| Author | Message | ||
     Roberto Board Administrator Username: Admin Post Number: 1535 Registered: 12-2004 |
I believe we have some experts on the subject. | ||
| N T New member Username: Belsize Post Number: 2 Registered: 2-2008 |
I agree with Mike's assessment on the impact that increasing availability of mortgages will have on the prices of real estate in the medium term, all other things equal. Are there any listed Argentinian real estate groups that would give me exposure to this opportunity? So far I've identified IRSA Inversiones Representaciones S.A., but their main exposure appears to be to commercial real estate. | ||
| Roberto Board Administrator Username: Admin Post Number: 1534 Registered: 12-2004 |
@ NT Interesting inquiry... IRSA manages mall complexes as far as I know. They got started with a usd $10 mill. check from Soros if I remember correctly. I would look into 'cementeras' or 'furniture' stores. I don't think there is an easy way of playing RE here. You could join a small pool of architects/investors and pay wholesale the sq meter in coming projects. But if mortgages come into the picture you can always play the banks  | ||
| N T New member Username: Belsize Post Number: 3 Registered: 2-2008 |
Hi Roberto, Yes, IRSA indeed has the largest exposure towards the shopping mall and office segments, although also some residential real estate developing but that's only 1% according to the latest financial report. And you're also right about the SOros connection; the founder Elzstain convinced Soros to play the ARG real estate market back at the beginning of Menem's reign I think. Ideally I would like a stronger focus on the residential sector as this is where the effect of an increased availability of mortgages is likely to be strongest (I presume that for commercial property, financing is more widely available already). Your point regarding the banks is a good one, financial services are likely to be a growth area in ARG just as in other growing/ developing economies. My knowledge of the Argentinan banking market is limited, but what I have gathered so far from this and other fora doesn't impress me terribly... However, there's always a chance that local banks can be acquired at a premium by international groups who want to enter the market, but personally I probably wouldn't invest purely on such a hope. Sorry for hijacking this thread with what is perhaps sligthly off-topic! Best, Niclas | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 382 Registered: 5-2005  |
Roberto, How is this section different from the "Real Estate in Argentina" section? Should we be posting any different types of posts here? | ||
| Roberto Board Administrator Username: Admin Post Number: 1537 Registered: 12-2004 |
Good question, Mike I think the one benefit this thread has is that this page will load much faster than the other one. Not everyone has a fast connection. It may also help separate discussing specific investment strategies from other related topics such as regulations, renting, leases, real estate in provinces, franchises (yours), pricing, contracts, boletos, commissions, market participants, evolution, zona frontera, money transfering, abogados/escribanos, escrituras, news, political interference in the market, taxes, accounting, etc. Here, we can just focus on the 3 or 4 ways to participate in the market to make money, provide hard numbers, discuss ADRs in american bursars and other potential opps, like investment pools (I was offered not long ago to invest 100k in a building development in Belgrano at a very convenient sq mt. rate > since then it has doubled and half of the units were sold to retail), related businesses (furniture), playing the mortgage/bank side of the market, etc. Do you believe there is a chance to separate topics or you think there is a redundancy? (Message edited by admin on February 21, 2008) | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 383 Registered: 5-2005 |
Hi Roberto, Ah..ok... Sure as you mentioned, real estate is very complicated here and it encompasses many different areas. Sure, I think breaking it down is ok. Yes, there are plenty of ways to make money in real estate here. When I have more time I'll post more in detail on it. But you are right.... I got involved/ invested in several projects similar to what you mentioned. Several of them have doubled in value before it finished. Some I still hold but several of them I sold for a great profit. Obviously there was a risk/reward ratio and I'll talk more about that here next month. In one property with one developer the developer (whom I will name after the building is finished) wouldn't finish the building unless all the investors agreed to pay more than the contract rate. I was furious but in the end there was nothing I could do. Inflation went up about 30% during the start to this month so I could understand their point but if I argued if the costs went down they certainly wouldn't have given us a rebate. I don't want to name them now as they might get angry and not finish but once the project is done, I will "out" the developers name and explain in detail what happened. But something important for many of you investing in spectulation projects is there IS a risk here so be careful and know what you are doing. Good fortunes to all. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 385 Registered: 5-2005 |
