Note: To follow is an excerpt of an interview with Dr. Mark Lee Levine, a full professor with the University of Denver, and currently the Director of the Burns School of Real Estate and Construction Management, Daniels College of Business. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/021109.

Mosca: Foreign property ownership of American land is not something new. In fact, it is a practice that dates back to the early 1600’s. Today, foreign buyers are doing their collective best to help keep our real estate industry afloat. They are finding prices here in America generous, as their Euros and their Yen give them more bang for their American bucks. What are the key areas of concern for foreign investors who are considering real estate in the United States?

Levine: When we teach real estate here, we seem to always worry about return on investment and IRR (internal rate of return) calculations. Investments internationally, whether those inbound, as we say coming into the United States, or outbound, where you or I or Dean might go out of the country to invest, certain things come in front of these calculations. For example, when I buy an apartment building in the United States or an office building, personally or for others, we are working out the returns. For investments out of the country, I put about 10 things ahead of those calculations, like is the country stable. If I go invest there, is it legal to do that, can my people get killed, is it unstable, or risky. There are language issues, distance, cultural differences, solvency of the government, etc., many issues that we have to ask first.

Mosca: Isn’t the beauty of it that we have the opportunity to consider these other countries to invest in? Shouldn’t my friends in the REALTOR and CCIM communities be proud that the globe is transacting better because of the efforts of these industry associations?

Levine: You are right on the premise that these countries are seeing that they can gain insight and quick movement to a much more sophisticated level by working with some of these organizations and gaining expertise from the trips or mistakes we’ve made in the learning process. There is no question that many of these groups are being invited by governments or other organizations to come and help train their folks. It is happening because they know that this expertise that the United States has in many of the organizations that you mentioned is there and all they have to do is request it and it will be theirs.

Mosca: Your book, International Real Estate, Global Real Estate, 3rd Edition, is an excellent source for that information. Why did you decide to write it?

Levine: We developed a template to compare factors in different countries and additional issues so an investor can have a reasonable basis when considering investments inbound or outbound. Different experts for each country author each chapter. First of all, I ask the question are you interested in going outside? Two, why? Three, how do you make the decision which country? There are a diverse number of answers or responses to that. Some of it is diversification, some of it is opportunity, and some of it says that we can get more mileage out of it, more opportunity because it’s a neighbor like Mexico or Canada. There are a lot of issues that need to be considered and we include those in the book.

Mosca: (a caller, Dave Wilson, from Iowa). Large commercial real estate investors basically need a large amount of capital to acquire and maintain a global portfolio. What about the small investor that wants to invest overseas? What are you seeing as opportunities for small commercial real estate investors or companies looking overseas to invest?

Levine: Big and small companies alike have to worry about the point you mentioned – capital. In some countries you cannot get financing so you have to come in with capital and lenders that will go along with that investment outside the country. Think about it. It's hard enough for me to get a loan in California if I live in Colorado, but how do I get a loan if I want to be in France? Many times the small investors have to be small. It might be a small syndication, a pooling together of funds hopefully properly done to invest in these countries. I can think of a lot of companies that made some mistakes going into some countries and had to retreat. They may have had the wherewithal financially but found themselves retreating because they didn’t consider the other factors we discussed earlier. Capital is important but I think some of these other issues are equally or more important.

Mosca: Can you talk to us about your Web site, the Global Real Estate Project and how it relates to the book and how your students and contacts help keep it up to date with information?

Levine: The Web site has thousands of pages so it is much more unique than the book. It features about 110 countries. It’s a free service from the University of Denver at our Daniels College in the Burns School. Our graduate students and others keep it up-to-date. It allows for comparative analysis of all the things we have been talking about. We have the CIA World Fact book and a number of other sources that are all noted. It is a central site for purposes of real estate and construction management issues, but broader points that relate to it are also on the site. Even if you’re traveling for fun, you can get lots of good information free.

Mosca: What is your golden nugget for today?

Levine: Investing in the United States with those in the United States have certain criteria that we use and may be different from those from foreign investors coming into the United States. If we fail to recognize the differences we will be off on the wrong foot. Use the Web site and the book, and benefit.