, helps you free up capital, allowing you to use your money elsewhere.

Let’s say you lock down a $100,000 condo and put in $10,000 of your own money. Then the price of your hypothetical condo rises in value to $200,000. The $100,000 gain you’ve made equates to a 1,000% return on the $10,000 cash invested.

Or, essentially, you have gotten that condo for free.

I love using leverage. And I get a lot of questions about financing overseas real estate…

Lots of people assume that foreigners cannot get financing abroad and that they must pay cash for a property. This is the case in some places.

In other places, financing opens up all sorts of interesting opportunities.

Financing is what makes the miracle of leverage work, it’s the key to maximizing our returns with your real estate investments.

More on leverage in a moment. First, let’s look at financing in popular destinations across our global beat…

France

The typical French mortgage currently allows a buyer to borrow between 70% to 80% LTV, though some French mortgage brokers have a limit of only 50% for non-European Union buyers. U.K. and other E.U. residents/taxpayers may be able to borrow up to 85%.

Strict Banque de France lending laws state that your total debt (including rents, mortgages, and other regular expenses) cannot exceed more than one-third of your total income. If you are aged over 65, the banks will not include earned income; only passive income or retirement benefits will be considered.

All mortgage interest rates in France are linked to the Euribor (Euro Interbank Offered Rate), which was introduced at the beginning of 1999 along with the European single currency (the euro). French loans can be for between five and 25 years (but, most commonly, 15 or 20 years), depending on your age and the bank you’ve chosen.

At present, rates are typically in the 3% to 3.5% range.

Italy

An Italian mortgage can be granted not just in euro but also in a different currency (such as American dollars or sterling). Current fixed rates are typically around 3.5%.

For foreigners, banks usually allow no more than 50% to 60% LTV according to the valuation report drafted by the appointed surveyor. The minimum a bank will lend you is usually €50,000, but some banks have higher minimums. Unlike France, there is no prepayment penalty.

For people over the age of 60, the maximum loan duration is usually reduced to 15 years. If the applicant is older than 60 years, Italian banks usually require the signature of another (younger) applicant that will be jointly liable.

The instalment of the mortgage, added to other potential ongoing financial obligations, should not exceed 35% of customers’ net income.

Spain

In Spain, foreigners can currently get a mortgage up to 60% or 70% of the value of a property.

You need to open an account in a Spanish bank. In order to open your bank account, you will need a NIE “Número de identificación fiscal para extranjeros” or Foreign Resident’s Tax Number.

It takes about six weeks to close a loan. There is a “cooling-off” period of 10 days, so this increases the timing for getting a mortgage.

If you buy your property for investment purposes you could have a tax incentive to take a loan, as you have to pay a tax on your “net income,” and you are allowed to deduct some charges from your rental income.

Most Spanish lenders require that you have both life insurance and property insurance.

Fixed-rate 20-year mortgages are the most common for foreigners. The standard offering for variable rate mortgages for non-residents is EURIBOR (Euro Interbank Offered Rate) +1%.  For instance, with the 12-month EURIBOR at 2.407% as of March 2025, the applicable interest rate would be approximately 3.407%

For foreigners, the fixed rate is between 2.5% to 3%.

Loans must be fully repaid before you reach 75 years old, so the duration will depend on your age when you apply for the loan.

Portugal

Foreigners can typically get a mortgage of up to 70% of the property’s value in Portugal. Some banks may offer less for non-residents, especially if the property is for investment rather than personal use.

To apply for a mortgage, you’ll first need to open a Portuguese bank account and obtain a NIF (Número de Identificação Fiscal)—your Portuguese tax identification number. This is required for most financial transactions in the country.

The mortgage approval and closing process usually takes four to eight weeks, depending on the bank and whether your documents are in order. Like Spain, Portugal also has a mandatory reflection period before the mortgage can be finalized—generally seven days.

Portuguese banks typically offer fixed or variable-rate mortgages, with terms ranging from 5 to 30 years. Variable-rate mortgages are usually linked to the EURIBOR plus a spread of 1% to 1.5%, depending on your profile and the lender. As of March 2025, with the 12-month EURIBOR at 2.407%, this would bring the interest rate to around 3.4% to 3.9%.

Fixed-rate options are also available, often ranging from 3% to 4% for non-residents.

Like in Spain, banks in Portugal generally require life insurance and property insurance as part of the loan agreement. And mortgages must typically be repaid in full by the time the borrower reaches 75 to 80 years old, which can affect the loan term offered.

If the property is used as a rental or investment, interest payments and related costs may be tax deductible, lowering your overall taxable rental income.

