| Author | Message | ||
     Bob Frassinetti (Frassinetti) New member Username: Frassinetti Post Number: 1 Registered: 1-2005 |
Foreign investments in Argentina It is worldwide known by now that Argentina devaluated it's over rated peso during the first months of 2002, after one of the worst political and economical crisis in it's late history. Most foreign businessmen still have the picture of an extremely expensive country in which to invest their hard earned money. The 90s were the days of the one to one, peso and dollar were worth the same, at least for the over 27 million Argentineans. Those were the days of travelling abroad and importing almost everything, from computers to toilet paper. But the 90s are part of our past now. Today the peso rates 3 to 1 Dollar and 4 to 1 Euro, traveling abroad is an expensive alternative, and touring throughout this gorgeous country has become more and more appealing to locals as well as foreigners who very much appreciate the exchange rates. Moreover, it has become appealing to invest in Argentina thanks to the new political decision of treating foreign companies the same way -in legal terms- as the local ones. The local government through this policy aims to encourage foreign capitals to invest productively in Argentina in long term projects. Through means of the Decrete from the executive power, number 1853/93, the law 21.382 states that there won't be any special requirement for foreign companies to invest in Argentina, at the same time they'll be entitled to relocate their liquid and productive profits at any desired time. The simplicity of the procedures as well as the educed requirements and paperwork make these sort of investments even more appealing in the expansionist economic process Argentina is going through. In order to carry on a productive project in Argentina, the foreign investor or investors' group would have to contact the local authorities regarding the basic documentation and requirements in order to start off. In this way it's highly recommended to work with a bilingual staff to carry on with all the legal and social requirements and in this way avoid any misunderstanding. Even more it has become very common to carry on joint ventures or mix companies with local contacts that can work on the follow up on the spot without any restrictions of language, time or space. These mix companies or projects that we're talking about are specially important and interesting for it has appeared to be clear that there are many locals with outstanding projects and ideas, and many other people who happen to live abroad and are willing to invest in potentially good projects. That combination has proven to be brilliant. The particular case of Alan Faena a local designer and bright mind joint the outstanding Philippe Starck to bring back into life an old -nonetheless gorgeous early 1900s building and transform it into the El Porteño hotel and condominium located in one of Buenos Aires most preferential areas: Madero Docks. This is just a mere example of the combination of the local and foreign brightness and ability to foresee a fantastic future. Argentina has a tourist and cultural potential that hasn't yet been developed to it's highest exponent. The possibilities within this market are immense, and the fact that the country has now reached an economical and social stability result in a prosperous and propitious investment moment. (Message edited by admin on January 18, 2005) | ||
| Roberto (Admin) Board Administrator Username: Admin Post Number: 12 Registered: 12-2004 |
Welcome to our forums, Bob. And thank you for your upbeat post. After so many years, if not decades, of failed long-term economic policies your comments transpire a bit of hope. Like you, I truly believe there are numerous opportunities for the savvy investor (foreign or local) who is bold enough to take advantage of international and macroeconomic trends that are benefiting our country but it still seems somewhat early for small investors who may have been wiped out in recent years. Alan Faena, for one, is a consumate business person who achieved early success with Via Vai many decades ago, so we are talking of an experienced player. I am afraid that real progress is comprised of strong players as Mr. Faena as well as a miriad of little players for whom the arena may still be somewhat flaky. Don't get me wrong. I love Argentina and wish her the best of destinies and although these past years have been of phenomenal growth there is still a little political background noise that may avert even the most fearless Trump's and Soros' of this World. Having said this, I agree that these are good times that by all means should be taken into consideration when considering investing abroad and that investors -all of them, big and small- should start testing the waters in anticipation of what is yet to come. Better to be early! | ||
| Apartmentsba.com New member Username: Saint Post Number: 1 Registered: 5-2005 |
