David Kafka: Benefits of Investing Internationally

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David Kafka, founder of Caribbean Capital Group, has had a great journey leading up to helping people place investments internationally. Originally an entrepreneur founding a landscaping company in South Carolina, David also served as a Firefighter/Engineer for his local fire department. He looked up and wanted to find some opportunities to live, work, and invest in other countries. His research led him to Belize. Currently he is a broker/owner of a real estate franchise in Belize and works with investors. Because of its' proximity to the United States, is an English speaking company, has favorable tax rates, has a solid economy, and does not have restrictions on foreign land ownership, David shares with us why people would want to consider looking abroad to diversify their real estate investment portfolio.

In this podcast hosted by Mike Swenson, we discussed:

• Exploring more investment opportunities outside the stock market
• David's belief that investing in Belize is "international investing on training wheels" because it aligns closely with investing in the US compared to other countries
• Belize has no regulations on foreign land ownership
• Investing internationally can be difficult because different languages can create challenges. Because Belize is English speaking, there is no language discrepancy because their real estate contract are written in English
• Understanding what your investors want to do and how much time they want to spend managing their investments is important.
• Busy professionals don’t have time to figure out what to do with the chocolate farms, which is why someone like David is so helpful being "boots on the ground" in the country managing the investment for the investors.
• David adds value, helps to select good investments, and manage the asset of the property on behalf of busy professionals.
• Active investors want everything on their hands while passive investors only want updates and don’t have an impact on the strategy and execution.
• It's very important to earn the trust of a passive investor.
• You need to talk with your active and passive investors in different ways.
• If you do a good job placing their money they're going to trust you to do that again and again.

Timestamps:
0:00 - Intro to David’s Career
2:16 – Getting Into Real Estate
5:00 – About Belize
7:35 – Helping Investors With Opportunities in Belize
12:28 – David’s Investor List
14:21 –Active vs. Passive Investor
15:50 – Chocolate Farm Investment
21:46 – Process of Raising Capital
26:39 - Being Good Stewards of Money
28:03 - How to Find David

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https://www.linkedin.com/in/thedavidk...

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Full transcript here:

Mike Swenson 

Welcome everybody to another episode of The REL Freedom Podcast where we talk about building wealth, gaining time and financial freedom through different opportunities in real estate. And what I really love about the podcast is highlighting different stories, different people doing different things. We talk a lot about larger scale syndicators that have 1000s and 1000s of units. And then we interview people that talk about goal setting and taking a holistic approach to goals. And so I love the diversity of topics that we cover and highlighting different people in different areas.

Mike Swenson 

And today is really cool, because we're going to talk about what it's like investing in Belize. And we haven't talked a lot about international opportunities. And so today, we've got David Kafka here. And David is from South Carolina, and has worked his way down to Belize, and has started Caribbean Capital Group and is helping generate interest and obviously investment money investing in Belize, and we'll talk about why Belize might be a good opportunity to invest in that's the cool part of this podcast is we get a chance to highlight these cool stories, people doing different things, and really, hopefully open up your mind to different ideas, following your passion.

Mike Swenson 

And also understanding that it's not location specific, you can go somewhere and do something different, and have a unique niche. So prior to coming down to Belize, David was the founder and manager of supergreen Inc, a successful landscaping company in Charleston, South Carolina, and spent 12 years serving his community as a firefighter and engineer for the Mount Pleasant, South Carolina fire department moved down to Belize, and as the broker owner for REMAX franchise there. And now you've been been down there for 10 years, and doing some really cool things. So we'll dig into that. So David, so excited to have you on the show.

David Kafka 

Yeah, Mike, thanks for having me, buddy.

Mike Swenson 

Why don't you just talk a little bit, in your own words here of how your story came to be getting into real estate and then getting down to Belize. And we'll go from there. Yeah,

David Kafka 

I, I started out, like you said, as a fireman, and, you know, Fireman always has to work a second job. And so I started landscaping on the side. And it came to the point where I had to make a decision. And I just kind of got tired of the politics, I loved the job. So I wanted to just kind of have a little more freedom of time. And so I ended up making a tough decision of retiring from the fire service and, and did the landscaping full time and it took off. But then I had some issues with you know, I bought a property where I had my company, and they shut me down for no landscaping and no handicap parking, and nobody around me had it. So I was kind of tired of big business, you know, that are big government that kind of controls everything. And we were talking one day and and I said, Man, I'm gonna go look outside of the US and see, you know, where I can go. And I stumbled on a little country called beliefs. And honestly, I picked Belize because it was English speaking because I'm too dumb to learn Spanish. So that was in probably 2004 2005.