Roberto, Also, I'm not sure you will get too much "detailed" information from experts in Buenos Aires about many deals? Why? Because many of them make money for their investors privately and by being retained so it's doubtful that they will give very detailed information about specific deals. Or referring out their banking contacts, or legal contacts, etc. Hey, I could be wrong but I know I won't give out specific information on various deals or ways to profit on certain deals. That's what people retain me for. I've always been happy to share general information on real estate in Argentina and as far as I know, I've probably shared more free information on real estate in Argentina than anyone out there. In fact, I think I've shared more free information about how to buy here in Buenos Aires than anyone in the world (at least that's what most magazines tell me that have researched it in detail). At the end of the day, I'll give the same advice that I've been giving for years. Investing in Argentina and South America is NOT for everyone. In fact it's NOT for the majority of the people out there. I'm probably one of the only guys in Argentina that actively turns away investors that want to invest because I don't want to take on clients that I don't think can invest here. I do this for a reason. IRSA is a respected company here. There are a few credible players in the market place here. But also there are a LOT of conman so potential investors need to be careful to navigate through all of this. For every story or example where you read about someone doubling their money on some investment they got in early....i can guarantee you that there are probably 5 other people that got cheated in some way. There are literally hundreds of things you must look out for on these types of speculation projects. The key is dealing with reputable companies/builders/people. You have so many factors to deal with especially inflation here. Remember on these big projects that won't be done for 2 years and where there is a hole in the ground it's very difficult because they priced it in dollars and all their expenses are in pesos. Now fortunately over the last few years the dollar hasn't depreciated here (like all over the world). Now imagine if it did. And you had a 20% swing in the value of the dollar and you have a 25%-30% inflation rate. That could be a 50% swing by the time the project is in the middle of the project. Remember real estate here is priced in US Dollars yet all their expenses are in pesos (building materials, labor, cement, all supplies and fixtures, etc). Experienced players will be better equipped to deal with this but small time players/builders are struggling because they didn't really factor in inflation. So those investing here on projects that might not be done for 1-2-3 years....keep what I'm saying in mind. There IS risk on these new builds. In my situation, I bought a small apartment in Recolea over 1.5 years ago. The project was late (almost EVERY single new construction project NEVER finishes on time so factor that in). They were late by many months and I did get a GREAT price on that project as it was a hole in the ground when I bought several units for myself and clients. The problem is the builder didn't account for the inflation. Now, I don't really care about whatever reason a builder might have. They need to factor that in at the BEGINNING of the project and adjust the asking price accordingly if you ask me. I signed a boleto and contract. I paid 30% down payment for $X amount. Made monthly payments throughout the project. And then the builder says we can't finish the building due to inflation unless you pay 8% more. Now, it's hard for me to complain as my investment went up over 60% (on this particular deal) but that doesn't matter to me. A written contract is a written contract and if the costs went down or the dollar strongly rose in value they aren't going to give me a rebate. So I was furious.... But in the end, legal disputes take years to settle here so the investors in the project were all forced to pay more. Know that these types of things happen in Argentina. Granted my investors are angry but it's comforting at least knowing that they can sell and make a great profit. In fact, the offer that I had on this one was unsolicited. I know I could make more in 2 months when it's done but there are tax advantages to selling a property before the first title deed is done. You can avoid the legal fees on it and also 1.5% transfer taxes, stamp taxes as well and a possible realtor's fee to sell it. So this one made sense. (In fact, I know many locals that all they do is do these deals and always flip before the building is done...their returns are amazing. I'm talking double the return that Warren Buffet averages over the past 25 years). So, 2 days ago I was in the office of the president of the builder (who I will name later). I was there because I sold one of the units that I bought when there was a hole in the ground. He had to sign off on the paperwork. I would have preferred not to have to see him as I was so angry. But it was what it was.... And he is trying to give me a hard time because I have been complaining and also with my lawyers and he is saying "but you just sold your property for 60% more in 1.5 years". And my reply is, "the only reason I sold was because I don't know when you will finish the damn building. I've purchased $100 million in real estate in Argentina and this is the first time someone didn't respect the contract and forced me to pay more". It was a pretty tense meeting and I literally thought the guy would start crying. He was shaking. Then had the nerve to ask me to invest in other projects. Now, I still have some units left in this building but this is just one example.....things like this CAN happen in Argentina. So before you think some new construction is a GREAT deal ...you have to know who you are dealing with. I give this advice so potential investors know that things aren't black/white here...many shades of grey.... Deals fall apart, deals get delayed (sometimes for years) and legal disputes can arise. Yes, there is MUCH more money to be made buying when there is a hole in the ground. I do it all the time but after this experience I cut back on these deals because there is a lot of risk in these types of deals. You place a lot of faith in people/companies and Argentina is so unpredictable. I prefer paying more and buying a finished product these days even if the ROI is lower and I have to pay more. There is a premium for not having the risk. | ||
