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Foreign buyers gobbling up Tampa Bay properties

Drs. Joana Machry and Geraldo Ramos of Brazil stand with their children, Nicholas and Victor, in front of their Pass-a-Grille home. The couple also have a condo in downtown St. Petersburg.
Drs. Joana Machry and Geraldo Ramos of Brazil stand with their children, Nicholas and Victor, in front of their Pass-a-Grille home. The couple also have a condo in downtown St. Petersburg.
Published Jan. 11, 2015

When they moved to the Tampa Bay area six years ago, Brazilian-born physicians Joana Machry and Geraldo Ramos leased a two-bedroom condo in downtown St. Petersburg.

As their family grew, they decided in 2011 to buy a larger condo, also downtown. Then in 2013, they bought a Pass-a-Grille beach house that they rent out when they and their two boys aren't using it as a weekend getaway.

Both places have shot up in value, confirming the couple's instincts that the bay area would be a good place to live, work and also make some smart real estate plays.

"We're very happy," said Machry, a pediatrician. "If renting goes right, we'd certainly continue with our investments."

Machry and Ramos have joined the thousands from other countries who have made Florida and Tampa Bay among the nation's most popular places for foreign home buyers.

No other state comes close to Florida in the dollar value of international residential sales. For the 12 months that ended in June, foreign buyers snapped up nearly $8 billion worth of Florida homes and condos — a 24 percent increase from the same period a year earlier and 17 percent of the U.S. total.

And within Florida, Tampa Bay has jumped into the lead as the favorite destination of international buyers, most of whom want to be near the water and use their property as a second home, a rental or both. Tied with Orlando, Tampa Bay accounted for 11 percent of all sales to non-U.S. residents, exceeding even Miami.

Not surprisingly, Canadians make up the bay area's biggest group of foreign buyers, with 36 percent of sales. Brits are second at 8 percent.

"Someone from the U.K. sees this place as a huge value for the money, especially since the pound sterling is so strong," said Rebecca Malowany, a Smith & Associates agent.

"They come here and go, 'God, this place is so cheap and the cost of living is so much less.' So it makes sense for them, especially if they are looking for a larger home, because they are not going to find it for the money in Miami."

Last year, Malowany had a British client who bought two triplexes in St. Petersburg's Old Northeast as investments. Each cost in the mid $300,000s, a relative bargain compared with South Florida prices.

Another new Tampa Bay home­owner is Denis Keenan, who has an automotive software business in Oxford, England. Like many other foreigners who eventually buy in Florida, his family had been frequent visitors to the state, in their case splitting vacations between Orlando and the Clearwater beaches.

The Keenans first bought a house in Orlando but decided to sell it when their kids grew less enamored of theme parks. They spent 2 1/2 years scouring Florida's west coast for a relatively modern waterfront home that wouldn't require a lot of maintenance.

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Working with Donna Harper, a Coldwell Banker agent, "I think we searched every property in our price range," Keenan said by phone from England. "We went as far south as Sarasota but it wasn't welcoming as Clearwater felt to us. Yes, it can be busy in peak season, but we like the feel of the place."

Last year they found it: a $1.25 million pool home with a dock on the Intracoastal Waterway. "It needed some work," Keenan said, but "we've done all that and we're content and happy."

That wasn't always true. The Keenans found the U.S. home-buying process far more complicated and, to them, nonsensical, than that in England. They were surprised that inspections and appraisals here are done separately. They were shocked that liens attach to the property, not to the person who incurred the debt.

And like other foreign buyers who need financing, they discovered that many U.S. banks don't want to lend to so-called nonresident aliens.

"We were let down very badly by one bank that withdrew a loan offer, which actually cost us a lot of money," Keenan said. "We were very close to abandoning the whole thing."

Then he heard about C1 Financial, a newly public St. Petersburg-based bank. "The minute we spoke to them everything became clear," Keenan said, "and the whole process was done in less than a week."

C1 CEO Trevor Burgess said the bank realized there was a "really great" potential market in nonresidents who wanted second homes but couldn't get financing. In the past year, C1 has made at least 30 loans to foreigners, generally requiring 35 percent down, compared with 20 percent for U.S. citizens, and charging slightly higher interest to compensate for the risk of lending to borrowers who live in other countries.

"Probably the most common is Canadian, though we have seen Brazilians, and the number of people from the U.K. is quite high," Burgess said.

Because it can be so hard to arrange financing, the National Association of Realtors found that only 15 percent of foreign home buyers in Florida get a mortgage. Put another way: About 85 percent pay cash.

Cash indeed has been king in what is perhaps Tampa Bay's most valuable concentration of foreign-owned single-family homes — a half-mile stretch of Oceanview Drive on Tierra Verde in southern Pinellas County.

Between 2008 and 2011, Povalia Inc. — a French company whose president also heads a wine-importing business — bought three mansions on Oceanview for a total of $13.5 million in cash.

And last year, a British lawyer and his wife who had vacationed in the bay area paid $3 million cash for an Oceanview estate on nearly an acre abutting Fort De Soto Park.

"They just really enjoyed Tierra Verde because it's a little off the beaten path yet so close to St. Pete and all the nightlife and restaurants," said Joy Rogers, a Future Home Realty agent who sold the 7,000-square-foot gulffront mansion.

Of course, most Florida homes and condos purchased by foreigners are far smaller and go for much less — an average of $300,600. Canadians spend the least, $260,800 on average, while Brazilians spend the most, $409,600, according to the Realtors association.

Since 2012, though, the percentage of Brazilian buyers in Florida has dropped from 9 percent to 6 percent, largely due to their country's economic slowdown and the weakening of the Brazilian real. And most Brazilians never get past South Florida and Orlando.

Machry and Ramos, the Brazilian-born doctors, initially went to Miami, where he did his training in cardiology and she did hers in pediatrics. They decided the city was too chaotic to be a permanent home but they wanted to stay in Florida.

"The population he cares for is very old and mine is very young so we had trouble finding a place where we both could work," Machry said.

The solution: Tampa Bay, with a large children's hospital for her and plenty of seniors for him.

But the Brazilian community is small, and Machry predicts it will stay that way without better air service. Although Copa Airlines links Tampa to seven Brazilian cities, it currently flies only four days a week and requires a change of planes in Panama.

"I'm sure if they put a flight (to Brazil) in here there would be a lot more people coming because the area is clearly growing and has a lot more attractions nowadays," Machry said. "Now they don't think it is good to invest money in because they don't know this area."

Machry and Ramos are unusual, not only because they're among the few Brazilians in the area; they're also among the relatively few foreigners of any nationality with condos in downtown St. Petersburg, the area's hottest condo market. Realtors say most of the sales are to current residents, especially empty nesters wanting to downsize.

"The locals that are here and have their finger a little tighter on the pulse can jump faster," said Tyler Jones, a Re/Max Metro agent. "There's just so little inventory and it's very difficult unless the international buyer is here and ready to make an offer."

Like many other real estate agents, Jones uses Skype and video conferencing to keep in touch with international clients. Most big real estate firms are also part of networks like Luxury Portfolio International that showcase high-end properties. And both the Pinellas Realtor Organization and the Greater Tampa Association of Realtors have committees dedicated to spreading the word that the bay area is a good place for foreigners to invest.

Judging from the diverse languages along St. Petersburg's Beach Drive, Coldwell Banker agent Tom Hallis thinks the marketing efforts are paying off.

"You hear Russian out there, you here French out there, you hear German so we're getting an awful lot of pedestrian traffic that at some point or other will be part of the purchase process. My goodness, it feels like 50 percent of the people along there are from other than the U.S."

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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