David Kafka 

And then I moved to Belize in 2010. So next week is my 13 year anniversary. And I'm a Belize citizen, I'm still a US citizen. And it's just been a great ride. I love it. The people are awesome. You fall in love with the people, the food, the culture, you know, it's kind of like Manyana, right, slowing down. But it's English speaking. And so all my contracts are in English, everything's in English. So you don't have to struggle about reading menus, things like that. You know, the negative is, you know, I sold everything in 2008. And we know what happened in 2008. So I got pennies on the dollar, but I knew I was going to step into real estate. And I just wanted to help people. Because I saw Belize has no regulations for real estate. And I saw a lot of crooks making money and taking advantage of people so I thought, hey, if somebody with ethics can do it, or you know, can help. I'm sure I can make a living doing it, you know, and so that's kind of what led me down the real estate path.

Mike Swenson 

Highlights first you know, you mentioned English speaking. What are some other things that people who who don't? know much about Belize, what do they what do they need to know about the country?

David Kafka 

Yeah, so it's probably about the size of Connecticut, very small country, we have a 425,000 people. We're on the Caribbean Sea, the very first T shirt I ever bought in Belize was where the hell is Belize. And nobody knew anything about Belize. Now, they don't even sell that shirt no more. But it's in the Caribbean, just around Mexico and Guatemala, and we're in part of Central America are we're part of the British Commonwealth. So the laws are very much like North America, Canada and the US. It's full title ownership, English speaking contracts are in English.

David Kafka 

So if you bought something in Mexico, which I'm not knocking it, it's just all the contracts are in Spanish, but it has an English translation. But if something goes to court, they're going to fall back on the Spanish translation, because that's the original language. So we call Belize international investing on training wheels, because it's so much like investing in the US or North America, if you will. But it is outside of you know, the US, but it's a two hour flight from Dallas. You guys are in Minnesota, we have direct flights for most of the year. Straight from from there. California, Seattle. Just there's so many different flights, we've tripled in flights over the last 10 years. And airfare coming to Belize.

Mike Swenson 

Yep. Interesting that you talk about just the the English piece with the contracts. Because, you know, as as an agent, there's discrepancy on on contracts with English speakers as their primary language, right? You write something in there, and you're not very clear in how you put that together. And so that's something that you know, every now and then you have the broker tap you on the shoulder and say, Hey, let's write this this way instead, because you can make it more clear. Well, yeah, obviously, if you're going back and forth between two different languages, there's a big difference there. And so we've got contract disputes on English, in English. And so yeah, even even doing that in a different language creates some challenges. So that makes a lot of sense. So you now are working on helping investors pair up their money with properties in Belize, and opportunities in Belize? And so when did you really start doing that piece of the puzzle? Was that right out of the gate? Or did you wait a little while before you started talking about the investment side?

David Kafka 

Yeah, I really, you know, I bought property. I knew what equity was in the States, but I really didn't know what it was right. I guess I was lucky, because I never lost money. Except when I sold my final house in the States. In a way, you know, that went and foreclosure, but all my investment properties, my commercial property, all that we made money on, just because of the timing, the location and all that. It wasn't in. So when I moved to Belize, I started out as an assistant. Then I moved up to an agent after a year. And within a couple of years, I was the top, you know, one of the top, you know, I guess 25 agents in the Caribbean and had the opportunity to buy my franchise.

David Kafka 

So when I bought the franchise, I went to the our four convention in Vegas, and met my mentors. And, you know, started listening to their podcast and and, you know, then heard this guy called Robert Kiyosaki who I never really knew who he was, and, and, you know, like so many others read that purple book. But it wasn't Rich Dad, Poor Dad that changed my life. It was more of Cashflow Quadrant, and I saw that I was always an S. You know, I was an E in the fire department, always a SS self employed, but I was never a business owner. And I wanted to be a business owner. I like having freedom of time, and join the mentoring club. And I thought it was going to be super easy because I had over 10,000 people on my list. But I had the wrong people on my list. I everybody on my list are active buyers. They're you know, they want to buy property in Belize. They want to retire in Belize. They're not, you know, investors if you I mean they're investors, but I don't know if you understand what I'm, you know, you know what I'm trying to say though, I get it. Yeah. Yeah.

