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Roberto
Board Administrator
Username: Admin

Post Number: 1535
Registered: 12-2004
Posted on Thursday, February 21, 2008 - 12:20 pm:   Edit PostPrint Post

I believe we have some experts on the subject.
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N T
New member
Username: Belsize

Post Number: 2
Registered: 2-2008
Posted on Thursday, February 21, 2008 - 8:49 am:   Edit PostPrint Post

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.
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Roberto
Board Administrator
Username: Admin

Post Number: 1534
Registered: 12-2004
Posted on Thursday, February 21, 2008 - 10:13 am:   Edit PostPrint Post

@ 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 :-)
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N T
New member
Username: Belsize

Post Number: 3
Registered: 2-2008
Posted on Thursday, February 21, 2008 - 11:41 am:   Edit PostPrint Post

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
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 382
Registered: 5-2005


Posted on Thursday, February 21, 2008 - 12:35 pm:   Edit PostPrint Post

Roberto,

How is this section different from the "Real Estate in Argentina" section? Should we be posting any different types of posts here?
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Roberto
Board Administrator
Username: Admin

Post Number: 1537
Registered: 12-2004
Posted on Thursday, February 21, 2008 - 1:11 pm:   Edit PostPrint Post

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)
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 383
Registered: 5-2005


Posted on Thursday, February 21, 2008 - 1:30 pm:   Edit PostPrint Post

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.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 385
Registered: 5-2005


Posted on Thursday, February 21, 2008 - 5:03 pm:   Edit PostPrint Post

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.
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Roberto
Board Administrator
Username: Admin

Post Number: 1539
Registered: 12-2004
Posted on Thursday, February 21, 2008 - 6:14 pm:   Edit PostPrint Post

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.
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 386
Registered: 5-2005


Posted on Thursday, February 21, 2008 - 6:24 pm:   Edit PostPrint Post

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.
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N T
New member
Username: Belsize

Post Number: 4
Registered: 2-2008
Posted on Monday, March 03, 2008 - 8:41 am:   Edit PostPrint Post

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?
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Sergio
New member
Username: Sergio

Post Number: 7
Registered: 6-2006
Posted on Saturday, March 15, 2008 - 1:29 pm:   Edit PostPrint Post

"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
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Arial
Intermediate Member
Username: Arial

Post Number: 170
Registered: 10-2006


Posted on Friday, March 21, 2008 - 2:50 pm:   Edit PostPrint Post

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.
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Roberto
Board Administrator
Username: Admin

Post Number: 1599
Registered: 12-2004
Posted on Saturday, March 22, 2008 - 1:33 am:   Edit PostPrint Post

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.
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WTMendoza.com
Intermediate Member
Username: Welcometomendoza

Post Number: 199
Registered: 7-2007


Posted on Saturday, March 22, 2008 - 7:56 am:   Edit PostPrint Post

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,
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WTMendoza.com
Intermediate Member
Username: Welcometomendoza

Post Number: 200
Registered: 7-2007


Posted on Saturday, March 22, 2008 - 8:30 am:   Edit PostPrint Post

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:=>
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Simon Fawkes
Member
Username: Expatba

Post Number: 61
Registered: 1-2007


Posted on Saturday, March 22, 2008 - 9:24 am:   Edit PostPrint Post

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
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Arial
Intermediate Member
Username: Arial

Post Number: 171
Registered: 10-2006


Posted on Sunday, March 30, 2008 - 8:17 pm:   Edit PostPrint Post

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.
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Arial
Intermediate Member
Username: Arial

Post Number: 173
Registered: 10-2006


Posted on Sunday, March 30, 2008 - 8:52 pm:   Edit PostPrint Post

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.
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Post-it
New member
Username: Postit

Post Number: 10
Registered: 2-2008
Posted on Monday, March 31, 2008 - 12:01 pm:   Edit PostPrint Post

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.
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Arial
Intermediate Member
Username: Arial

Post Number: 176
Registered: 10-2006


Posted on Monday, March 31, 2008 - 10:40 pm:   Edit PostPrint Post

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.
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WTMendoza.com
Intermediate Member
Username: Welcometomendoza

Post Number: 212
Registered: 7-2007


Posted on Tuesday, April 01, 2008 - 12:24 pm:   Edit PostPrint Post

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.
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Arial
Intermediate Member
Username: Arial

Post Number: 178
Registered: 10-2006


Posted on Tuesday, April 01, 2008 - 5:25 pm:   Edit PostPrint Post

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.
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WTMendoza.com
Intermediate Member
Username: Welcometomendoza

Post Number: 221
Registered: 7-2007


Posted on Wednesday, April 02, 2008 - 1:28 pm:   Edit PostPrint Post

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
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Arial
Intermediate Member
Username: Arial

Post Number: 185
Registered: 10-2006


Posted on Wednesday, April 02, 2008 - 3:05 pm:   Edit PostPrint Post

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
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WTMendoza.com
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Posted on Saturday, April 05, 2008 - 11:24 am:   Edit PostPrint Post

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)
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Arial
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Username: Arial

Post Number: 188
Registered: 10-2006


Posted on Saturday, April 05, 2008 - 3:55 pm:   Edit PostPrint Post

{<<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!
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Post-it
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Posted on Saturday, April 05, 2008 - 5:13 pm:   Edit PostPrint Post

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."
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Arial
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Post Number: 189
Registered: 10-2006


Posted on Saturday, April 05, 2008 - 5:48 pm:   Edit PostPrint Post

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?
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Post-it
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Posted on Saturday, April 05, 2008 - 6:49 pm:   Edit PostPrint Post

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.
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Arial
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Post Number: 190
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Posted on Saturday, April 05, 2008 - 8:32 pm:   Edit PostPrint Post

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.
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Apartmentsba.com
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Username: Saint

Post Number: 457
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Posted on Sunday, April 06, 2008 - 11:30 am:   Edit PostPrint Post

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/banks. Remember that...

As I always say, real estate is not an easy investment....you have to look at all the rationale, motivations for buying. Good luck wherever you decide to buy.

Cheers.
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Apartmentsba.com
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Post Number: 458
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Posted on Sunday, April 06, 2008 - 12:14 pm:   Edit PostPrint Post

Sergio,


I just saw your question above. I didn't see it before. "Fideicomisos" are a very popular way for some developers to put up new buildings. Basically they put together a group of investors and form a "trust". The "trust" is liable for all expenses building the building.

