The French CONNECTION
America still holds a special place in foreign investors' minds. One Frenchman is bringing the American dream of real estate ownership to the French middle class.
REAL ESTATE by Jean Gruss | Editor/Lee-Collier
Guy Briolet had never set foot in the U.S. until three years ago.
But Briolet, 52, an anthropologist who owns a vineyard in France that produces about 1,200 bottles a year, was recuperating from a series of illnesses when a friend recommended the sunshine and warmth of Florida.
When he visited Lee and Charlotte counties for the first time in 2005, he marveled at how prices were so affordable for waterfront lots. A big reason for that, of course, was that the euro currency was so strong relative to the dollar.
So Briolet purchased a lot in Tropical Gulf Acres in Charlotte County and doubled his money when he sold it to an acquaintance in France. Briolet was hooked on real estate investing. Now, he has expanded his current portfolio to 15 waterfront lots as prices have declined and he travels to the U.S. every two months to check on his investments. Sometimes, he brings clients who want to see exactly what they're buying.
Briolet is exactly the kind of investor that residential real estate brokers on the Gulf Coast are hoping to see more of as Americans withdraw from the market. Although the U.S. dollar has regained some strength, foreigners with strong currencies such as the euro or the British pound still consider U.S. real estate prices to be reasonable. The majority of foreign buyers are German and British, but real estate brokers are starting to see more investors from other countries such as France.
Briolet tells his buyers they will make money from their real estate investments over the long haul. "I tell them they can double the value of the land in five years, but we don't know [for sure]," he says.
The American dream of owning real estate in the U.S. is alive and well. "Europeans live it, too," Briolet says. A strong foreign exchange is the "cherry on the cake," he says.
Still, Europeans haven't been immune from the turmoil in the financial markets, which have also slammed Europe despite its tighter banking regulations. Briolet says his lot sales have slowed considerably since summer. "People got scared and waited for the elections," he says. Now, they want to be reassured that the U.S. will recover and they won't invest until they're confident that will happen.
A skilled anthropologist from the Loire Valley, Briolet traveled to Florida three years ago for the first time to recuperate in the sunshine. Briolet is also a winemaker, and Castel Briolet produces 500 to 1,200 bottles of red wine, depending on the success of the season. He grows his grapes organically, with no pesticides or fungicides.
Briolet says he was smitten with the climate and the friendliness of people in Southwest Florida. With the euro climbing against the U.S. dollar, the area was on sale, too.
He purchased a waterfront lot in Punta Gorda and doubled his money selling it to an acquaintance in France. With the profits from that first lot sale, he bought a second one in Port Charlotte and made a tidy profit on that one, also.
Then, Briolet sold an apartment he owned in the city of Nantes, a city on the Loire River near the Atlantic Ocean. He used the proceeds to buy more waterfront lots in Lee and Charlotte counties with the help of Coldwell Banker brokers.
"The French love America," Briolet says.
After his initial success, he sold a family house in Brittany, a French region on the Atlantic coast. He invested the proceeds in more waterfront lots, eventually owning as many as 20. Every two months, Briolet travels to the Gulf Coast in search of good deals. "It's a little paradise," he says.
Owning a piece of America
Briolet relies on word-of-mouth to sell lots to individuals and families. Some buyers want to inspect the property before they buy. Briolet persuaded one woman from Nice in October to invest in Florida rather than Morocco. Instead of buying one lot she purchased three after traveling here. Still, half of investors don't look at the property before they buy, relying on Briolet to arrange all the details.
Briolet's buyers aren't large sophisticated investors. Most have about $30,000 to $60,000 to invest and choose to buy real estate to diversify their investments. A few are even considering living in the U.S. Investors range in age from 25 to 65 and many are still working.
Until this summer, the euro currency was trading at $1.60, a huge premium considering it used to trade at or below par just a few years ago. The euro recently traded at $1.29. If a French buyer purchases a waterfront lot today and the dollar continues to gain strength, any appreciation in the lot gets a boost from the rising value of the dollar. "If I buy a waterfront lot for $15,000, I can resell it for double [in five years] without worry," Briolet says.
Sales were brisk through the summer, but as the U.S. financial crisis spread to Europe, French buyers became more cautious. Lately, Briolet says he's had a difficult time selling the 15 lots in his inventory. Buyers tell him the future is uncertain and they'd rather hold onto their cash. "Right now, nothing's selling," he says.
But Briolet counters that this is the best time to buy, especially as prices in the U.S. have tumbled. He says he's become an expert at navigating real estate Web sites, including those maintained by each county's property appraiser. He recently saw that a lot in north Cape Coral recently sold for $13,000, down from the $156,000 it sold for in 2005.
Foreclosures are opportunities
Despite slowing sales, Briolet is planning to expand his business to include homes. So far, he's only bought and sold waterfront lots. But home prices have fallen so steeply that deals are starting to look too good to pass up.
Briolet is establishing a company called Florid'Lands and he's working on setting up a sales network in France. He's considering advertising lots on the Gulf Coast in Le Point, a Newsweek-style weekly magazine in France.
One of the challenges Briolet faces is obtaining financing to purchase homes. U.S. banks have halted any speculative purchases and they haven't been receptive to Briolet.
But Briolet is undeterred. He's invested his life savings in his Florida venture. He's confident that buyers will jump off the sidelines once the financial markets stabilize. And the U.S. is probably the safest place to invest today. "I can't imagine that the most powerful nation in the world would crumble," he says.
Industry. Real estate
Key. Europeans are a fertile market for American real-estate sellers.