David Kafka 

So it was a struggle, you know, so it's taken me a little bit, but I like collapsing timeframes for people. What took me 13 years to learn. I'm trying to do it in less time for them. Um, I've lost money in the stock market, I want to help people understand that there are opportunities outside the stock market. And my heart is with the working class, I was a fireman, and then seeing what the retirement systems are bankrupt, I don't want these guys to put in their whole life and then retire with nothing. And so I want to help educate people to where they can place money, not not with me with anybody, right? Because their goals might not be with me, right? If they want something, I'll refer them to one of my friends, you know. So that's kind of what got me there. So I've only been doing it about five years, probably have around five, 6 million assets under management right now. We have the chocolate farm we're doing, which will probably be 12 million 18 million, you know, assets under management. And what that is, if you want me to talk about it, I can. It's we just we have the largest chocolate farm in the country. And we have several crops, if you will, majority of it is chocolate. But chocolate needs a some shade.

David Kafka 

And so we planted some hardwood trees to give that shade. And so we also have areas that chocolates not doing so good. And we stumbled upon somebody wanting lemongrass oil. So we're doing lemongrass, and then there's a fermenting process for chocolate or cacao. And you have to buy things for it. And instead of buying things, we're just planting those plants and using the plants like the banana leaf and things like that. So we have a lot of diversity, as far as crops, that will bring the investor money, and then we're selling the units of the farm. And so it is for accredited investors only. That's how I'm able to talk about it, you know, it's a 506 C, that's how I'm able to talk about it on the podcast. But, you know, just it's more generational wealth, right? You know, it's, it's, you know, I mean, you are getting some cash flow now, but majority of the cash flow is going to be when the the hardwood trees are being harvested.

Mike Swenson 

Well, and quick to touch back on your conversation about your your investor list. Understanding, what does an investor want to do, and how much time do they want to spend is really important. And so we deal with that ourselves on our team, you know, active investor versus passive investor, there's a lot of people that are in a job, and they really want to use their real estate investment as a way to get out of that job, because they want to do the day to day handling of it. And so that's the beauty of, you know, in our role, we're an agent, working with investors, and at the same time, then we're working with passive investors to place their money into investments. And so it's that that dynamic, yeah, if somebody wants to actively manage a property themselves or work with a property manager, fantastic.

Mike Swenson 

That's one type of investor. But yeah, we're looking for, you know, kind of that passive side, as you're looking for people that they're busy professionals, they don't have the time to deal with figuring out what to do with the chocolate farm, right. And so you add value, helping select good investments, but then also help manage that property and manage that asset on their behalf. And so for people in investing, or working with investors, you can do both, you just need to understand that dynamic difference between an active investor is somebody that wants to have their hands on everything, they want to touch it, they want to talk about it, it makes up a part of their day, the passive investor is like, Hey, when are the updates, you know, and what's happening, they don't have as much of an impact in the strategy and the execution, you're putting that together, you're keeping them up to date, but yet, you also have to earn their trust. Because if they want to invest their money with you, you have to do something well with it. And so that active versus passive investor dynamic is really important to understand. Right?

David Kafka 

And you have to talk to talk to them differently to you know, so I talked to my active investors one way, I talked to my passive, you know, in another way, and invite them to come along, if they're active and want to be passive in some areas, we invite them along. You know, one of my mentors, his father wrote the book be in the top 1%. And it's a it's a book for real estate agents. Instead of selling a house to a person one every five years do it like you guys and myself, for investors. And he teaches you investor talk and things like that. And it just helps you to work with investors instead of just, you know, Mom and Pop. I mean, you can help mom and pops too, right. But, you know, putting people putting investors, money to work, where they're doing it in a grand scale to give people a place to sleep at night. You know, self fulfilling Robert Kiyosaki says, you know, if you have one house, you're selfish, you know, if you have multiple houses, you know, you're doing good work, you know, because you're providing heads and beds. So that's all you know, myself and you guys what y'all are doing and just we're just trying to help people and, and being good stewards of their money. And I think it's, it's, it's a noble business.

Mike Swenson 

So I'm curious to learn, you know, talking about this chocolate farm as an idea. How did that start of, hey, let's, let's see, I think what we're gonna do is we're gonna raise some money here, and we're going to put it into a chocolate farm. You know, thinking about Willy Wonka and the Chocolate Factory, I just put you down in Belize, opening up the gates, and you've got your cane and your top hat, and you're ready to go. So talk about kind of how that idea came to be selecting the property putting all that together, I'd love to hear more.