I've personally gotten in on many of these deals since 2004. I haven't lost money in any of these deals but I will say that my last experience I had problems on. I still made a huge percentage return on my investment but you should know that there is simply NO way that anyone can promise you a return on your investment. While I personally say there are good chances that you will make a solid return, I think it's important for you to realize much of it depends on how dependable the construction company is and how much experience they have building.

My returns have averaged anywhere from 50% to 100% on my original investment depending on how soon I got in on the investment. Typically when you invest earlier there is more risk and a longer investment time frame so the cost is lower. For example, when there is a hole in the ground and the building still hasn't gone up your price will be the lowest. The builder basically put together a spreadsheet of all the costs involved in building the building (materials, permits, labor, etc).

Again, I've always made money on these types of investments but read the story above that I posted about. On one deal here is what happened. I got in on the investment and they said it would take about 14 months to complete the project. Well, they had problems with the permits and it took an extra 4 months just to get the permits. Then keep in mind I've NEVER seen a new construction project finish on time. They ALWAYS go over time...sometimes VERY far after they promised it would be done. You have NO control over this.

You typically do a "boleto" for 30% of the total price and then most times they have monthly payments until the property is done. Then you might have a 30% or 40% payment at the posession of the property.

Now, keep in mind that with inflation..it's a major problem for some builders as they didn't account for materials and labor going up 30% or more throughout the building process. Some factored in a building time of only 14 months but if it takes 24 months their costs have gone up. On the last project I did...even though I had a legal contract (boleto) the builder refused to finish the building unless all the investors in the building each put in about 5% more than the purchase price.

Now, I tried to fight this with my lawyers but keep in mind legal disputes here can last 3 years so it wasn't worth fighting it. I know that inflation WAS a factor but that isn't my problem. I would expect any responsible builder to account for possible inflation. Look at it from the other side of the coin. I argued that if the exchange rate improved or costs went down...the builder certainly was NOT going to refund the investors with extra money.

In the end, the investors were forced to pay the extra 5% to finish the project. The builder gladly let any investors back out if they wanted their money back but since the project started, the prices appreciated significantly.For early investors like me, I had a return on investment of about 50% on my original investment in less than 2 years. I was still angry about having to pay 5% more but I didn't complain too much as I still made a hefty rate of return. In fact, I ended up selling my apartment that I bought. You see, you can do a "cession de boleto" where you basically sell your rights to purchase the unit. It is routinely done by initial investors so the property never goes in their name and no legal costs are borne by the original investor since they never did an "escritura" (title deed) yet on the property.

To answer your question, typically it is a solid investment but NO ONE should be promising any set % return. Too many things can happen. Also, you have a risk that the builder never finishes the project or something happens, or they run off with the money, etc. That's why it's SO VITAL that you are investing with an experienced player. There are too many small time players that have NO experience with construction, they miscalculate the costs, they don't account for inflation and then they come hat in hand at the end of the project trying to get more money.

On many developments now, you see in fine print the builders have a clause that says you agree to pay an "inflation adjustment" of up to 30% if the prices rise while they build the building. I would NEVER sign something like that.

So, if you move forward, do a LOT of due diligence on the project. These days, I don't really get into too many of these projects. In fact, I just backed out of a deal where I had an option to purchase a few units. I put down a down payment on an entire floor of an apartment but I did it back last year and the permit process has dragged on past the 6 month deadline so I backed out. Now, I know the builder and the rate of return probably would be close to 100% by the time the project finished....I don't want the hassles.

You'll see different options in these Fideicomisos. Sometimes they will give you a VERY VERY low price if you agree to pay 100% of the purchase upfront. Now, I'd NEVER do this unless you know the builders very well. But the best returns I've made were putting down 100% ahead of time. Sometimes that type of investments can yield up to 100% returns within 2 years but certainly NO ONE guaranteed or promised that. Much depends how efficient the builders are.

I'd be VERY leary of ANY one in Argentina that is promising any type of returns. The first thing I tell my investors is we don't guarantee or promise any set % return. Past performance is no guarantee of future results. This is an EXTREMELY tough country to do business in.

Good luck.
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Arial
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Username: Arial

Post Number: 191
Registered: 10-2006


Posted on Sunday, April 06, 2008 - 12:15 pm:   Edit PostPrint Post

Thanks for the info, Mike. Very interesting.

I have not given up on buying in Argentina. But there are places that I think are just as good as Cafayate and are less than 1/10th the price. For someone that wants lots of hectares from which to produce world-famous Cafayate wine, maybe it's worth the frustration. I just think it's pretty. But I think much of Argentina is pretty!

Anyone with any financial knowledge at all knew the real estate crash in the US was coming. But will people listen when you warn them? Most won't unless you happen to be the anchor on the 6 o'clock news! Of course everything on TV is true and if it were true, it would be on TV. Hahahahahahaha!
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Apartmentsba.com
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Username: Saint

Post Number: 459
Registered: 5-2005


Posted on Sunday, April 06, 2008 - 12:21 pm:   Edit PostPrint Post

You're welcome Arial. I totally agree with you. I don't find anything special about Cafayate. To me, it's isolated and far out. Not my type of place. Also, the wine business is extremely tough and I personally don't find that to be a good business as there are too many variables (rain, sun, insects, hail storms, etc). I have clients that are buying vineyards but they are buying more for the real estate to build houses on around golf courses...not really for the wine as there is no real money in that for small timers...it's a tough business.

I agree with you that many knew what was coming but most did not. The proof are the banks...look how many got caught up in that mess. They were greedy and it's killing them now.

Even today, many are in denial. What they need is many foreclosures to clean up the system. I'm seeing now many states are putting moratoriums on foreclosures.....these will just delay the real estate mess....it's just putting things off. The best thing, IMHO is to get everyone foreclosed that can't afford their mortgages...give investors big tax breaks to come in and buy properties in foreclosure.... that will do more to solve the problem then putting off the inevitable....

