What are the risks of investing in real estate construction in the United States?

The American real estate market is the largest asset class in the United States, valued at $228 trillion dollars, approximately twice the value of the shares of American companies traded on stock exchanges*.

Currently, the housing deficit in the United States is estimated at between 4 million and 6 million homes, as reported by The New York Times in an article published on 11/12/24. Over the past 50 years, the valuation of residential properties has been constant, with the exception of brief periods, as illustrated in the graph below.

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Source: https://fred.stlouisfed.org/series/ASPUS #

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Investing in the real estate construction market in the United States through Makan Capital offers a unique opportunity for Brazilians who wish to dollarize your assets with transparency, security and high profitability. However, every investment involves risks, and it is essential to understand what those risks are and what mechanisms of tata and legal certainty Makan offers to protect its investors.

Understanding the Risks of Real Estate Investing

Every investment has inherent risks that may impact the expected return. Knowing these risks is the first step in investing consciously and safely.

1. Market Risk

The real estate market is sensitive to economic, political, and social variations, both local and global. Fluctuations in interest rates, economic crises, and changes in legislation can affect the demand for real estate and its market value.

• Economic volatility: Changes in the American or global economy may impact the value of real estate. Undoubtedly, inflation and the consequent drop in consumer purchasing power affect the real estate market in general. However, it should be noted that the new construction market generally behaves differently from the wider market, with a limited supply of new units per year.
  
  
• Interest rates: Raising interest rates may reduce purchasing power and demand for real estate purchases. On the other hand, high rates mean greater search for rental properties. And as soon as funding rates are reduced, pent-up demand must immediately react. The current interest rate, at the level of 6% to 7% per year, is expected to begin to fall by the end of the year 2025.
  
  
• Regulatory changes: Changes in real estate and tax laws may affect return on investment. President Trump, who has been one of the largest investors in the American construction market for decades, is expected to announce significant stimulus to this industry in his first year in office, as well as the search for a fall in interest rates.
  
  

2. Construction Risk

Even with projects ready to build unforeseen events may occur during construction, such as delays or increases in the cost of the works, which may influence delivery time and profitability. For this reason, careful management of construction costs is essential. In addition, environmental protection laws may affect the schedule and cost of the work. For example, in Florida, it is common for turtles to lay their eggs in nests on properties with bare ground, requiring a cost of thousands of dollars and months to remove them. Land ready to build has already been inspected and that is why this type of risk is significantly reduced.

3. Foreign Exchange Risk

Brazilian investors are exposed to the fluctuation of the dollar against the real. Although the valuation of the dollar is a natural protection for assets, momentary exchange rate fluctuations may affect the physical and financial schedule of the project. Makan Capital recommends that all the amount to be invested be converted to the dollar at the time of the start of construction to avoid surprises and delays in the delivery of the work.

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Legal Security and Governance Guarantees

To mitigate these risks, Makan Capital has a robust model of corporate governance, aligned with international best practices and adapted to the needs of Brazilian investors.

1. Transparent and secure legal framework

Makan Capital provides all the necessary legal framework for the investment to take place, both in Brazil and in the United States, including:

• Starting a business in the USA: Each project is structured under an American company created specifically for that project, with no previous operating history, so without any hidden liabilities. The company must always have at least 2 partners for any reason of participation for tax reasons. For example, the investor may own 99% of the shares and his wife may own 1%.
  
  
• Opening bank accounts with an American bank: The new company created for each project will have a new bank account opened with a first-rate American bank. Some banks offer service in Portuguese and offer debit cards delivered directly in Brazil to facilitate access to the account. All the amount to be invested will be redeemed by the investor for that account in the name of their new company and only the investor will have access and will be able to authorize financial transactions.

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• Clear and auditable contracts: All contracts that will be necessary to develop the project will be available to the investor, giving certainty, from the beginning to the end of the project, about the responsibilities in each phase.
  
  

2. Curatorship and professional management of projects

Investment projects are developed using the same methodology in which Makan Capital invests its own capital, in areas of strong economic expansion, with market information that allows the investor to independently assess each opportunity.

• Reducing operational risk: The careful curation of partners (construction companies, architects, designers, brokers, lawyers, accountants, and others) reduces the chance of delays and construction problems.
  
  
• Efficient management: Professionals with decades of experience and licensed in the United States to work in their respective fields make the entire process more efficient and secure.
  
  

The Importance of Transparency for Investors

Makan believes that transparency is one of the most important pillars for building trust with your investors. Therefore, the entire process is accompanied with complete clarity, including:

• Periodic reports: Frequent updates on construction progress, finances, and forecasts.
  
  
• Open communication channel: Investors can ask questions and follow progress directly with the team.
  
  
• Detailed financial reports: Complete statements to monitor investment performance.
  
  

Investing with Makan means betting on a solid, safe and transparent structure, which mitigates the main risks in the real estate market and ensures that investors have full control and security over their assets. Makan Capital offers a differentiated investment experience, ideal for those seeking high returns combined with legal security.

If you want to dollarize your assets with confidence and take advantage of solid opportunities in the American market, choosing Makan Capital is the first step in a successful journey.

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(*) https://qwealthreport.com/offshore-investments/what-is-the-largest-asset-class-in-the-us-alternative-real-estate-investment-options/#:~:text=Real%20estate%20is%20the%20%231,in%20India%20is%20significantly%20undervalued.

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