David Kafka 

Yeah. So I'm, you know, being a landscaper, I'm always interested in and agriculture. And looking at the future, you know, how many people is going to be in the world like 9,000,000,025 years or so we're going to have some problems if we don't start taking care of our environment. And since I love agriculture, I wanted to get into something. And, you know, really, for myself, and I started out at citrus. But in Belize, we have that greening, we have probably one of the top quality juices in the country in the world. Tropicana, all these people, you know, love our juice, and our oranges aren't pretty orange, but they make them for juice. And we sell it to all over the world. But we have a greening problem. And that can affect the crop. So I didn't pick that. Then I went into sugar. But sugar is so Paulette political. And so I spent a lot of money traveled Guatemala and everything just to buy some sugar to it for a commodities broker. And I couldn't get nowhere. So I still haven't finished that one yet. But then, who doesn't love chocolate, and I, I stumbled across a gentleman who lives not too far from me, I live between San Pedro and ambergris key and Placencia. Both of them are on the coast.

David Kafka 

But I split my time between them. And he lives in Placencia. And he owns a chocolate farm he was about to sell. And I'm like, you know, Dave is David is his name as well. And I'm like, Dave, why don't we help sell this farm for you. But instead of selling it to one person, let's split it up in chunks, and invite investors to come along and take a piece of the profit. And by way you you're, you get more money for the farm. And you get to retain management because you liked managing the farm. And he had the management setup and everything. So the farms running, we sold, we just sold our final part of the crop last last week, from last year. So what we do with it since the shelf life is over a year, couple years, we don't sell everything at once we wait till everybody else is out, because then we get more money for it. But going back to going back to the story, he wanted to know more about it, he wanted to know, you know who my team is.

David Kafka 

And we sat down with my my, my mentor and, and we talked about that. And he decided to let's do it. And he didn't want nothing to do with splitting the farm up. And I didn't want nothing to do with managing the farm. So we make a great team. And so we're, we just finished all the paperwork. We have soft reservations already. So I think next week, we'll probably start you know, selling units to investors that want like some little bit of cash flow with some generational wealth. Come down and we'll take them a tour of the farm and show them how we make chocolate and have a little bit of fun as well with it. You know,

Mike Swenson 

that's awesome. Yeah, that's it's such a cool story. Because you know, when people think about investing, it's Yeah, is it single family multifamily is flips is it? Is it office space warehouse space mixed use? Or is it chocolate? And so that's, that's the cool thing is Yeah, people get a good reason to have to come down to Belize, and check things out. And so and that's the beauty too, is Having somebody that knows how to manage and operate it, you already have that handled, and so you don't have to take on that learning curve. And it's just now you're, you're educating your investors. And then once they put their money in, you're just giving them updates, telling them, here's where we're at, we're on track with the plans, here's what the financial situation looks like, and, and helping them to manage that asset. And they don't want to have to learn how to manage and run a chocolate farm. That's why that's the beauty of the partnership. Right? Right.

David Kafka 

Exactly. And I just do investor relations, I, once a quarter will go down there, you know, with a drone and take video and show them you know, what we're harvesting and, and show them being fermented and being bagged. And just give them the updates, you know, and then whenever they want to come down, they can come down and, and take a look at their farm. You know, they're part owner of a 515 acre chocolate farm in the country of Belize. And it's not just chocolate, you know, like we said, we have multiple multiple products products, will probably the lemongrass is doing great. And it harvest every two months. So whereas you know, cacao is once a year product, this will really drive up the, you know, the investor returns. So we're going to, we'll be probably planting quite a few acreage of, you know, acres of the lemongrass, especially where because it used to be a cattle farm. So a lot of the ground is compacted and the cacao is just not doing good. And since the root system on the lemongrass is so shallow, it's thriving there. So that whole area will probably do just in and, and lemongrass.

Mike Swenson 

That's really cool. So how does that work then? So for folks that are, you know, looking to, you know, whether it's a chocolate farm, or whether it's, you know, an apartment building, that process of raising money is unique. So kind of walk through that process for you of how you go about raising raising this capital.

David Kafka 

Yeah, so once I find an investment I want to do you know, I'll use one as well, I can't, I won't say one as example. Because I don't want to say anything, you know, out of turn. But once you find a product you want to raise money for, let's say it's an apartment building. In Belize, it's a little different because there's no financing. And so you need to raise the funds for everything. If you know everything is syndicated. Everything from your bookstore to a movie, your apartments that your listeners, you know, buy or live in or whatever. houses can be syndicated. You just find that property and that's what I do I do the same thing. Then I hire my securities lawyer and you want to you want to find an exemption. And you don't want to you know, do a full fledge. You know, I think exp didn't they just didn't they just go public? Or they just rang the bell.

Mike Swenson 

They just rang the bell. Yeah, they've been Oh, yeah. Yeah, they were just invited to ring the bell. Yeah.