I do think you will see the government eventually giving big tax incentives and tax breaks to investors that come in and buy real estate.... cheers.
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Arial
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Username: Arial

Post Number: 192
Registered: 10-2006


Posted on Sunday, April 06, 2008 - 12:38 pm:   Edit PostPrint Post

I know this will draw some criticism on the board but--my shoulders may not be broad but my skin is not thin!

Roberto once gave us some info indicating that certain people in Argentina think the moneyed people bring about the crashes deliberately with regularity and then scoop up the bargains, thus benefiting from the wealth that people have built up. And then the cycle starts over again. It is hard for ethical people like you and me to think people could be that wicked but I believe that when money is involved, without a doubt they can be.

In the US I do not see any way this has been accidental. If you read what Greenspan wrote years before--he knew exactly what he was doing and what was coming. These guys have degrees in economics. They have to know the financial history of the world! All this has happened before in other empires. How could you and I see it and they couldn't? How could you and I be smarter than they are? I don't think we are. Same with the bankers. They knew!

People should have known not to get into that kind of debt. But Greenspan said in a national speech that getting adjustable rate mortgages was a good idea. He knew what was coming. When he says he didn't see it coming, he is lying.

Okay, I am braced and ready for the brick bats!
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Apartmentsba.com
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Username: Saint

Post Number: 460
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Posted on Sunday, April 06, 2008 - 12:49 pm:   Edit PostPrint Post

Arial,

I'm not sure that I buy the argument that this was intentional...I look at it as more a big lie to begin with. The USA wanted everyone in homes....even though many couldn't afford it and should have been renting. The ONLY way they could achieve their big "lie" was to dole out money to people that couldn't afford it.

I don't have an Economics degree but I really love studying Economics and politics and I've always liked looking at the big picture.

What it is plain and simple is GREED. The banks all made HUGE fees by writing these shady loans/mortgages. They didn't care about tomorrow, next year or 5 years in the future. They wanted to book the income "today" and the CEO's and the managers and everyone made fat bonuses and pay packages but you are seeing the results today of that greed.

The government and municipalities wanted to increase property tax intake and this was one way they figured they could do it. You will now start to see some municipalities in 2008 and 2009 that will run out of money. Remember that this year when people are doing their taxes, most of them still have artificially higher prices on their valuations so they will be paying higher property taxes still this year even though in many areas the property prices have plummeted.

When it comes down to it...one word sums up what happened. GREED. It's not really any conspiracy theory.... It's that banks wanted to make fat profits, and people that couldn't afford homes wanted to be living in nice homes they couldn't afford. No one was complaining then. It didn't take a rocket scientist to see that this would happen but it did take people to see the potential of what would happen if they followed their greed.

At the end of the day, most people want to live in nice big fancy houses.... most people want to be driving around in nice shiny, expensive German cars, most people want to take fancy trips around the world, dine out at nice restaurants.... but the reality is not everyone can afford it... Most people are realizing that now.

I don't look at it like any conspiracy theory....just plain old fashioned GREED by pretty much everyone from the government, to the banking and financial system to the everyday John and Jane Doe. We see the same thing on a smaller scale with not just homes but cars and people dining out and taking trips all on their credit cards. Now that the credit markets have frozen up...you are seeing reality set in.... Again, banks are figuring out it's not wise to lend money to people that can't or won't pay it back.
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Post-it
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Post Number: 16
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Posted on Sunday, April 06, 2008 - 5:23 pm:   Edit PostPrint Post

I am actually an economist, but that does not help very much in investment decisions... Economists are trained to explain afterwards what actually happened or went wrong; in general they are pretty awful in forecasting the future. There are too many exemples of this. Economists are particularly bad at timing, and this is of course essential when investing.

In investing (not day trading) I think it is better to just follow common sense and your gut feeling. Look at the broader picture, the fundamentals, do the homework (due diligence), draw your conclusions and then go for it.

I agree with ApBA that it is basically greed that is at the root of the current problems. Of course the guys at the bank wanted to sell the mortgages, and of course the bosses were happy to accept the extra business (and bonusses). Not much different from the second hand car business.

And of course Greenspan must have realised the risks at stake. But the president of the Fed looks at inflation AND economic growth; the European central bank looks (officially) only at inflation. I'm quite convinced that in general the Fed is under more (political) pressure to lower rates than the ECB. This explains a lot of the differences in monetary policy.

Normally I don't believe very much in conspiracy theories, and I don't think this was the case in the US (though some people/companies must be or will be making fortunes out of this; JP Morgan?), but I have the feeling that in Argentina everything is possible. It is clear that wealthy people weather such storms much better than the poor or the middle class.
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Robbie
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Username: Ganavan

Post Number: 32
Registered: 8-2006
Posted on Sunday, April 06, 2008 - 5:34 pm:   Edit PostPrint Post

I'll just step in here. I haven't read all the thread but will chip in with my view on the last two posts of Arial and ApsBA. I agree with Arial and with Apsba partially. There was greed and that is what Greenspan et al knew all along. They could count on the greed and that people would take on the cheap money to buy houes in the belief that prices of property don't fall or hadn't fallen in a loooong time. What I believe is that the Bush administration wanted -and still want- to dilute the debt with the far east, especially China. The way to do this is simply to dilute the value of the dollar. Simple, and not so simple. A bubble had to be created that would mop up all the excess liquidity they were going to pour into the markets. The housing sector is ideal because it does not rest on the shoulders of the banks as much as on the general population that would then,eventually defaul, as has and is happening. The guilt would be on the population and hence would not -as much- affect the governing and corporate elite of the US. They tried the Iraq adventure which failed. They thought at some point that they would control the oil and the lucrative contracts in the middle east. This did not happen. They had to find another sucker to take the responsability of the massive debt. The poor and homeless were the perfect target. Of course the middle class gets swept in too. So does some of corporate America, but there was not other way of engineering it all. The cat was out of the bag and decisions had to be taken. The die is cast: the dollar is depreciating at speed as was the plan. So is the American debt with the World (Central banks across the globe and especially China and Japan). Japan is the US's pocket as it has been since the end of WWII and they cannot and will not complain (thus far at least). China: they will have to play ball and revalue their currency and begin with empowering their population with greater wealth. Something they have begun already and will continue. They will become the consumer powerhouse of the future. As for Argentina, if Cristina plays ball, their will be badly needed investments that will come, but the peso will have to be revalued slightly "a la Brasilera", although both sides (Argentina and foreign investment groups) will have to be realistic in wanting to have investments return over minimum of 15 years and not the standard 5 year horizon they have set in the past to get all their money and some profits back. Argentina is potentially a powerhouse for agricultural, mineral and specialist industrial production, but the government will have to be realistic about allowing investors take some of their profits back and not tax them to the bone as they currently do. The Cristina team should also hardwire the laws necessary for the development and growth of businesses both local and foreign. I hope they do.

