A Rare Find?

by | Dec 29, 2001 | Archives

How to let the Ecuadorian government pay for half of your property.

Dear International Friend,

Once in a blue moon a special deal, usually created by some unusual situation comes along. Our Ecuador eClub advisor may have found one such deal for us now. Here iswhat he wrote:

Dear Gary:

As you know, two years bank accounts were frozen in Ecuador and for these frozen deposits investors received a certificate of deposit that mature in the future. Since that time there has been trade in these certificates of deposit as they can be used to pay off debts to banks from the same bank as the CD. Often the discounts on these certificates reach 30%, 40% even 50%.and thus make many people have benefited handsomely out of these deals.

Some contacts I have come across have some real estate properties with owners who are ready to sell at half price, provided they are paid in full without financing. This is because these people are deeply in debt and can buy the heavily discounted CDswith the proceeds of sale to pay off their debts.

I have ties to a group that is making a pool of deals like these. Some properties are raw land, others with luxury apartments.

I have no interest in these deals other than, at the moment, sharing with you what may turn up to be an opportunity for your subscribers. However, should these deals prove to be as convenient as they now appear to be, I would then seek to benefit out of legally structuring the deals or obtaining a reasonable commission. As you should know, I am quite conservative when I propose a deal, so I have to be quite sure first that the right elements are in place.

For example, on the last deal I proposed and which was received with lukewarm enthusiasm (at times investors shy away from countries like Ecuador…), the investors that came in are likely bound to double or triple their money in maybe two or three years time. Until now every single element of the deal has come into place as expected or sorted out. Not that investing is risk free, but if you balance risk-reward, this is an exceptional thing that has happened to these investors… that the possible reward can be so high while the risk is so low.

Regarding real estate, I should note that the gains in occasional sales of real estate in Ecuador do not pay income tax. All profits may be freely transferred abroad (or kept in Ecuador), without any withholdings or deductions In Ecuador.

This in a way is similar to the opportunity we looked at in Argentina inyesterday's report. The extra profit opportunity comes from buying hugely discounted investments where others have already absorbed a great deal of the loss. These are still speculative deals but when they have dropped 405 or 50% already the risk is greatly reduced.

Our contacts will speak at our upcoming International Business Made EZcourse in January and March and at the February Real Estate Adventure Tour hosted by International Living.

Until next message, good International business and investing!