| Roberto Board Administrator Username: Admin Post Number: 1539 Registered: 12-2004 |
I understand, Mike. Yes, I wasn't expecting others to lay out secrets in the open. Just a regular discussion and if it doesn't happen this thread will just slowly die... no problem. Your point about risk is well taken. I myself didn't want to invest considering all the possible outcomes. And this was a friend of mine!! It's good that you let people know about it. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 386 Registered: 5-2005 |
NO problem Roberto. And hey...I don't blame you. I've seen some shocking things here in real estate in the past 6 years. I've seen and heard of family members and close friends cheating one another on deals so definitely I don't blame you. You probably know more than most people here on your board what it's like here. It's a great country but there are a LOT of ugly sides as well. | ||
| N T New member Username: Belsize Post Number: 4 Registered: 2-2008 |
Hi again, Thanks Roberto for moving my post to a more suitable area! I take it that nobody has any other input to my actual question, i.e., if there are any other listed companies with a stronger focus than IRSA on Argentinian residential real estate? | ||
| Sergio New member Username: Sergio Post Number: 7 Registered: 6-2006 |
"fideicomisos inmobiliarios " As I understand, this is some kind of legal entity that collect money from investors on a particular real estate deal. I have read the following: "A 1 año la rentabilidad es superior al 20% con una inversion de USD 50K" In one year , the returns are above 20% with USD 50K min investment 1- Can someone explain how "fideicomiso" is similar to some legal entity in USA? 2- Are these sound investments? 3- Are the returns realistic? 4- Has anyone done this before? 5- Is there any guarantee on the original investment or promised returns? thank you Sergio PS: I hope this is the correct thread for this question | ||
| Arial Intermediate Member Username: Arial Post Number: 170 Registered: 10-2006  |
I didn´t know whether to put this under Cafayate or here. but I really need help from someone that knows about real estate laws in Argentina. I am finally in Cafayate and I love everything about it. It is a very small town but, as Roberto said, the people are very sweet and it is a really nice place. It´s in the middle of nowhere though, you can´t get here directly but have to go to Salta or Tucuman and catch a local bus to Cafayate, four hours ride through mountains from Salta. But I decided to buy here. Now facing a long weekend and trying to decide whether to just get on the bus and leave without wasting more time. Without boring everyone with the details, I have a question for the real estate gurus. In Argentina, do people normally sign a real estate listing for a certain amount that obligates them to sell if the agent finds a buyer? Or do agents use their gas and car to take you everywhere, and then when you agree to buy, can the seller then keep raising the price and get away with it? Thanks for any input. | ||
| Roberto Board Administrator Username: Admin Post Number: 1599 Registered: 12-2004 |
Arial, I believe Mike -who is subscribed to this thread- is on vacations. He will probably know. My guess is that prices are listed and then you negotiate from there. Watch out for the drop in commodities this week and how it might affect property prices in the coming months... although Cafayate might be an isolated case. Maybe WTM comes to your rescue too. | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 199 Registered: 7-2007  |
Hi Arial, boy do you get around, I'm so jealous:=> I was in Cafayete about a year ago, indeed beautiful with the rock formations, hills, etc....I got the same sensation - a bit isolated. that’s the way I feel about the whole Salta region in general...you have to be a person that that doesn't bother. Check the weather stats also...it packs quite a punch during the rainy season which is November through April with most of the rain during December through March, In regards to your question, Argentina has one of the loosest set of real estate laws around....as far as I know there are no binding situations here like you describe, and even if there were, to try to pursue it in court is no doubt lengthy and costly, if winnable. Sellers trying to raise their price, when interest to buy seems imminent, is an old tale here, so don't feel like it's just you that experiences it. Areas are extremely spread out in the Salta province. which possibly adds to the emotion if an agent who just spent all that time and gas with you. You have to be a really keen negotiator to stay on top of these tricks and last minute shenanigans. If you need to walk away from the deal, do it. If it's a hot property and you know you want it no matter what, bluff 'em to the best you can to get the price you want. If you really want the property, and are having language issues or other issues with the agent/seller, then consider hiring a professional, who has no interest in commission, to help you negotiate with the agent/seller. I will email you a PM suggestion for a person that may be able to help. good luck, | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 200 Registered: 7-2007 |