I just stumbled across this site. I totally agree with Bob. I started doing business in Argentina in 2002 immediately after the devaluation. I took 2+ years to put together a business plan before deciding to move down to Argentina. I made the move last year permanently and I love living here. After 9 months of living here full-time and becoming fully entrenched in the business community I have to admit that the way they do business here is deplorable for the most part. It has been very difficult to find ethical, honest and competent companies to do business with. Still, it's for that reason that the companies that are organized will not only thrive but become dominent leaders in the business community. In the USA/UK we are accustomed to professional and ethical business practices. We build long-term relationships that we hope will become mutually beneficial relationships. Here in Argentina, the majority of the companies I have come across try to extract the most amount of money out of the first transaction. They will lie, cheat and steal to make as much from that first/only transaction. They don't think about making significant (more) with you down the road in the future. I can give you example after example that would make you cringe. Doing business in South America isn't for the faint of heart. Still, for those that are well organized, have a solid business plan, and some capital -- I find Argentina one of the best opportunities in the world right now to invest in if you are investing in the right areas. The real estate market has tremendous opportunities. I am involved in the real estate field but I'm branching out into other fields and consulting and assisting other individuals that are interested in starting companies here. It's amazing that although Argentina is having so many economic and social problems, they make doing business here extremely difficult. I'm in the final stages of becoming a resident here but it hasn't been easy. I formed an Argentina corporation and luckily now I have established a good network of ethical people. I believe that foreign investors will make huge profits in Argentina. I believe that we will see more and more countries (including China) investing huge amounts of money in Argentina. I am in contact every single day with investors primarily from the USA and the UK that are realizing the potential for investments in Argentina. I'm not sure if any one even reads this board since the last post was in 2004 but Roberto is exactly correct. You must "test the waters in anticipation of what is yet to come". Moving to Argentina was the best decision of my life. Good luck all. | ||
| Roberto Board Administrator Username: Admin Post Number: 19 Registered: 12-2004 |
> I'm not sure if any one even reads this board... Yes, some people read it. Thank you for stopping by. I am curious though... For someone who proclaims to abide professional and ethical business practices I found it strange that you didn't fill out your profile with your real name. In other words, we don't know who you are! Not a good start if you are trying to convey some sense of trustworthiness. Or were you just trying to spam a lil' our forum? We are getting *too* acquainted with the argentine ways, aren't we? | ||
| Apartmentsba.com New member Username: Saint Post Number: 2 Registered: 5-2005 |
I have no problem using my real name. Michael. I hope to post solid and helpful advice on your forum. It's a good forum and I'm glad you are making it available. There is very little information on correctly purchasing property in Argentina. I'm happy to help however I can. Thanks. | ||
| Roberto Board Administrator Username: Admin Post Number: 20 Registered: 12-2004 |
As long as you can contribute without sounding like self-promoting yourself... I always thought that great advice is, more often than not, selfless... But the world runs on self-interest, so... | ||
| Apartmentsba.com New member Username: Saint Post Number: 3 Registered: 5-2005 |
Thanks for the link in your site to the Expat Argentina site. It's a small world as the author is actually a client of mine. I never knew about creating a blog but I'll just create a blog that explains the buying process in detail. Here is the link it will be at: http://apartmentsba2.blogspot.com/ Best of luck to you and thanks again! | ||
| Roberto Board Administrator Username: Admin Post Number: 22 Registered: 12-2004 |
Gee, Mr. Apartments in Buenos Aires!! Not even a link back to our site in your blog?? How's that for a little love? | ||
| Apartmentsba.com New member Username: Saint Post Number: 4 Registered: 5-2005 |
Link is posted now. I'm working about 12-14 hours a day now so it will take me a while to finish my blog. I also started an investment company here in Argentina and I'll post a link to your site on that blog as well. I will also post a link to my Main apartment rental website as well. Good luck and thanks again for your link to that site or I wouldn't have found it. | ||
| Bob Frassinetti New member Username: Frassinetti Post Number: 2 Registered: 1-2005 |