Cafayate is a very nice place. Try and visit Arnaldo Etchart in Yacochuya where Michel Rolland had also stationed a little winery with very good wine. The views from up there are fantastic! I have been many times there. The first was 30 years ago when it was a really little dusty town. Some things haven't changed however. For instance it is owned mostly by about 4 or 5 individuals. They, however are reasonable and are have a philosofy of live and let live. Hence the relative development with tourism, etc.

Cheers all. Robbie
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 462
Registered: 5-2005


Posted on Tuesday, April 08, 2008 - 6:39 pm:   Edit PostPrint Post

You can't just blame the US Government with this situation in the USA real estate and the sub-prime. Individuals need to accept personal responsibility and STOP blaming the government, their realtor, mortgage company, etc.

People signed off on what they were signing. They need to be blamed for buying houses they simply couldn't afford. I do put some blame on the realtors and the mortgage brokers, etc. but I place the blame on individuals as well. Many people stated false incomes on their applications. Ignorance of what they were signing is no defense. Also, it didn't take an Economist to see that if you only made $50,000 - $100,000 (or many cases less) per year you should NOT be buying a house that was too expensive. I've seen some cases of nail technicians buying a $600,000 house.

People can play the "blame game" all they want but in the end they MUST accept some personal responsibility for what happened as well.
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Arial
Intermediate Member
Username: Arial

Post Number: 193
Registered: 10-2006


Posted on Tuesday, April 08, 2008 - 9:46 pm:   Edit PostPrint Post

I think you're absolutely right ABA. But that isn't going to help the situation that our country is up against now from the irresponsible financial management. This is what the FED was established to keep FROM happening. But Greenspan went on TV and told people "now is a good time to get adjustable rate mortgages." Most of America is sheep that will follow any "expert." Tell them that and they will rush out and get adjustable rate mortgages.

I still agree with you. Don't misunderstand.

I also think the bankers should take responsibility for their bad decisions and that the taxpayers--and my kids and yours--should not be saddled with this. My kids are responsible. They have a mom that laid down rules a long time ago. You don't buy a McDonald's hamburger until you can live for six months without a penny of income and when you have that, start working on a year and if you don't do that, don't ask for help if you get in trouble. I believe in holding people accountable. But it is the responsible people that will have to carry the responsibility for the irresponsible bankers and borrowers.

Plus the inflation tax from printing up all the bogus money to pay for it all. We are facing that as well.

So honestly, ABA, I agree about not playing the "blame game" but I think there are lots of people that need to accept the "blame" for what they did besides the borrowers. I agree with you, I would just carry it a bit further than you do.
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Arial
Intermediate Member
Username: Arial

Post Number: 194
Registered: 10-2006


Posted on Tuesday, April 08, 2008 - 10:10 pm:   Edit PostPrint Post

I don't know how many are familiar with Jim Rogers. I like to follow success and he's been a very successful commodities investor. The way that the bankers sold the Federal Reserve to the public is by saying their purpose would be to prevent inflation (and what has happened to the value of the currency since they were instituted?). Here is a quote from Rogers and you can read the entire article about what we are up against at:

http://www.moneymorning.com/2008/04/08/exclusive-i nterview-investment-guru-jim-rogers-predicts-more- pain-for-the-greenback-and-the-failure-of-the-fede ral-reserve/

The bottom line: The strategies that the central bank is currently employing are nothing short of "outrageous," Rogers said.

"You know, I’ve read the Federal Reserve Act," he said. "Nowhere does it say [the central bank is] supposed to bail out investment banks! Nowhere does it say you should bail out Wall Street. Their mandate was to have a sound currency, and then it was later expanded to have employment - to help employment. But nowhere does it say: ‘Bail out investment banks.’"
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 464
Registered: 5-2005


Posted on Wednesday, April 09, 2008 - 8:59 am:   Edit PostPrint Post

Arial,

Oh, ABSOLUTELY I agree with you. 100%. I'm not saying the government is not to blame. Or banks neither. They are a big part of the blame as well. I think they all have to take personal responsibility as well. Just about every bank has gotten a dose of reality and their stocks have tanked. Look at banks like Washington Mutual. Most of them are struggling. The government made serious errors as well. (Especially Greenspan).

My point was just that people also need to take personal responsibility for their actions and then move on.

And I agree with you there will be consequences with inflation. It's pretty amazing to see the cost of things going up so tremendously. I was recently in the USA last week and I was amazed to see how expensive a loaf of bread was these days. The Federal Reserve only has so much "medicine" because they can't lower rates too much lower. We'll see how all this turns out.
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Keith Mangan
New member
Username: Kreation

Post Number: 23
Registered: 9-2006
Posted on Tuesday, October 07, 2008 - 4:15 pm:   Edit PostPrint Post

Hi
With all the current troubles with getting dollars into Argentina I was wondering about the legalities of something.
If you are purchasing a property here and the vendor is american/foreign with an account outside of the country, is it still legal to finalise the purchase..i.e do all the paperwork here but the monies never touch ground in Argentina.

Any thoughts?
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 578
Registered: 5-2005


Posted on Tuesday, October 07, 2008 - 4:35 pm:   Edit PostPrint Post

Keith,

Absolutely it is totally legal to wire funds outside of Argentina. From a buyer's perspective it's what is more desirable. The problem is that the seller often times won't allow it for a number of different reasons which I will outline below:

1) The seller needs those funds so they can buy something else. Most locals that sell real estate here typically are buying to upgrade into a bigger apartment or downsize into a smaller apartment. If they allow you to wire overseas then THEY will have to pay the wire transfer fees to get the funds back into Argentina. They'd rather YOU pay it and get paid in cash.