Arial, I PM'd you that person - Another tactic you could bring into play, which is a risky one at this late hour, is to source another real estate agent to act as your "buyers agent" to have him engage the agent you have been dealing with, to help close you the deal. As you may know here in Argentina, an agent that represents a property, usually has an agreement to charge the seller 3%, and then charges the buyer 3%, even know the agent is representing the seller. If you employ another agent to act on your behalf only, thus in theory this buyer’s agent would be the one charging you, and the agent who reps the property still charges the buyer. The positive of this is that you buyers agent should be now heavily motivated to help you close the deal in your best interest. The negative is that the agent who reps the property/seller , won't be too happy about giving up the 3% that he was going to charge you, and suddenly have to deal with someone he probably knows and may or may not have a good relationship with, although maybe he deserves this after possibly participating in raising the price at the last minute, but maybe this was a seller decision only without any input from the agent that reps him. Bottom line, this whole maneuver could backfire everything, or..it could be the saving grace. Risky at this hour. Are you a gambler?:=> Do you have your own escribano publico on your team ready to review everything? Don’t get sucked in to using the escribano of the seller if you can avoid it. You have every right to use your own escribano publico who should work in your best interest. Arial, be aware that title issues are the most common problem with some real estate transactions here. Make sure you have done your research or have been presented with documentation that show that the seller fully owns the property free and clear, and that there are no disputes/false impressions with property lines, etc. Your escribano should verify this for you. Good luck PS - it probably doesn't help the situation that we are smack dab in the middle of one of the most important holiday shutdowns of the Argentine calendar:=> | ||
| Simon Fawkes Member Username: Expatba Post Number: 61 Registered: 1-2007  |
Arial I would also try to speak directly to the seller if at all possible. It's quite possible the seller hasn't raised the price at all, but unknown to him/her the agent is trying to bump up the price to get more commission. This sort of thing does happen. If the seller agrees they make money. If the seller refuses and walks away they usually call shortly after and say the seller has backed down and changed their mind, to resurrect the deal. This is just one of the reasons why it's always a good idea to talk directly to the seller. It's quite amazing how different the story/details often are compared to what the agent is saying. I hope this helps. Simon Fawkes Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980 | ||
| Arial Intermediate Member Username: Arial Post Number: 171 Registered: 10-2006 |
Simon, thanks for this advice. Sadly my mother passed away and i had to return to the US. However, I will forward it to my son who is in Argentina. The real estate woman who told us of the change did not recommend we buy it though. she said it is ridiculous, that she is embarrassed and would not have shown it to us if she had known they would do that. She does have my son's phone number in Argentina in case they change their mind. The problem is some developer paid $1 million for access from a landlocked parcel and now everyone thinks their little piece of land is worth almost the same per meter. They don't seem to realize that was a special situation. Or so it seems anyway. Thank you again. I will keep this good advice in mind for the future. | ||
| Arial Intermediate Member Username: Arial Post Number: 173 Registered: 10-2006 |
Thanks Mendoza. The price jumped from $18,000 per hectare to $40,000 per hectare and sadly, my interest in it did not make the leap! There is nothing there but BYEWTIFUL mountains and, as Roberto told me weeks ago, SWEET people. I was going to write a description on this forum under Cafayate for retirees with very deep pockets that might be interested but I had to rush back to the US and never got to it. There is a developer there who has put in a golf course that they claim will be professional with Tiger Woods types flying in to the airport. He is also putting in a polo field with polo (you know, with horses) so maybe it is going to rise exponentially. I need Internet and as I posted elsewhere, the only way to get fast Internet there, per the IT man I found there, is satellite. | ||
| Post-it New member Username: Postit Post Number: 10 Registered: 2-2008 |
Arial, very sorry to hear about your double misfortune. You seem to be really enthousiastic about this location. Just one question, you said that there was not really anything on the land; in that case, is USD 40.000 (and even USD 18.000; what an increase actually..) per hectare not a bit steep? Or is it a piece of land earmarked for residential use, with some basic infrastructure? I thought that good agricultural land was around USD 10.000 per hectare in Argentina (at least before the increase of retentions...). I hope you will find another piece of land in Cafayate soon. | ||
| Arial Intermediate Member Username: Arial Post Number: 176 Registered: 10-2006 |