Hey guys, Long time no see... I've been reading both your posts and I find it very interesting, both ways. On one side, I find Robert's initiative to develop a site to discuss these kinds of matters very encouraging and a great place in which all people like us can share their projects... At the same time I want to point out that I find Michaels' project very amusing, specialy if we consider the fact that he's working on a sustainable business on one of Argentina's best advantages of the moment with a long term perspective. Something that -as he pointed out in his post- does not always occur with businessmen who wish to take the most out of one transaction and leave it there... I believe this is not a problem of Argentineans but one of people with narrow mind that don't foresee a future and feel that the only business ever is the one they are working on, so they do all their work in the gray area between honesty and dishonesty... I was in the Real Estate market during the 1980s and had to work during the hyper inflation... it was tough and stressing.... Then I began to work merging both my passions for Architecture & Art through means of a cultural project, Buenos Aires Art Dealer and BA Toy Museum... I'll soon be posting new articles... cheers, Bob | ||
| Anton Unregistered guest |
I have also just stumbled across this "forum" and found it very interesting. Though it seems still like a "small forum" It also seems like there has been a bit of antler rubbing among the "characters" instead of discussing the issue, which I believe is opportunity in Argentina. After "surviving in this country during 45 years" I still keep on betting on this "darned/blessed" country. Even though I possess a Dutch passport (as in lifeboat to safer waters) I still believe there are clearly many opportunities here, and I´m currently going to invest half my life's savings on a new project. Obviously it will be geared to the "export market" (hard currency is always a safe bet here)and even with the odds against me, it seems worthwhile investing here. Why? Because there are few places in the world where u can make a 30/40% gross profit (on a conservative basis), without having to live in the middle of the jungle, struggling with malaria and wild animals, and most of all craving for a "cold one"!! Hope to hear from you guys. Anton | ||
| Bob Frassinetti New member Username: Frassinetti Post Number: 3 Registered: 1-2005 |
Hi Anton, Welcome to this forum. It's good to hear that someone else is as crazy and passionate about this country and its beauties. What are you planning to invest on? Properties to recycle, some other project, may be a hotel to bond this moment's best economic advantages in our country -tourism and real estates-... Are you living in Buenos Aires now? More latter, cheers, Bob | ||
| Roberto Board Administrator Username: Admin Post Number: 29 Registered: 12-2004 |
I think he said 'exports'. Manufacturing in Argentina must be pretty darn cheap these days. But then again, only if you find workarounds labor legislation. Not being able to fire on the spot as we do in the US or having to pay ridiculous settlements can bankrupt any business. You guys feel free to start *new* threads about specific projects. That may get the ball rolling... | ||
| Apartmentsba.com New member Username: Saint Post Number: 5 Registered: 5-2005 |
There are various opportunities for serious investors but keep in mind there is no "easy money" here in Argentina. It takes a lot of hard work, dedication and using people that know what they are doing. It took me a good 2+ years to research and put together my business plan but it's paying off now. Bob is 100% correct. I told myself before I moved here I had to make u$s. The two best ways I saw were 1) tourism and 2) real estate. I first bought part of a travel agency but I got too busy with real estate. My real estate business has kept me very very busy. It's a lot of hard work but I know it will pay off. I just got another serious offer to purchase my company from a major financial institution from the USA. I started a Venture capital company to capitalize on the various opportunities here in Argentina. I'm looking to pick up majority control of various start ups in exchange for funding them in their "seed stage". Again, no "easy money" here in Argentina but those that have a solid business plan, well funded and are using dependable people will do well here. Good luck all. | ||
| Anton Dekker New member Username: Anton Post Number: 1 Registered: 6-2005 |
Hi, there guys. I'll begin by saying that, yes, I'm living in BA. My enthusiasm comes from having finally decided to "bet on this horse" and ride it till I cross the "final line". Not much point in changing now. This might not be paradise, but sometimes it can get quite close to it, specially when you are surrounded by your family and friends, sharing an "asado" and a few glasses of our fine malbecs or cabs (Our Merlots are improving too, so cheers to that too!!) Yesterday was in a bit of a rush, but now I have a little bit more time. I'm actually building a series of projects. On the exports side I plan to export "services" (Web design and tourism) I chose to stay out of the real estate as it's something you really have to know very, very well. Even real estate developers have gone bankrupt (Maybe Saint can confirm this, but I heard that a major player like Pulte plans to leave the real estate market??) There are however smaller type investments like buying one-two bedroom flats and furnishing them and renting them to tourists for about U$S400/650 (this is 100/170% higher than what you can get from the local market) A flat like this could cost about