David Kafka  

Okay. All right. So you don't want to go full fledge out because that takes millions of dollars and years. So you just pick the exemption, usually, it's a 506 B, or a 506. C, and there's a difference. And we won't get into that. Now let's we have time. And then you just put the team together, put the deal together. And if the numbers make sense, actually, if the numbers make sense, then you put the team and everything together. And then you just invite your investors to come along with you. But while you're doing that, you're talking to your investors seeing what they want, what are their goals? What are their needs, because this isn't what I'm doing. This is what I can how I can help. You know, for instance, you might achieve your goals and your dreams. You know, if you want, you know, because there's no financing, there's not going to be a ton of cash flow.

David Kafka 

You know, so if Mike if you're looking for cashflow, I'm probably going to recommend you to invest in apartment building in the US or in a carbon scrubber or ATMs. And I have friends that do that. So I can recommend them. But if you want to diversify, you want to be outside the US have your kind of bolt hole or your plan B as Simon black talks. Then I can help you if if you want to have some appreciation, you want to a place where you can come and vacation and then that's now tax deductible. I'm not an accountant, but check with your accountant, you know, then you can do that, you know and and so that's kind of what we're doing. So most people that are on my investor list are people that have come here, they bought here or there ain't Did impossibly buy in here, but they're getting their feet wet as a passive investor? And so that's kind of how it is. Yeah.

Mike Swenson 

And I think the two that speaks to the the relationship piece that maybe people who haven't worked with investors that they don't understand is, it's not like, Hey, I'm just gonna, you know, I'm investing in XYZ public traded company, I'm investing in a duplex in this other state. And then I'm invested in this chocolate farm. It's a relationship piece. They know you, they understand Belize, they understand like, I want to work with David Long term, because he's done a great job for me, or if they haven't worked with you yet. It's, hey, this David guy seems pretty good. He seems pretty honest, pretty trustworthy. And I'm interested to learn more about Belize. And so it's about relationships.

Mike Swenson 

I think that's the piece is, you know, when we talk about working with investors, they just think, you know, I've got this, this Yellow Pages book, and I'm just going to pick this one guy, because it seems to be decent. It's about building those long term relationships. If you do a good job placing their money in one fun, now they're going to trust you to do that again and again and again. And you want to be able to essentially build that relationship as long as they want to. And so that's that's the key is, it's not just I'm putting my money in this Billy's chocolate farm one time. It's I think this David guy is pretty cool. And I think we're probably going to work together long term in the future, because I like what he's doing. And I trust him.

David Kafka 

Yeah, exactly. It's definitely 100% Couldn't have said it better myself. It's definitely a relationship business. And it's, it's and being good stewards of their money. 100% agree.

Mike Swenson 

Yeah. For the people that want to be good stewards? Yeah, it's, there's people out there that don't, but you and me probably want to be good stewards of their money. Yep.

David Kafka 

So well, my syndication lawyer says, there's three ways you can do it, you can register the syndication, you can find an exemption, or it's illegal. And I definitely don't want to do that third one, you know, because I don't want to go to jail. So. So we always do whatever we got to do, you know, through the, through the letter of the law, and, and when you come alongside us, or, you know, when y'all are doing it, you know, you'll meet the team, because it's, I'm not doing it myself, right, I have a whole team behind me that, that is that I couldn't do nothing I do. But it also shows that if David can do it, anybody can do it. Just a guy from Charleston, South Carolina, that, you know, wasn't great in school, never went to college, but had a good work ethic, and, and was honest, anybody can do this business. And they can make good money at it. If they're good stewards of other people's money.

Mike Swenson 

And you get to do it from a beautiful place like Billy's versus me looking outside my window and see we got more snow last night. So it's a it's a great spot to be in. So cool. Yeah. So for for people that want to learn more, more about you and more about your projects that you have going on. How can I do that?

David Kafka 

Yeah, so we, we set up a special URL, and it's, so it's our E, F, right? Our ETF for real estate freedom at Caribbean capital group.com. So R E, F, at Caribbean capital group.com. And any questions you have, if you want to come to Belize and my favorite drinks a mojito I'll buy you a mojito or something else and, and we'll just talk shop and and see how I can help answer any of your questions.

Mike Swenson 

Awesome. Well, thank you so much for coming on. And thank you for sharing. It's cool to be able to do some fun and different and, and unique. That's the cool thing about real estate and investing is there's lots of opportunities all over the place. So thanks for sharing about what you're working on and encourage folks to reach out to you and excited to see where this goes from here.

David Kafka 

Yeah, Mike, I appreciate it, buddy. Nice talking to you as well.