Post-It, of course you are right. $40,000 is more than a bit steep. It is ridiculous. No, no infrastructure, though a neighbor has already brought the power from afar. | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 212 Registered: 7-2007 |
Bringing the power from afar is no easy or cheap feat. Arial, can you post more details about this property...this would be an excellent case study to learn about the quirks and things there is with buying land that suddenly the neighbors think is more valauable because of development activity going on nearby. On the other hand, be glad that nobody is qouiting you in square meters, although I guess you could call it (12 pesos) 4 bucks a square meter at $40,000 USD a hec. If you are indeed in the middle of the purchase, then I don't blame you for not posting details, but if you back off on the purchase or want to post the details anyway for us to make comments on and learn from, that would be excellent. thanks. | ||
| Arial Intermediate Member Username: Arial Post Number: 178 Registered: 10-2006 |
No, I don't mind. Basically I could be very happy in MANY places in Argentina so I don't care if I buy in Cafayate or not. If someone else wants it they are welcome to it! The real estate was priced in pesos. I have translated to dollars because I think in dollars. They are not pricing by square anythings (meters, feet) but pulling figures out of the air. I already wrote that a developer paid $1 million for a piece of real estate to provide ingress and egress to his land for development. It was landlocked and the seller held out for that amount and got it. Locals are all excited about the price and believe that their real estate is worth or will be worth the same. And maybe it WILL be worth that in the future. But not today! The land is good grape land, one would have to put down a well that would cost, I am told, over $10,000. One price was $20,000 including the pump but I didn't pursue it much further once they went up on the price. The land is not developed and you can't remove trees there (some environmental stuff) but it burned recently. Some locals believe that the fire was set to get around the regulation. So now it can be cleared. It is 2 hectares with a very long dirt road to it from the main road. The man next door is retirement age and very nice. He brought the power to his 3 hectares. It was relatively nearby but still it helps that it is now even closer. He has planted grape plants that will bear in a couple of years, or something like that. He is planning to be a "boutique" winemaker. He thinks the price quoted on these two hectares is hilarious also because he bought from the same people a while back and paid nowhere near that. The people trying to sell are reportedly very poor managers, have frittered away an inheritance and are in financial difficulty and need to raise money. So who knows. Perhaps if no one buys for a while it might go at a reasonable price. But I have seen people in Panama actually let their farm be foreclosed by the bank before they would lower to a reasonable price. They would rather lose it than lose face by backing down on price! So who knows what motivates people sometimes. However, there is not much land there without title issues, the real estate agent told me. This one also has title issues but they are fixable she says. She had a lot for sale but I looked only at that which was available with a good title. The town is quaint, a "local" tourist place with an amazing number of hostels. Away from the square most of the buildings are tacky looking, lots of adobe buildings. However, the surrounding mountains are fantastic if you can look past the outlying buildings themselves. However, the development going in is reportedly going to be really modern and upscale, obviously, considering the golf course. | ||
| WTMendoza.com Intermediate Member Username: Welcometomendoza Post Number: 221 Registered: 7-2007 |
Arial, thank you this is just excellent and downright classic source material to discuss - and shows a typical example of how stuff works here and "thinking" by landlords. Without knowing where in Cafayate it is, and only having spent one night there myself, it is hard to comment on how expensive the latest quote is (120,000 pesos per hectare)...but the rest is great material Water Well: Here in Mendoza costs to build a well range from 60,000 to 300,000 pesos depending on how deep, what size pipe it is, and if natural pressure (you hit an underground aquaduct) or if uses an electric motor. If well costs are roughly the same in Mendoza as in Salata, those folks quoted you very the low end of the spectrum. Arial, how big was the piece that an investor paid a million bucks for? I think it's fair for local landowners anywhere in the world to think their property is worth more if they hear about a development going in nearby. Whether they are specifically correct or not, in the particular situation, is of course a whole different matter and depends on a lot of different things. But in general, they are right in principle, but they usually ask way too much at first. You wrote: " They would rather lose it than lose face by backing down on price! " Isn't that amazing? so true sometimes.... Title issues: I find that more than 80% of land here with title issues is indeed fixable...and the fixing part takes cash needed to fix it legally...cash they don't have..and would like to tap into your deposit to use to fix. If you go down this road, make sure your escribano is in tight synch with you ..I have seen people get burned hard by this, but it works also. If you really want this property, the best way to handle this, I recommend, is to pay a well-reputed escribano or other professional to provide you with written proof in both English and Spanish what the title/legal issues are, and do more research on the water issue, before you try to buy the property. You will learn invaluable info about the system like this, even if you don't buy the property. Money well spent in my opinion. Then if you want to buy the property, make a written offer , not verbal, with the amount you are willing to pay, with like, a 24 to 72 hour deadline for them to decline or accept. This method usually is much more effective than verbally saying it. Arial, how far away is your property from Estancia de Cafayate? What is the name of the new development going in? Does Cafayate for sure not fall in Zona Frontera? just more paperwork and delays...but totally doable. Cheers | ||