U$S35.000/50.000 (depending largely on location) So you do the maths. It's about a 15% return (gross) on property that yes, could drop, but not likely. More likely to increase if you choose the right neighbourhood. Some flats have not only kept the same value of the U$S1=1 era but even increased!! And other properties are now 30/40% cheaper than in 2001 (when prices already were low due to recession) Very unpredictable country in that sense, so decided to keep away. Instead I bought a share in a webdesign agency, and we plan to export this service. The advantages are too good to ignore. Argentina has always had a great level in "creative activities" (painters, sculptors, writers, advertising, etc.) As a result of devaluation our designing costs are very cheap, as this is a "people intensive" area (the cost of hardware has obviously increased, but it only represents 7% of the overall costs) And communications are now dirt cheap (emails, MSN, etc.) And in a sense the labour costs are expensive Roberto, if you work with a fixed staff, but in this kind of area you work with a project based staff, freelancers. So, no firing costs. This obviously will change as we grow, as we eventually will need to hire a fixed number of "grunts" for the basic design and admin work, but you can hire people for the equivalent of U$S400/500 all included. There are those that will pay less(U$S200/250) But we believe that when you "pay peanuts you get monkeys". There is also the Tourism sector, as you know Argentina is a very attractive country, and "piqueteros" aside, we are a relatively safe country, full of natural wonders that are very affordable. I mean, where can you eat the best meat and drink the best wine, for under U$S 20? (seems that I kind of fancy this diet, right?) Hope not to come accross as a carnivorous drunk!! But hey, would be nuts if I ate veggies and drank water in a country like this. Plus we serve salads with the meat and wine is mostly water and grape juice!! I believe there is a lot to be improved in the tourism area though. We still tend to "abuse" tourists (taxi drivers try to charge tourists in dollars, differential tariffs for locals and tourists even at 4 star hotels, airline tickets, etc) This is unheard of in most international destinations. There are a lot of investment opportunities, and yes there are risks, specially in those requiring a long period for a ROI, but even the international mining companies are doubling their bet. Of course they could be wrong. A lot of CEO's around there looking after their own pockets instead of their shareholders' interests. But as Saint said, if you find a trustworthy local contact, and check his/her credentials properly you can find a really good deal. Well guys, I hope I wasn't too long winded and wish you all a nice weekend!! Best, Anton. | ||
| Roberto Unregistered guest |
> Instead I bought a share in a webdesign agency, and we plan to export this service. Good. Outsourcing... I have a few friends doing this and they are doing fine. They carved out a niche. You may be unto something, with a few caveats. Last time I was there I had many probs with the internet connection. Fibertel sucked and Iplan was not far behind. Although they promised me a 2 meg simetrical line, it took them almost 40 days to get it up an running and when finally up, it was an assymetrical one with low upload speeds that hurt me (when managing the website). This 'fabuluous' speed came at a clip of $150+ a month and paled in comparison with my 3 megs at $50/month here in Miami. Still, you are right, creative is very high and very cheap in Buenos Aires. One other problem I found, was that *english* is far from a commodity down there. So if you require copywriting in english you will end up paying colossal bucks for a less than perfect job. Speaking and writing good english in Argentina is considered skilled work when I can get 500 written words professionally for 5 bucks or less even in the US (not to mention other outsourcing destinations) so whereas web design can thrive in Buenos Aires, other type of outsourcing might face some obstacles. Give me a list of good, cheap copywriters in Buenos Aires and I am taking a plane yesterday. (Message edited by admin on June 26, 2005) | ||
| Anton Dekker New member Username: Anton Post Number: 2 Registered: 6-2005 |
Woah Roberto!! Caveats!! Good schooling man!! Haven't heard that word since my days as a Sales and Marketing Manager in an English publisher!! The MD was English and loved that one, specially when talking about the Argentine contracts! I remember having to look it up in a dictionary the first time he used it. Thanks for the input, will share it with my partners who are more involved with these issues. Can u also send me your details on the web hosting? (technical/costs) Always useful to have another supplier. We are currently developing motion graphics presentations so I guess these points you mentioned are important. About the copywriters, funny you mentioned that, as I am currently in touch with some translators, and some are ghost writing/translating for clients abroad. The USA and the UK primarily. What I understood from them is that Argentina offers a unique combination of quality/price. E.g. I know