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Saturday, September 20, 2014

Dear Reader,

Ireland's rated one of the top golfing destinations in the world. I'm not a golfer myself, but it's a passion for colleague Ronan McMahon. He's played on courses around the world. And his golfing knowledge is very handy when it comes to sizing up a golf property.

Ronan's home base, needless to say, is alongside one of Ireland's top golf courses. It's part of a five-star luxury resort where presidents and celebrities come to spend time.

And inside that resort Ronan's found an intriguing property, a town home for $158,000. But is it a killer deal? In his alert below, Ronan explains how you can vet this type of crisis opportunity for yourself.

Read on below to find out more.

Margaret Summerfield

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The Rewards Are Great—But You Need to Be Careful

By Ronan McMahon

Dear Reader,

Yesterday I told you about the opportunity we have on Ireland's Ring of Kerry. Today, I'm going to tell you about another opportunity close by. And, I'm going to show you how you can vet resort opportunities in Ireland that the crisis has created.

(Hint: You need to be careful. But, the rewards can be great.)

Adare is a charming village of thatched cottages and friendly pubs. Limerick City is 15 minutes away while Shannon airport is just a 30-minute drive. The Cliffs of Moher are an hour away, as is the Ring of Kerry. The River Shannon's best lake country is 45 minutes from Adare.

Right on the edge of the village you'll find Adare Manor. The stunning Manor House is a luxury five-star hotel and sits perched above the River Maigue. Grand old oak-dotted pastureland surrounds the world-famous Adare Golf Club. I'm happy to count myself as a member. It's Ireland's number-one ranked inland course. (That's my personal view…and also the view of Golf Digest magazine.)

Across the estate there's a range of other activities, like fishing, hiking, archery, and falconry. For access to the world's best links golf there's no better location in the world. Ballybunion, Tralee, Lahinch, and Doonbeg are all within an hour. Adare is a great base for a visit to Ireland's southwest.

The village is friendly and buzzing year-round. It's a small rural community. There are folks who commute to Limerick. Because of its proximity to Shannon airport, people with international jobs or businesses base themselves here.

Steps from the first tee at Adare you'll find a quiet courtyard of townhouses. In the 1990s, before Ireland's real estate bubble took hold, investors paid big bucks for these townhomes—talk locally is 350,000 euro plus. Twenty years ago that was mega bucks. Buyers got to write their investment off against tax.

The 1,000-square-foot townhomes were offered as rentals through the hotel. Downstairs you have a living area and a kitchen/dining area with both opening up to outside space. Some townhomes look across the driving range to the hills in the distance. Upstairs you have two bedrooms and two bathrooms.

One of these homes currently recently listed for 122,000 euro ($158,000). Is it a killer deal? Remember, this is a truly world-class luxury resort. John Travolta flies himself to Shannon for his regular visits. In recent times I bumped into two ex-presidents in the grounds, one from the U.S. and one from Honduras. It's the type of high-end, low-key place that attracts A-list people who want to come and go under the radar.

Another benefit of owning a little home here is that you could do house swaps with vacation homes in other high-end resorts. The homes will be in equally splendid settings…but you will have paid as little as one-tenth for yours.

This type of due diligence is more complicated than running the rule over a standalone home. Here, you rely on the infrastructure of Adare Manor Resort. You need to be confident that the resort is viable and standards will be maintained. I understand the resort is currently being prepared for a sale by Ireland's "bad bank" NAMA. I expect a buyer will be found and standards will be maintained.

We need to understand how much the management fees are, how they're calculated, what they include, if the management company is solvent, and if they have a fund for big bills that could appear. Fees here currently run at about 200 euro ($260) a month. They cover the grounds and exterior maintenance. But, I haven't yet been able to get my hands on any document that sets out how these fees are calculated.

Owners are currently trying to get together to come to a forward-looking arrangement with the resort. Remember, these homes were sold as tax schemes. No one was paying attention to what happens down the road...which is now. Right now it seems to be a kind of limbo.

What permitting is on these homes? In Ireland, homes built under these tax schemes were designated as "holiday homes". The idea was to add to hotel inventory to encourage tourism. The owner, or anyone else, couldn't live full-time in a home designated in this way. It's unclear to me (or any lawyers, agents, or owners I have spoken to) if this designation is still in place. In practice the rules relating to living in these types of homes aren't enforced, but that's not to say they won't be in the future.

There are uncertainties attached to buying this type of property in Ireland—uncertainties I think we are more than generously compensated for if we buy in best-in-class resorts. There were serious concerns around the Doonbeg Resort an hour away until a guy called Donald Trump jumped in and bought it earlier this year. Now money is being pumped in and great improvements planned to an already world-class resort.

Members of Real Estate Trend Alert, stay tuned for my full report from the Ring of Kerry in your October issue. Right now I'm running the rule over the best opportunities I saw. My report will highlight the best opportunities and the best way to buy.

If you aren't a member of Real Estate Trend Alert you can join here. And you can immediately access my full report on the opportunity in Adare.


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Pathfinder is in the business of recommending a wide range of real estate and relocation services from developers and lawyers to real estate agents and tax specialists, to name but a few. Pathfinder requires developers to meet basic criteria before bringing them to you. However, any vetting we do on projects or professionals should not be construed as a guarantee by Pathfinder. Remember, the value of your real estate purchase can go down as well as up; there are no guarantees that property values will rise.

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