Fred Checks In From Brazil

The US is a great country thanks to its constitution, political system,
universities, institutions, and so on. There are problems but who doesn't?
When I say I would be better in Brazil, I'm talking about my financial
situation, my own goals. I explain: 

I left Brazil in 1994. By that time I had almost $1 million dollars made out
of the construction of 4 high-rise built from 1985 to 1991. Each building
had about 40 condos, most 100% financed. The profit margin was 1 for each 4
condos built. The demand for homes in Brazil is by far above the offer. From
1992 up to 2005 loans for construction were basically inexistent. I decided
to move to the USA motivated by a builder I met in Florida when I came on
vacation with my wife. By that time new construction was flourishing in
Florida. I would have had some difficulties in Brazil to find loans and to
sell, but I still would be able to build small buildings, one after the
other, with my own money. I would not move as fast as I would like but I
would not lose. Property prices in Brazil never go backward. In 2005 new
construction picked up again but I was too far away building homes in
Florida. By that time, I learned, most lenders started financing
construction and mortgages in Brazil. I would be capitalized to take
advantage of it. Instead, as I said, I was building homes in Florida. When
the crisis began I was caught with several homes for sale. I was unable to
sell most of them. Prices dropped from $200k to less than $100k. So, you can
figure out. 

As a matter of fact, even before the crisis, I never made money as in
Brazil. This is because there are thousands of builders all over the place
in the US and too much regulation. The profit margin is much less than in
Brazil. I was really surprised to learn how low it was. It took me some time
to realize. If you work with loans a small profit margin may represent big
risk if take you longer than expected to sell. I didn't realize for instance
that big construction companies, like Lennar, mostly use equity from the
shareholders. This is a lot different than a small business like mine. On
this aspect, America is much more for big businesses. 

I would like to restart my construction business in Brazil. However, I need
investors because I no longer have my equity. Investor would make a heck of
money with low risk but I didn't find one yet. I know there are some
investors from the US investing in real estate in Brazil. One of them is the
mega investor Samuel Zell. As far as I learned, he is happy as never. Just
search the Internet on his name to check.

On the energy business I can give you a real example. I am right now bidding
on a small job for the county. The job is to replacing lights in a public
fitness center for energy savings. The products must conform to Buy America
Act. The price of one of the specified LED is $150 each, made in USA. I
could have the same from China for $30 but it would not be acceptable. Local
manufacturers have distributors and representatives on an established
network to distribute their products. Therefore, I make nothing by selling
their products.  

It is the same with LED streetlights. Most cities in the US are considering
LED for saving energy. The federal government is funding them for
retrofitting. There are just a few manufacturers of LED in the US. Most
products are not that good mainly because they just started. I found an
excellent manufacturer in China established since 1994; a company with 850
workers and 50 engineers. Great product, better then any local product I
have seen, top technology, low price, but it is not UL certified, and it is
not made here. So, engineers will not specify and nobody will buy. 

I also started, about one year ago, a vitamin and sport nutrition business.
Best product for prostate. I take myself and my doctor takes as well. As a
matter of fact I have several doctors as clients. However I sell just
through the Internet. As you may know to sell through the Internet is not
that easy as it seems to be. So sales are just incipient. I believe those
are great products for exportation provided I have the right contacts. I
have sold some to Australia, Romania and UK through the Internet.

Sorry for the long paragraphs. I hope I was able to convey the message. 

Regards,


Fred

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