a couple of architects that are making serious money writing articles for architectural magazines abroad. Serious money as in U$S 2.000 per month. This is quite a sum now here with a 3 to 1 ratio. If you literally meant 500 words for 5 bucks, then that's a hell of a bargain. These guys make almost U$S 50 for that amount. They now got a job of about 100.000 words!! They told me that if this keeps up, they might even consider dropping their jobs as architects, even though they are quite busy and have good clients. But they can't stand dealing with the Argentine clients, as this usually means, chasing them to get paid. They sometimes have to advance their crew upto U$S 5.000. I guess that's why most of us with a European upbringing rather work with international accounts, as there tends to be a better understanding on what "honoring your word means". However, I have worked many years with local accounts, and not once have I had someone "s... me with a payment". I guess I also am careful when it comes to choosing clients too. Not everyone in Argentina is out to s...you. You can find plenty of honest blokes over here. There's plenty of the other kind too, but I guess this happens everywhere. Anyway, thanks again for the input and bye for now. Anton | ||
| Roberto Unregistered guest |
hehe... you sound like you've learned a lot already. ok, make it $7 bucks for 500 words for a more realistic budgeting. Contact the people at iplan.com.ar They offer small business packages. The set up is fiber so your location must run close to a fiber network, typically, downtown Buenos Aires or somewhere around the financial district but they may have laid fiber in other locations too by now. Fiber is more reliable and in my experience, it worked better than cable. Customer service wasn't a big deal, but that is the case with most things in Argentina. Keep us posted. | ||
| Bob Frassinetti New member Username: Frassinetti Post Number: 4 Registered: 1-2005 |
Real Estate Investment for Buenos Aires, and maybe other major cities in Argentina…. I think our conversations are reaching quite an interesting point, for it seems that not only we're all very much into developing new and interesting projects but also that we agree to see the amazing potentialities present day Argentina has to offer world wide entrepreneurs. At the moment I'm working on an interesting cultural approach to Real Estates given the fact that the traditional gourmet and lodging possibilities are top full these days -even the initial down payment capital has doubled from say a couple of years ago. I will share with you all my perspective in a couple of days, as soon as I finish up polishing the concept I've been working on during this year. Have a great weekend, hope to hear from you all soon, Bob Frassinetti | ||
| Apartmentsba.com New member Username: Saint Post Number: 6 Registered: 5-2005 |
Real estate is probably one of the best and safest plays in investments in Argentina. Still, no one should be deluded into thinking anything here is a slam dunk. It's best to have a good game plan and do your homework. Real estate is not regulated here and there are many people waiting to con and cheat you. I am heavily involved in real estate here providing real estate consulting for many, many foreigners. Surprisingly, many come to me after they bought because they were cheated or conned by their realtor, lawyer or money transfer firm. There are many entrepreneurial opportunities here but make sure you have a solid business plan. I took over 2 years putting together my business plan and it is paying off now. Still, as a very wise man once told me, "Argentina, for the most part, is the closest thing to the wild west anywhere, aside from some African countries. And chances are it will forever remain like this, in between short periods of calmness." _______________________________ Here is a post I posted on another board about doing business in Argentina. I think it's appropriate to repost here: I am an American and I moved to Argentina last year. I came down over the course of 3 years 15+ times before I moved here permanently. I find the Porteños very educated and friendly. However, it is a totally different world being in a city like Buenos Aires as a tourist and another living here and operating as a business. Before moving down to Argentina, I read that Transparency International, which is a well respected organization listed Argentina as one of the most corrupt countries in the world to do business in. http://www.transparency.org/cpi/2004/cpi2004.en.ht ml#cpi2004 I thought to myself there had to be a mistake. Why would they write this about a country I loved so much. How could Argentina be grouped with countries like Libya, Ethiopia, Kenya, Angola and the Congo?? Let me tell you something. After living down here and doing business with these locals I can tell you that I'm surprised Argentina isn't ranked further down the list. It is sad to say but the way many businesses here do business is almost criminal. The truly shocking thing is most businesses have done business like this for so long --this is all normal to them. They don't know another way to do business. The Porteños always try to compare themselves to their European descendents