Ecuador & Value Investing

by | Jun 27, 2009 | Archives

Value investing in Ecuador

A recent message Value Investing Diary looked at value investing concepts.

My investment portfolio is worth about as much as it was in 2007 because of my focus on value.

One reason my assets held up well during the economic fall is that I bought good value real estate in Ecuador.  However I spent over six years looking and learning before I made my first purchase!

Fools rush in where value investors fear to tread. I was reminded of this when a reader sent me a note about a property advertised at this site.

Gary, I wanted you to know that the seller of the property you advertised had to flee our area because of so much trouble caused here. There were multiple lawsuits started.

There were real estate scam, among other things… teaming up with an Ecuadorian, they would acquire properties (unofficial “listings” actually) and sell them at greatly inflated prices to unknowing Americans.  They would pay off the original property owner and pocket the difference. The original owner had no idea of the inflated asking price.

In one case, the overcharge was $100,000 to some Americans and had to be returned.   There was another case with a $30,000 overcharge. I think that case is still in court. There are numerous other instances of this fraud as well.

I have learned that the price I paid was greatly inflated due to this person’s  involvement and this person probably singly responsible for inflating the real estate prices in our area.   This person has to sell their property and I know it is available at a greatly reduced price.

Be very careful as this person is not to be trusted.  Sorry to have to write this stuff but this person has been a nightmare.

I commiserate with this reader because I have seen so much of this marking up in Cotacachi as well.

Here is a tip on how to spot value with Ecuador real estate.

Merri and I just returned from Cotacachi. While there we updated our view of the Primavera condos.


Here is a shot of Primavera IV in the background with the new Primavera V units now being built.


Here is the builder Jorge Quilimbaci.

These units have sold for $39,000 for 750 square foot studios to $52,500 for 1,100 square foot two and three bedroom condos.  That works out at about  $45 a square foot.

If you get a chance, check these out.  If you are not in the Cotacachi-Otavalo area, then look for a similar type unit.  You will finds that construction costs in cities for mid range Western style accommodations are running in the $40 to $60 per square foot range.  Looking at such good middle of the road units provides you with a good bellwether.

Use this price guide to compare prices you are shown for other units, houses, land etc. If you are looking at a  house rather than a condo, ask how much more the land might cost?  If you are buying a luxury unit… what is the cost of the luxury?  If the land has a special feature… ocean river or lake front… special view… proximity to some place that adds value.   What does that added location or benefit add to the cost?

Then, always, always, always buyer beware!

This is why we usually recommend that you visit first… rent second and, if getting good value is important to you… buy third.

This is why (though we are regularly offered) we do not accept commissions on any real estate advertised or mentioned.  Neither Merri or I, nor any company entity or family member have ever in 15 years taken a commission on the sale of real estate from  one of our readers.  We are publishers so instead we ask developers or sellers to give our readers a discount if the reader  buys.

For example Jorge above provides a 2% discount to our Ecuador Living subscribers.

This is a real hassle for me because many real estate sellers try to lure our staff.  Part of our employment agreement is… no commissions received from anyone.  We have already lost one of our staff  who  took a commission on the sale of real estate from one of our readers.

Always buyer beware and look for value!  Compare. Look at more than one property and ask around.  Take your time!

You can see a full report on the new Primavera units as well as be eligible for discounts as an Ecuador Living subcriber.

Until next message, good investing.


We hope you’ll join us to learn more business and investing opportunities globally as well as Ecuador.

July 4-8 Ecuador Export Tour

July 8-9 Imbabura Real Estate Tour
July 10-13 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.

July 24-26 IBEZ North Carolina

Sept. 17-21 Ecuador Spanish Course

Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 9-11 IBEZ North Carolina

Oct. 21-24 Ecuador Import Export Expedition

Nov. 6-8 IBEZ Ecuador

Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two.