Developer Financing

With some of the special off-market deals I bring to members of RETA, members may get offered exclusive developer financing. This is especially beneficial in countries where it is difficult for foreigners to get mortgages, or if they can, the terms are unattractive.

Walk into a bank in Mexico or Costa Rica, for example, and if you are very lucky, they might lend you 60% and charge you 9% or 10% for the privilege. That’s after they’re done weighing you down with excruciating bureaucratic requirements. Then, and only then, will they decide whether to let you borrow money—they might still refuse.

But, this is where our RETA members-only developer finance comes in…

Developer finance is, as the name suggests, where a developer finances a piece of the real estate you buy from him—he’s the bank.

It’s most commonly offered for pre-construction properties and also in markets where bank finance is extremely difficult to get for foreign buyers and/or prohibitively expensive.

The deals I negotiate exclusively for RETA members may have developer financing as an option.

Here’s how this kind of financing usually works:

Take a pre-construction condo I recommend and that you then lock down. You make a down payment when you sign the contract, usually 20% of the purchase price.

During construction you pay an additional 30% in the form of monthly and balloon payments.

When the condo is finished, you have two options: you can pay the 50% balance in cash, or take up developer finance, which can run for up to 10 years post-delivery of the condo.

When you do this, you can take up the developer finance and rent the condo out to offset costs…while putting your capital to work on another deal. And if the real estate is rising in value at the same time, you’ve gotten more real estate than you could have done with your own funds at the start of the deal. Again, you get to use someone else’s money to finance your gains and to target that capital appreciation.

Reducing Risk

Paying 100% cash on a pre-construction deal looks like it saves money on paper, but it’s not the best way to reduce risk.

Where possible, I always recommend using financing. This allows you to partake in a deal, locking in the potential gains, while minimizing your financial exposure.

It’s important to understand that with developer finance, you typically don’t own the asset until you have paid off the finance in full. The developer doesn’t have to foreclose on you if you stop making your payments, he can simply take the real estate back, and keep the monies you have paid to date. He probably won’t even have to go to court to do it, either.

In some countries, such as Brazil, developers must pay back some of the money you have paid on your condo if you stop making finance payments and they take the unit back…but that’s not the norm. Make sure you understand the terms of your finance deal wherever you buy and do your due diligence.

Those caveats aside, get this right and it can be one of the most profitable ways in your arsenal to finance a purchase.

Seller Financing

Seller financing is where the seller is willing to finance your purchase. You make an offer. If a seller’s home is worth $200,000, you can offer $50,000 now and the balance over 10 years at 5%. Offers like this can work in markets where there aren’t many buyers at that moment in time, and the seller just wants out. I’ve even seen folks make deals where they pay zero interest. To make deals like this you need to fine-tune your negotiating skills.

In this scenario, all, or part, of the purchase price is carried by the owner. Usually, the buyer makes a down payment and then the owner and buyer agree terms on the finance.

They agree an interest rate, the term of the loan, and the monthly payment amounts. In a situation where owners are anxious to sell, that gives you leverage on negotiating good terms.

You’ll need an attorney on board to advise you how best to set this up, to make sure it complies with local regulations, and to protect you as a buyer.

The upsides for you as a buyer are shorter close times—no waiting around for bank approvals or detailed credit reports—and the finance can be tailored to suit your situation.

There are some things to consider: You need to make sure the seller has no liens, loans, or mortgages on the real estate. He needs to pay those off. Otherwise, if the seller doesn’t stay on top of his loans on the home, you could lose it, even if you’re up to date with your finance payments to him. Your local attorney can do this due diligence for you.

Also, think about what happens if the owner sells on the loan to a third party…how will that affect you?

You negotiate the terms one-on-one with the seller. An important consideration here is when you take title. If you take title on signing the deal, you have more protections in the event of a dispute or if you miss payments. (That said, when I’m in the seller’s position, I insist that title is only handed over when final payment is made.)

On the right buy and with the right owner, this can give you an edge in some markets.

Leverage Can Make You Rich

You need to be prudent, but with the right deal you can 5X…10X…even 20X your money using the miracle of leverage.

The right deal is key. I’ve looked at lots of deals that have 100% finance at less than 2% and never recommended them to RETA because the deals didn’t stack up. Don’t buy a bad deal just because of cheap and easy credit.

Let’s look at an old RETA deal from Spain.

North Americans can get mortgages from Spanish banks. Not a possibility in every country on my beat, but in countries where you are able to, it can be the road to those huge profits I’m talking about.

One Sunday afternoon back in 2019 I was reviewing some old recommendations I had made to RETA members to see how they were doing.

I came across a listing for an apartment in La Duquesa on Spain’s Costa del Sol. A two-bed unit listing for €245,000.