| Arial Intermediate Member Username: Arial Post Number: 185 Registered: 10-2006 |
The price for the well was in dollars, not pesos (again converted from their quote--I think better in dollars since that's what I'm spending!). I will tell you what I know about the development. Whether it is all true or not I have no idea so please keep in mind that part of it could be gossip. I did try to find out what is going on there. One of the developers is Doug Casey, of financial newsletter fame. You can research the development on the Internet like I did and find out for yourself. I LOVE the Internet!!!! In my search I found something that said he was going to offer it at a reasonable price to the people he wants (his subscribers, I think) and put the price otherwise at unreachable amounts to keep the "rif-raf" out (his words). The story in town is that the price is a million (dollars, not pesos) per half-hectare, or a million per hectare, depending on who you talk to. And of course locals do not understand that a game is being played there and so they are figuring their meters based on the reported price in the development. Also people don't understand that the development has infrastructure that they do not offer. Including golf (not open to outsiders), swimming pools, etc. Also the story around town is that outsiders have come with enough money to buy and were told they are not the type that he wants there. The story is that one man in particular argued and said, But I have the money, I want to buy, and he told him no. They speculate in town that what he wants is "Tiger Woods" types. In my own sleuthing I read the newsletter that gave his plans and it didn't sound that way to me. He is libertarian and my guess is if you want to live there you will need to be libertarian. (I'm kind of libertarian myself but not totally.) I also found a radio interview of Casey on the web where he states something to the effect that rough times are coming in the world and Argentina "doesn't get into all these wars." I am thinking that if this is a retreat, there could hardly be a better place. It seems disconnected from anywhere. If you try to buy a ticket at the Buenos Aires bus station to Cafayate they try to sell you one to El Califate. I am NOT kidding. But Casey is not the only investor according to a magazine article I also found. Wish I could remember the magazine but it must have been an early article because it said that the developers (there are more than Casey) wanted to remain anonymous at that time. I don't know how large the piece was that he paid that price for. And who knows. Based on the other mistaken things I heard, maybe even that is not accurate. Probably if you want to know, a local real estate person could tell you. I'm not in the least interested in the development itself. The real estate woman told me the prices he was asking are ridiculous. But after my research I realized that there are probably two prices. But that is okay with me. I have tried to buy real estate in Central America where I found out there were two prices. A reasonable one for the locals and a different price for the gringo. So it's an interesting switch where the local has to pay a much higher price than a gringo instead of the other way around! (giggle-giggle-giggle) No, it is not in the Zona Frontera. I don't know what Estancia de Cafayate is so have no idea how far it is. I don't know the name of the development. And to be honest, while I liked Cafayate, I am not interested enough to pursue this though buying there could be a good investment. I saw some lots in town that were reasonable, things where you would have to knock down old adobe buildings and so on. But everything around it was junk. But for someone that just wanted to buy to appreciate, probably the development will help the values. BUT, they are actually building their own city inside the development. They will have shops, restaurants, hotels. When one person in town told me how it would help Cafayate and then told me they would have everything inside the gated community I said, "How do you think that will help Cafayate if they have all the businesses they need inside?" He acted like he never thought about it before. But I think probably it will help some. That might be a good topic for discussion here. WILL it help the local people of Cafayate? Thanks for the suggestion about the written offer and that most titles can be cleared. Could be helpful. Arial | ||
| WTMendoza.com New member Username: Welcometomendoza Post Number: 3 Registered: 7-2007 |