2) Many sellers don't have a bank account abroad but ALL of the affluent and wealthy here do. The problem is that almost none of these people have listed these accounts and "assets" on their tax returns as they don't want to pay taxes on this so they don't declare them. By allowing you to pay via their offshore (outside of Argentina account) they would have to declare this account # on the Escritura and the government would see it.



But please note it's perfectly legal to conduct a transaction with the funds going abroad and the cash NEVER entering Argentina. I do it all the time. Especially if the vendor/owner is a foreigner he/she would MUCH prefer that method as well as it's safer for them as well.

If you decide to go that route, it's a 2 step process typically. To protect both sides, first you would get together to sign the escritura (title deed) and it would stipulate that it's not valid until the secondary document is signed saying the cash was received in the account. That way both sides are protected. You would get together first and sign the title deed transfer, THEN the buyer would wire the funds then once the funds were received, the seller would sign the form showing it was received. I've done literally dozens and dozens of transactions this way all with no problems.

Just keep in mind if the seller is a foreigner (non resident of Argentina) they must apply for an AFIP permit to sell and that can and often does take about 60 days to get. AFIP will make sure they are up to date on all their taxes (rental taxes and asset taxes) while they owned the property.

It's definitely much easier to do a transaction that way and what I prefer. Just note that the title deed must list exactly the account details, bank name, account # and typically even SWIFT code. Many locals don't want that information in the government's hands.
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Simon Fawkes
Member
Username: Expatba

Post Number: 71
Registered: 1-2007


Posted on Tuesday, October 07, 2008 - 4:59 pm:   Edit PostPrint Post

Hi Keith

Yes it is legal, as long as the relevant taxes (stamp duty) are paid in Argentina.

One thing to bear in mind is that when you come to sell, AFIP may investigate how you brought the purchase funds into the country - i.e. were they brought in legally. If you haven't actually brought them in this might be a bit difficult to prove - although you could argue that if they've never come in in the first place they can't have come in illegally. However, this being Argentina I wouldn't like to rely on this unless it's been proved to be acceptable.

Simon Fawkes
Author, The Complete Guide To Real Estate Investment in Argentina, ISBN 1430303980, http://www.amazon.com/exec/obidos/ASIN/1430303980
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 579
Registered: 5-2005


Posted on Tuesday, October 07, 2008 - 5:11 pm:   Edit PostPrint Post

Yes, as Simon mentioned (and it goes without saying) that all taxes will need to be collected. The buyer has a 2.5% stamp tax (that may or may not be split but typically these days not). The seller has a 1.5% Transfer tax. Both based on the price of the property on the title deed.

And I've never had problems with AFIP selling. I've had plenty of clients (and I've also purchased that way as well) where we wired funds abroad legally and it was listed as such on the title deed and never have had problems when I had to sell.

You just want to make sure everything is listed correctly with the account numbers. AFIP might also ask to see a bank statement from that account so if you close it you might want to keep the old statements.

Also, remember that the buyer has the legal right to select the Escribano (lawyer) for the closing so you have that comfort. Just make sure you use a solid and ethical Escribano that knows what he/she is doing and specializes in real estate. Also, remember the only time when you don't have the right to choose is on new construction projects/buildings where the entire building uses the same Escribano (selected by the building). And also realize if you are buying a new construction and making partial payments..it's VERY difficult (if not impossible) to do it all "in white" if the builder/constructor doesn't have an account offshore. Most of the big players have accounts outside of Argentina so foreigners can properly pay for the properties and the money never entering Argentina but most do not.

Cheers.
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 30
Registered: 9-2008
Posted on Tuesday, October 07, 2008 - 10:28 pm:   Edit PostPrint Post

I bought one property in Argentina by wiring some money into an US bank account as well as brought Argentina pesos to the signing. I have sold several properties and received the funds in our US bank account.
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Keith Mangan
New member
Username: Kreation

Post Number: 24
Registered: 9-2006
Posted on Wednesday, October 08, 2008 - 10:43 pm:   Edit PostPrint Post

Saint,Expatba,Soulskier,

Many thanks for your input,I'm in the middle of trying to get money in here legally at the moment and its actually more difficult to get it in legally than in the "grey" as I have obtained residency.
I presumed that having residency would make things easier but I just keep hitting wall after with the banking systems as the majority of my funds are abroad and as my funds werent here when I obtained residency The banks are saying the central bank will charge me 30 percent of what I bring in.Even the staff acknowledged that it was a joke.If I didnt have residency I could transfer in whatever I like..

So an option of payment outside of Argentina is what I will be looking for and fingers crossed something will pop up that fits.

In reference to Mikes post in the World Wide Economic Trends thread

Daniel Scioli (Governor of the Province of Buenos Aires) just announced yesterday a possible "tax amnesty" for Argentines that have undeclared savings abroad outside of Argentina

From what my bank is saying this could be my saving grace. I wont hold my breath for the system to work in my favour but it will be very intresting to see what happens none the less.

Again thanking you all for the information
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 32
Registered: 9-2008
Posted on Thursday, October 09, 2008 - 12:35 am:   Edit PostPrint Post

It is my understanding that if you show the proper paper work showing where the money is going, ie for the property, and transfer from a bank account abroad in your name to a bank account in Argentina with the same name, the 30% holding fee is waived. At least this was the case in May of 2007.

(Message edited by admin on October 09, 2008)
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Arial
Advanced Member
Username: Arial

Post Number: 277
Registered: 10-2006
Posted on Thursday, October 09, 2008 - 4:05 am:   Edit PostPrint Post

Keith, I am equipped not with experience but with advice from Argentine friends. They warn me not to do any "serious" banking in Argentina. Things are quiet now but Argentina has a history. They bank in Uruguay with "serious" funds they want close to home. Many use Swiss banks as well. Anyone have comments about that? Are there problems I have not heard about? I plan to look into Uruguay when I arrive next week. Also if anyone has a bank recommendation, I am interested!

I am amazed that being a resident would make things more difficult. I honestly don't understand Argentina. It seems a country would encourage assets to come into the country instead of discouraging it. How much more resources might Argentina have to work with if people were not parking money elsewhere. Seems sad!

Soulskier, can you explain how the "change house" works? I am not familiar with that.
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WTMendoza.com
Advanced Member
Username: Welcometomendoza

Post Number: 294
Registered: 7-2007


Posted on Thursday, October 09, 2008 - 7:58 am:   Edit PostPrint Post

I think SoulSkier means "Exchange House", and he is totally correct that the 30% withholding is primarily for incoming funds that do not have a clear destination.

