Ecuador Property Opportunity

by | Jan 1, 2008 | Archives

Ecuador property opportunity can be seen in yesterday’s message that looked at how a local US publication criticized a smart US property developer for selling his overhang of real estate by auction.

I guess the critical writer would prefer to sit on his property and pretend it was worth more. Pretend and rich…two different things.

This typical error of inexperienced investors is deadly…to fixate on what one paid for an investment…and not what it is now worth. Investors who to bury their head in the sand and wait for an investment to recover usually lose.

The fact is… “an investment is worth what someone will pay for it.” If one buys or invests at the top of a frothy market and the bubble pops, that’s tough luck. That’s also why I always look for value…rarely is it found in bubbles.

When an investment drops its usually best to accept the fact, take the loss and get on with it. If the chance of recovery is better than any other investment you know then hold on. However if you see something that’s a better opportunity, you should sell your loser, accept the loss and make the new investment. As they say… JUST DO IT!

Yesterday’s message also mentioned that the developer who was unloading his loss in Oregon was also developing in Mexico . This diversification is smart. While the US property market tanks, Latin American property is hot.

Though many investors wish to keep thinking that America is the only place to be, or holding on until the US market recovers or even worse pretending it will quickly bounce back, a December 14, 2007 Wall Street Journal article entitled, “South of the border, the market’s still hot” by June Fletcher suggests that it’s not (the only place) and won’t (bounce back soon).

The article says:

“The housing slump has sent many Americans shopping south of the border. Existing-home prices in the U.S. dropped 4.5 percent in the third quarter from a year ago, according to S&P/Case-Shiller. But they are still climbing in much of Latin America and the Caribbean . Buyers are being enticed by the kind of double-digit appreciation that has all but disappeared in the States. In addition, a growing number of new developments are targeting Americans looking for good deals and a lower cost of living. Since 2003, annual home-price appreciation has been running at 20 percent in the Dominican Republic, and could reach 50 percent in the near future, according to Boomerang Unlimited, a Napa, Calif., real-estate investment advisory firm. In San Pedro , Belize , the average price of a 2,200-square-foot home was $697,500 in September, up 18.6 percent from a year ago, according to a study by Coldwell Banker; the price of a similar property in San Jose , Costa Rica , was up 20.7 percent, to $389,900, the study said.

“Prices remain low compared with those in the U.S. , particularly for waterfront properties. Because Americans generally buy and sell properties throughout the region in dollars, not the local currency, home prices don’t fluctuate with the various exchange rates, as is the case in Europe . What’s more, the dollar generally buys much more house in these countries than it does in the U.S. , because labor and land are less expensive.

“Still, the rapid appreciation is drawing growing numbers of bargain hunters, making good deals scarcer and causing some customers to look beyond the usual vacation hot spots. In the Dominican Republic, Century 21 broker Dean Brown says that 80 percent of his buyers this year have been Americans, compared with half last year. Softec, a real-estate consulting firm, says in the past three years, investments in vacation homes in Mexico , primarily by buyers from the U.S. and Canada , have shot up by 60 percent.

Americans’ appetite for investment opportunities is helping to spur a building boom in some areas. In Panama , 170 residential-building projects are under way, mostly marketed to Americans, and 100 more are in the pipeline, according to Panama Legal, a law firm based in Panama City . Among them, a 1,500-acre resort and marina by Naples, Fla.-based developer Todd Gates. The project, on Isla del Rey, one of the Pearl Islands near Panama City , is slated to open in 2009 and will have condos, villas and single-family homes ranging from $275,000 to $1.4 million. “It’s like Florida was in the 50s,” Mr. Gates says.”

The article says much more and ends saying: “Plus, not every place is a boom town. Seasoned real-estate brokers say that to be successful, developments need at least some amenities and should be within an hour’s drive of an international airport.

“But if a place does draw tourists, Americans are willing to travel long distances to buy there. Shaun de Jesus, a San Francisco derivatives sales manager, bought a three-bedroom condo in Punta del Este , Uruguay , three years ago for $120,000, then got a distress-sale deal on a two-bedroom condo in the same town for $90,000 six months later. On the southeast coast of Uruguay, about 90 miles east of Montevideo, the beach town – which has its own international airport – has a year-round population of 7,300 that swells with vacationers in the hot months of December and January.”

This is why I am now in the process of buying nine more properties myself in Ecuador and increasing our Ecuador real estate tours. Our little village fits this profile perfectly, 6,000 people, full facilities…internet and when the new international airport is complete in 2010…we’ll be just an hour away (currently we are two hours).


Join Merri and me in Ecuador this winter.

Jan. 18 – 23 Ecuador Spanish Course

Jan. 24-25 Imbabura Real Estate Tour

Jan. 18-23 Spanish Course & RE Tour and Jan. 24-25 2008 Imbabura Real Estate Tour Two course savings

See haciendas for sale. Here one of our tours views Hacienda San Francisco.

Feb. 18-23 Ecuador Import Export Course

Enjoy the wonderful crafts markets.

Mar. 7-9 International Investing and Business Made EZ Ecuador

Mar. 10-11 Imbabura Real Estate tour

See beautiful lake front property for sale.

Mar. 12-14 Coastal Real Estate tour

Walk on Manta’s beach.

Mar. 7-9 IBEZ and Mar 10-11 Imbabura Real Estate tour

Mar. 7-9 IBEZ and both real estate tour

Most delegates in March will join us for two or three courses as there is a sizable savings.

If you attend all three courses separately the fees are $1,847. Sign up for all three at only $1,499 here. Save $348. Three course savings.

Three courses for two separately are $2,597. Two on our three course adventure is only $1,999. Save $598. Three courses savings for two.