Arial, I reccomdn thinking in pesos if you can, it could benefit you more going forward if you invest here. Obviously keep the ever-current exchnage rate in the back of you mind. Just my opinion. Wow that Doug Casey project is sure demonstrating their admittance policy. Sounds more like a very exclsuive community protected from the world, rather than designed to tap into and experience Argenine culture in that glorious part of the country. By the way I hear Bill Bonner always promotes this Doug Casey project. Bill Bonner is also of the camp that predicts $2500 USD on Gold within 2 years. I have some clients are follow Bonner closely and they are sittin tight for $2500 USD gold also. It sure is interesting to see all the opinions out there. There is also a hard core groupo of folks in th world who are just convinced the USA economic "house of cards" is toppling as we speak, in giant slow motion process, and they could be right of course....but if they are right...then this will cast us all into a fairly strong economic slowdown...and how can commodities survive that? I forgot to post in my last note that really if you want to buy property to grow grapes and sell them into the market place...that if you do it on your own, it really doesn't make economic sense unless you buy, at the very minimum, 10 hectares. There is no way it is worth you time and investment, at the present price of grapes, to do it on just a few hectares. This does not count these real estate projects where they sell plots in a real estate development, that includes your share of a few heactares of grapes, becuase they pool all those grapes together and do the work for you. (Message edited by admin on April 07, 2008) | ||
| Arial Intermediate Member Username: Arial Post Number: 188 Registered: 10-2006 |
{<<Sounds more like a very exclusive community protected from the world, rather than designed to tap into and experience Argentine culture in that glorious part of the country. That's how it sounds. But of course I don't know. I don't really care about growing grapes. I do like farm areas and fruit trees and mountains though. And the main part of town was quaint and cute. However, Cafayate is powdery dry where there is no irrigation. A lawn will not grow unless you pump water to it. 'Course there is an upside. One would never need to worry about cutting the grass! | ||
| Post-it New member Username: Postit Post Number: 14 Registered: 2-2008 |
Arial, I've been to Salta and Jujuy, never to Cafayate, but the pictures on internet are quite spectacular. I think WTM is spot on regarding the exclusivity of this project: below is a short part of the description of a tour around Argentina for investors: "Bill Bonner, President of Agora Inc. and founder of The Daily Reckoning and his long-time associate, Doug Casey, are part of a group helping to guide the development of a world-class community in this area, one of Argentina's best-kept secrets. Cafayate is a valley flush with vineyards and blessed with idyllic, Spring-like weather year-round. While we're there, we'll lunch at the house of a local dignitary, sample many of the region's fine wines, and tour Bill and Doug's project, Estancia de Cafayate, too." It is a 17 day trip organised by Agora Travel and costs USD 9.000 pp (+ 1.900 for single occupancy). Tapping into the local culture does not seem to be the main purpose... I don't know the situation at all, but if Estancia de Cafayate is a Casey development and he apparently is working on at least one more project, he may be building up an intersting niche market there. And Bonner's comments on the farmers conflict: "But no day is ever so sunny that politicians can't find a way to make it rain." | ||
| Arial Intermediate Member Username: Arial Post Number: 189 Registered: 10-2006 |
Hmmmm . . well, Post-It, you found something I didn't. Tom posted that he was going to Cafayate and mentioned where he was staying. Was it Estancia de Cafayate? | ||
| Post-it New member Username: Postit Post Number: 15 Registered: 2-2008 |
I realise that this forum is not for promoting any particular investment or project, but I will give the link to the whole article because it is very topical in this thread: http://www.agoratravel.com/investsouthamerica/ To be sure: I am in no way involved in this, just found it following some other links. I think it provides for some interesting reading, though some comments are probably slightly outdated (?). Just a thought (after seeing the dates): maybe you were unlucky because of unfortunate timing? You must have been there just one week after this group had visited the area..I would not be surprised that that has driven up prices. | ||
| Arial Intermediate Member Username: Arial Post Number: 190 Registered: 10-2006 |
All the research I did I missed that one too! I am sure you are exactly right! Good sleuthing! I would not have gone to Cafayate if I had known that. Once they start hyping something it is too late to buy there in my opinion. Particularly in such a small town environment. I don't know how anyone buys in Panama once Agora started promoting it. It was the same as Cafayate is right now. As soon as you agree to the price, the owner changes it. There is no concern for how much investment of time and money you put into it before you agree. One man I know called us one night about 3 years ago, all excited because his offer in Panama had been accepted and he was flying down for closing. My son told him don't go. You think you have a deal but when you get there it will all change. (Been there done that too many times). He went anyway. Sure enough, plane fare and all, he could not buy it. I wonder if this is part of the negotiating strategy. Get the prospect to invest as much time and money as you possibly can, make it as inconvenient as possible, then change it at closing and maybe he will go along. This is why I will not go back to Cafayate. I think it is too late to buy there. Mike did the smart thing. He bought up Buenos Aires  before anyone was interested. Or perhaps they are just afraid to sell once they see people buying. Seller's remorse in advance? I have not figured it out. | ||