BUT, if you bring money in to buy a property, make sure you bring it in "white" (declared) through a bank or an exchange house that works in conjunction with the Central Bank of Argentina.

If you bring money in through an exchange house, through a "black" or sometimes they call it "blue" method, which avoids the whole Central Bank system, you could find yourself in a world of problems when you go to sell that property you bought with that money, later. Because the Central Bank may (and have done so ) ask you "how did the money come into the country"?
I'm sure Apts Ba or Simon could elaborate on these potential problems.

Now, if you bring money in through an exchange house, through the "black/blue" just to have informal spending money, or pay rent, etc…that is no problem, except for right now there is a limited supply of dollar bills on the streets of Argentina which is causing the dollar to rise dramatically here, and also causing this 5% to 7% fee for using an exchange house. Let's hope this blows over soon.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 581
Registered: 5-2005


Posted on Thursday, October 09, 2008 - 7:59 am:   Edit PostPrint Post

Keith,

This country's banking system is a NIGHTMARE. Still, take the time to do it properly because if you don't you will have problems when you go to sell the property as AFIP will see how you brought the money in.

Although keep in mind that if you have a DNI as you mentioned that you do..... AFIP doesn't make you get an AFIP permit when you go to sell. They only make "non-residents" without an AFIP permit do that so really there wouldn't be any tough due diligence process for AFIP when you go to sell your property. Of course the laws could change in the future on this.

It's not fair as AFIP is MUCH tougher on foreigners vs. locals. In fact, most locals haven't paid the proper taxes on their properties which is a bit shocking. But then again why should they as AFIP doesn't force them to pay it as they do with foreigners.

My personal advice is to avoid the banks and go with a legally registered money transfer firm that is registered with the Argentine Central Bank. Those tend to be easier than using banks. There are a few of them but make sure you use a reputable firm.

As far as what the banks are telling you.... the 35% tax holding is exempt on "real estate purchases". However beware that the Argentina Central Bank doesn't consider a boleto (30% down payment) as a "real estate transaction so act appropriately.

Good luck.

PS - Keith, just because your funds weren't here when you got residency doesn't make a difference at all. I'm not sure how many years you have had your DNI. Have you done your taxes here in Argentina yet? The best advice I can give you is probably consult an expert or accountant that specializes in foreigners. They can help you structure a way to do it properly or possibly fix your situation. In Argentina the best thing to avoid problems is doing things right the first time.

(Message edited by admin on October 09, 2008)
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Keith Mangan
New member
Username: Kreation

Post Number: 25
Registered: 9-2006
Posted on Thursday, October 09, 2008 - 9:54 am:   Edit PostPrint Post

Hello all,

Thanks again for the input,The main issue we are facing is that we are looking to purchase something for a renovation.Where this leaves us stuck is the Boleto isnt covered and probably the same price as the house cost again is needed in for work and materials.

I think a good acccountant and lawyer may solve the issue but
for now the Banking system cannot understand/trust what we need to do with the money we wish to bring in.I was hoping to get the funds in by just discussing this with the banks but our wishes do not correspond to any of their codes at the moment and the codes rule all here.
For now some more research and lots of Patience,
Thanks again
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 34
Registered: 9-2008
Posted on Thursday, October 09, 2008 - 9:57 am:   Edit PostPrint Post

WTMDZ, I meant to say exchange house, thanks for clarifying.

(Message edited by admin on October 09, 2008)
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Arial
Advanced Member
Username: Arial

Post Number: 285
Registered: 10-2006
Posted on Tuesday, October 14, 2008 - 8:16 am:   Edit PostPrint Post

Hello all. This time I am looking seriously for advice. Those of you that I "know" through this forum know that my mother has been ill for several years. Every time I came to Argentina to shop for real estate I have had to leave everything and rush back. Now with Mom sadly gone, I am heading down once again to establish a place to ship to.

I wonder about just locating a place to rent, getting settled, and looking at options from there. However, I will be shipping hard to move stuff and wonder how secure a rental is legally. For example, if I were away, could my stuff be moved into the street? Maybe it would be better to buy a place that should sell easily (small apartment with ocean view, for example--they are inexpensive in some places)and then decide for sure with time.

I wrote on another thread about a rather disturbing blog I read online about Buenos Aires during the crisis. No one responded and I know that some of you know. If you don't want to post online perhaps you can write me off line. The writer said that a small town where you knew your neighbors is better, live in town and not out in the countryside because you would be more of a target there, etc. Right now I have many choices. Buenos Aires, of course, is attractive to everyone. Mar del Plata is a second (though Idon't know if it should be) I liked Viedma and Cafayate. Bariloche seems ideal but I have ruled it out for several reasons. I am relatively sure I will see another crisis in Argentina in my lifetime, though I certainly hope it does not happen again! For those reading this who are thinking of visiting, I feel safer many times over in Buenos Aires than in Florida where I am currently staying. So please do not be discouraged by my question. I am thinking very long term and worst case--which I doubt if I would ever see but I look at it anyway.

So that's two questions, actually. Any answers? Arial
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Robbie
Junior Member
Username: Ganavan

Post Number: 36
Registered: 8-2006
Posted on Tuesday, October 14, 2008 - 10:00 am:   Edit PostPrint Post

Hi Arial,
I live now in San Rafael province of Mendoza. It is rather nice as it is not too big and definately not too small. A bit under the radar in many ways, but certainly in touch with the world too. There are an interesting international expat community here with quite a few Americans I reckon. It is fairly self sufficient in most ways. Another alternative is the northern suburbs of BsAs, for instance Olivos, La Lucila, Martinez. These last ones will be far more expensive than San Rafael, though. I am at robbie@pampaswines.com if you want a email contact.
Cheers
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Living in Patagonia
Junior Member
Username: Soulskier

Post Number: 38
Registered: 9-2008
Posted on Tuesday, October 14, 2008 - 1:26 pm:   Edit PostPrint Post

Arial, may I ask why you ruled out Bariloche? I can understand the city center. We live in Llao Llao, 25 minutes to the west of the city, and love it. Other Patagonian towns that should be tranqui if there is a crisis would be Villa La Angostura, SMDLA and El Bolson.

PS We used to own a finca and live outside San Rafael as well, feel free to PM for thoughts on both.
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Apartmentsba.com
Senior Member
Username: Saint

Post Number: 585
Registered: 5-2005


Posted on Tuesday, October 21, 2008 - 8:59 pm:   Edit PostPrint Post

Here is an interview on BBC/ NPR that talks a bit about this global recession and it's affect in Argentina.

I did a long interview with them and they used part of it. Still vast amounts of locals bringing their cash back to Argentina. I have a feeling it will eventually go into the real estate market here. It's a better place for it vs. under a mattress.

http://www.theworld.org/?q=node/21865
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Roberto
Board Administrator
Username: Admin

Post Number: 1789
Registered: 12-2004
Posted on Tuesday, October 21, 2008 - 9:55 pm:   Edit PostPrint Post

Great interview, Mike!
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Arial
Advanced Member
Username: Arial

Post Number: 295
Registered: 10-2006
Posted on Monday, December 15, 2008 - 10:09 am:   Edit PostPrint Post

Here I am! Back with another question! What would I do without you??!!

I know that if you bring money into Argentina to buy real estate and the deal falls through, unless you buy something else within a certain time frame, the bank takes out 30 percent of the funds, no interest paid, for one year.

My question. If one property falls through and they take out the 30 percent because you didnt find another property in time, but then you do find something else, can you still use that 30 percent for a new real estate purchase or is it just out of reach for the entire year?

I may have another attempt to buy fall through because of the rule that the property has to close in 45 days and failure of a bank to give accurate information for transfer. Not only was the information inaccurate, but we kept verifying the information with them when problems arose and they continued to insist that it was accurate. This morning we finally found someone at the bank who told us the information was wrong. The money is now hung up in a US Bank and cannot be requested again until it is withdrawn back into my account which will take who knows how long. It is likely that by the time this is straightened out, and, with time that will be lost for the holidays, I will be too late to close on time. Pretty heartbreaking after the fiasco that happened in Bariloche.
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WTMendoza.com
Advanced Member
Username: Welcometomendoza

Post Number: 346
Registered: 7-2007


Posted on Monday, December 15, 2008 - 8:22 pm:   Edit PostPrint Post

Hi Arial, may I say this is the perfect situation for professional legal and accounting care, to review the details of your history of the details you have mentioned, and maybe some you did not yet. When it gets this involved, every situation is different and it could be dangerous to get generic advice. The good news, as you probably well know by now, is that "almost anything is possible" in Argentina, and in this case I estimate your best friend to be the people that brought your money in, whether it’s a bank or an exchange house. My first gut reaction to your post is to invest the money to hire on a legal/accounting firm that speaks clear English, at a reasonable rate, that has direct and frequent verifiable history with this these kind of situations, so they can interact with your bank/exchange house friends. If they are good, they will also bring all kinds of extra tips to the table.
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Arial
Advanced Member
Username: Arial

Post Number: 296
Registered: 10-2006
Posted on Tuesday, December 16, 2008 - 7:46 am:   Edit PostPrint Post

Well thanks Mendoza. I have SO MUCH to learn about how things are done in Argentina!

I do know the value of attorneys but in more than one case we have consulted more than one lawyer just to be sure (as with Bariloche) and it turned out ALL were wrong! Now I tend to want to check out the lawyers against the forum instead of the other way around! How do you find one that is good is my question? And how do you know they are good or bad before you find out the hard way? Or they give you an answer off the top of their heads and after you make the deposit, then you find out about important things they didn{t think to tell you before. This is our experience. Not just one incident! I know the risk of taking advice off a forum like this--and I would never depend solely on that, but I actually have more regard for the opinions of those who have walked this road before me who post here than I do in any lawyers after my experiences in Argentina. It was very encouraging when Roberto and Apartments BA posted some of THEIR problems and I realized I am not unique! And yet some seem to buy without incident. I am obviously NOT one of those!

Many thanks for your input--and to all the rest of you who contribute on this subject! I would be floundering in the dark without you. At least you shine some light on the subject!
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Living in Patagonia
Member
Username: Soulskier

Post Number: 58
Registered: 9-2008
Posted on Tuesday, December 16, 2008 - 11:05 am:   Edit PostPrint Post

Arial, sorry about your ongoing saga. It sounds like you need to have a good team in place. If you mind me asking, in what area of Argentina is this current deal occuring? Perhaps someone on the board can help suggest somebody to sort out the kilombo.
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Arial
Advanced Member
Username: Arial

Post Number: 297
Registered: 10-2006
Posted on Tuesday, December 16, 2008 - 3:13 pm:   Edit PostPrint Post

Well, the past history has been in several locations. Currently funds were released from a clearing house (I think) in the US but did not make it here for some unknown reason. I had two bank officers working on it this morning for a solid hour! And it is only a small little form! It seems they are trying the way they labored over and kept checking and rechecking the new order form. I should have taken it to a higher level much sooner. But every day I was told manana. And every day I waited until manana.

At first we thought the bank person gave wrong info but that may not be the case, though she certainly was not forthcoming with help when the days kept passing. Not great on customer service though a relative has had funds transferred to the same institution before with no problem. My US bank did order a recall of the funds, assured me it was going to be okay and we made another transfer which should arrive in 48 hours. Maybe we will make it in time if there are no other challenges.

This will probably be my only purchase--ever--here. I must say, with every fiasco I learn a LOT and would do several things differently if there were ever a next time. However, if anyone knows a good attorney in the Viedma area, I would be interested to know who it is. But my serious complaints were not necessarily about the Viedma attorneys, although I do have a story about that too. We checked with two attorneys (I have learned, check with at least two!) to be sure this is not in the Security Zone. Both lawyers said no problem. But when I took the papers to one of them, he looked at it and said, Oh oh, this may be in the Security Zone. DUH! That was AFTER the deposit had been made and AFTER he had said no problemo! But the final word was that it is not in the Security Zone. (I hope thats right.)

Incidentally my son went to the Security Zone office also and tried to see someone that knew something and could not. Someone called and talked to the man upstairs and passed the word to my son, who now tells me from now on if he is at an office like that and no one will talk to him personally, he is going to sit there and tell them I am not leaving this office until I get to talk to (appropriate person!) Maybe thats what you have to do. We dont know! It is a different world down here with a different way of doing things.