| Apartmentsba.com Advanced Member Username: Saint Post Number: 457 Registered: 5-2005 |
Arial, I just saw your posts. Several foreigners have already been buying up tracts of land out there. I have one client that purchased a multi-million dollar big tract of land there in that area 2 years ago. While the average person probably can't see it or hear about it....many foreigners were and are quietly buying up land in Argentina. Some HUGE tracts of land. You have to remember that for Americans or Europeans or British this is amazingly cheap for them compared to back home. Especially the British with their strong Sterling. And you are totally right...in many areas it's utterly frustrating as the owners are always changing the prices, changing the terms or backing out. I always tell my clients....the tough thing is NOT typically finding the real estate...the problem is getting the deal done. I can't tell you how many locals have backed out of deals at the last minute. It's totally unethical but it happens all the time. Funny what you said about me buying up Buenos Aires before anyone was interested. That is partly true. I remember back in 2002 no one really was buying in Buenos Aires. I did all these spreadsheets, all these figures, all these charts showing how tourism would grow and expand. How the government would stick to a strong dollar and a weak peso. I showed my projections for an expansion in the economy, lower unemployment. Many laughed at me. I remember I did some interviews with some real estate magazines and a few of them laughed at me. Then a few years later they came back to me and told me they were amazed what I forecasted came true and wanted to do interviews with me and stories on real estate in Argentina. The investors that will make the biggest money in real estate is buying for the right reasons, and buying and selling at the right times. Most people buying real estate in Argentina have several different reasons for buying real estate here. It's not just one reason. Typically there are several reasons all tied together (tax planning, asset allocation/diversification, estate planning, cash flow via rentals, future capital appreciation potential, getting some funds outside their home countries, etc). Again, as I always say.....look at the big picture. I also forecasted what was going to happen in the USA with the sub-prime mess. I told anyone that would listen 2 years ago to get the heck out of the USA real estate market as it was going to crash with the mess with sub-prime. Many of my clients listened to me and sold their properties in Florida and California and other places. London, Australia, Ireland, Spain. But getting back to Cafayate......lots of people have already started to buy there a few years ago. Still, I think you should look at your motivations for buying. Just because land prices have gone up drastically doesn't mean "you've missed the party". Even today I still buy real estate for myself and my clients in Buenos Aires. If you look at the price graph...many people said in 2003 it was too late to buy here in Buenos Aires, they made the same argument in 2004 and again in 2005 and again in 2006. Property prices continued to go up each of those respective years here. The cash flow is still solid and you have to consider that there is nothing really left to invest in Argentina besides real estate that is safe. You have a country that doesn't trust their banking system and would rather own "bricks" vs. putting their cash in a bank and real estate will typically be a good play. Then consider that most politicians here own real estate. Guess what? Most of them are renting their properties (apartments, homes, storefronts, commerical buildings) out. Look at the Kirshners as one example and their vast real estate portfolio. Look at how many millions of dollars they make in rental income each year. So while Christina is busy placing export taxes on farmers....notice that she isn't adding any taxes on rental income. I look at things like that when I invest. I would bet that the Kirschners and many other politicians here don't own big farms but instead real estate where they are getting rental income. Is the government going to place taxes where they and all their friends are going to get taxed more?? Possibly but not before they would rather set export taxes on other groups of people. I can bet that many of the Kirschner's wealthy friends all own real estate and renting it out as well. Look at those types of things when you invest. Make NO mistakes....taxes have gone up for property owners here. The ABL bill has recently gone up in some areas 300% but keep in mind they haven't raised it for about 14 years. So while it was a hefty increase for property owners.... it's still not too bad considering the last increase was 14 years ago and I'll be happy if the next one is in 14 years..... Also, the income tax rate here has been raised in the past year for the higher tax brackets here. So those that own a large portfolio (including the Kirschners) will be taxed at a higher rate. So it's fair to mention that. Also, in terms of crises and the unknown in Argentina, I believe that will make real estate even more of a safe play here in Argentina. Always be mindful why real estate prices plummeted in 2002. People couldn't access their funds in their bank accounts so no one was buying. Most people don't keep vast amounts of funds in their bank accounts anymore as they don't trust the government |