I am laughing at your reference to my "ongoing saga." That is EXACTLY how I feel about it! Everyone on the board has heard my stories. And it continues . . .
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Living in Patagonia
Member
Username: Soulskier

Post Number: 61
Registered: 9-2008
Posted on Thursday, December 18, 2008 - 6:51 am:   Edit PostPrint Post

Well the Zona de Seguridad is about 200km from the Argie border with Chile, which Viedma does not appear to be.

I hope the telenovela ends up successful in the end. Remember, patience is a virtue in this country!
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Arial
Advanced Member
Username: Arial

Post Number: 300
Registered: 10-2006
Posted on Thursday, December 18, 2008 - 11:52 am:   Edit PostPrint Post

This real estate is almost on the Atlantic and I am told there are Zona de Seguridad issues there as well. Any border in Argentina with any other country can be in question. In some areas, apparently, it is not an issue and in some it is. I cant figure it out. The government claims there is no map of the area and apparently the "rules" (if any) are not consistent.
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WTMendoza.com
Advanced Member
Username: Welcometomendoza

Post Number: 348
Registered: 7-2007


Posted on Friday, December 19, 2008 - 6:54 am:   Edit PostPrint Post

There is absolutely a map of Zona on the walls of the minister of interior zona frontera office in Buenos Aires. It is not a public office, as in the sense of you walk in and there is the map, it is in the internal offices. I am curios you told you that?.
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Arial
Advanced Member
Username: Arial

Post Number: 301
Registered: 10-2006
Posted on Friday, December 19, 2008 - 12:30 pm:   Edit PostPrint Post

I suspect my complaints are pretty humorous to those of you who have walked this road before me. I think I am starting to morph into an Argentine!

Be careful, all you potential emigrees. I think it is a mental illness that you get if you live here very long. The Argentines have it. They laugh at apparent stupidity. In my own country I would be enraged. THAT is normal. But this morning I sat in the Argentina bank and laughed, sincerely. THAT is not normal!

My project is progressing over many stupid obstacles. Today I went to see if my money transfer came through to my Argentina bank. It did. I cant get it of course until the closing, which will be held in the bank to avoid walking around with cash since the closing is in 100% cash. Of course I dont know exactly how much of it I will need at closing because--get this--the money is now in dollars. But it must be changed to Pesos and back to Dollars. Since that wont happen until the day of closing we wil not know the loss of funds, if any, due to currency fluctuation. There is also IVA on some things, and so on.

But guess what. I do not get to bring one cent more into the country than the cost of purchase. How can you know that to the cent beforehand? Also, in my logic and naivette, I did transfer in a couple thousand more. The house needs work and I need to buy beds, a refrigerator, furniture. But too bad. It may be my money but Argentina does not want me bringing it in to replace a kitchen or buy furniture. No siree!

The bank officer even told me, as Mike has told us, it is easy to take it out, but not to bring in.

Instead of getting angry, I sat and laughed. It is starting to become a comedy. I can just imagine a sit-com on TV of someone trying to move to Argentina!

Argentines tell me their country is totally disfunctional (they also tell me they like it that way for their own reasons!) I believe it. Even the two bank personnel trying to help me (one because she speaks a modicum of English) were laughing and one said ever so graciously--and sarcastically--welcome to Argentina! They have no clue how to bring in money to fix and furnish except I maybe can get a relative to transfer in $5,000 a month with no questions asked. It is called "family assistance." But they said check always because things change from day to day and while this is true today, it may not be tomorrow.

WHY would a bank or a country make rules to keep wealth out of their country? That is my question It cant possibly be stupidity. Someone is always gaining when there are rules that appear stupid. Someone is gaining something. But who? Thats what I cant figure out . . . yet!
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Living in Patagonia
Member
Username: Soulskier

Post Number: 63
Registered: 9-2008
Posted on Friday, December 19, 2008 - 2:32 pm:   Edit PostPrint Post

When I was pushing papers for 2.5 hours yesterday, I had a similar thought. If my friends could see me being so inefficient and patient, they wouldn't believe it!

Arial, open an account with Charles Schwabb, they have no ATM fees or charges, then just pull the pesos out, I think US$2,000 per day.

As far as who gains, obviously the bank as the money has to be converted twice. Also, if you have to pay to park for the bank, the parking lot gains. Other than that, not too sure.

Thanks for keeping us up to date. Don't worry, it will soon be a memory as the real work begins, on your property. Suerte!
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WTMendoza.com
Advanced Member
Username: Welcometomendoza

Post Number: 349
Registered: 7-2007


Posted on Friday, December 19, 2008 - 2:35 pm:   Edit PostPrint Post

Arial - quite absurd some of this stuff, no?

It has always been my opinion that part of the negotiations is to insist on a pesos closing price. Seller likes to quote in dollars sometimes, for various reasons, but insist on peso closing price. Furthermore, I bet if you look at the actual paperork you sign, it will be in pesos! Let me know in your case please.

The EASY way to account for more "official money" is to take into account your recent trip here,and that you "can bring in up to $10K USD" by carrying it on the plane, and it is OFFICIAL investment funds.

Now, what if you didn't actually bring it on the plane? Then bring the $10k through the unofficial "blue" channl of an exchange house, but when you present it whereever needed for official purposes, say your brought it on the plane with you.

Good luck.
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Arial
Advanced Member
Username: Arial

Post Number: 303
Registered: 10-2006
Posted on Saturday, December 20, 2008 - 10:19 am:   Edit PostPrint Post

Thanks for the suggestions, Mendoza. One Argentine (not from this forum)made another suggestion. Honestly these people have ways to get things done!

I like your suggestion best. Thanks.
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Arial
Advanced Member
Username: Arial

Post Number: 304
Registered: 10-2006
Posted on Saturday, December 20, 2008 - 10:25 am:   Edit PostPrint Post

Soulskier, WOW! Thanks. I had no idea you could do that with Schwab. Otherwise I think $100 a day is the limit on my current bank card. I certainly will look into THIS! I wonder if other brokerage accounts allow that. Perhaps my current one. In any event, thank you, thank you! Also thanks for the encouragement!

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