but from a business perspective they have more in common with African nations like the Congo, Angola and Ethiopia. There is no sense of ethics or loyalty for the most part. There are exceptions to the rule but many locals try to extract as much as they can out of the first/only transaction. They try to make as much as they can in the beginning and they don't worry about a longer term mutually beneficial relationship in the future down the road. This is perhaps the biggest challenge I have doing business here. The reality is that the vast majority of companies here in Argentina would be bankrupt or go out of business in as little as 2-3 months in the USA or the UK. In the United States companies that operate like this quickly go under and are replaced by companies that are organized, ethical and offer good customer service and strong relationships with clients that last for years. That is very rare here. Many companies here think they are doing you a favor by spending money with them or giving them your business. They are so short sighted here. It's truly unbelievable. Many savoy and intelligent businessmen and women have emigrated to the United States and Europe because they could not do business in their own country. Not only do they not trust the government but they don't trust one another. Family fortunes have been made but then lost due to rapidly changing laws, market conditions or outright theft. It is scary to think about but it is not like the United States. There are not stories after stories of how people made fortunes. There are far more tales of how people lost their shirts. One successful Porteño, named Roberto, who owns and administers www.travelsur.net emigrated to the US emailed me the following, "Argentina, for the most part, is the closest thing to the wild west anywhere, aside from some African countries. And chances are it will forever remain like this, in between short periods of calmness." I couldn't agree with his statement more. Many locals are blind to this type of behavior and they believe this is how business is done all over the world. The Porteños that have studied or worked abroad in the USA, UK, Asia or other parts of the world recognize this defect of their own country. My doctors, attorneys, accountants and friends all studied or worked abroad so they understand how difficult it is in their country. Many meetings I go to on a daily basis the locals apologize ahead of time for the system here in Argentina. However, this kind of behavior is exactly what has caused my company to grow so quickly. Americans and Europeans don't like doing business in this fashion. Individuals and investors that are flocking to Argentina do not trust the locals (for good reason) so they have hired me and my company as a consultant to assist them. It takes more than a good idea to evolve and create a viable business here in Argentina. It takes capital but it takes a good knowledge of the kind of business environment that is in place here. Many foreigners pack up and go home very quickly because they are not accustomed to working like this. They were not educated on how slow the system is here and how much red tape there is. They have never before operated in an environment where there is no loyalty, ethics or professionalism. Those with a solid business background that have operated in the USA/UK/Europe/Asia, that have a good education and understand business and long term relationships, and are well funded are going to become dominent leaders in their respective fields here in Argentina. The key is having a realistic expection before you come of what the business environment is like. There are many opportunities in Argentina for a foreigner with a good head on their shoulders and a good business plan. There is no hope of coming to Argentina and getting ahead by being an employee. You MUST start your own business here to thrive. While I am fully aware that it is impossible to change the system on a massive scale, my goal is to create businesses and help others create businesses that will fundamentally help change the business community in Argentina. Since the dawn of time -- no matter how much corruption there was in a society, companies with a solid business model that operated efficiently and properly and were well funded, not only excelled but they caused other companies to rise to the occassion. | ||
| Apartmentsba.com New member Username: Saint Post Number: 7 Registered: 5-2005 |
Anton, Also, I just read your post about real estate and risk and knowing about real estate. You make excellent points above. Most people don't realize that there really are no mortgages here for foreingers so you are putting 100% cash upfront. It is completely different than the USA. With those kind of terms, there are no room for mistakes for most people. I'm not sure if Pulte is pulling out of the market here or not. I knew they were building houses in the suburbs. You have to remember that the houses in the suburbs are being bought by locals and not foreigners. Pulte might be accostomed to many people buying mortgages, bank loans, etc. Here that isn't the case. Things couldn't be more different. There is money to be made but I wouldn't be investing a lot of money in developing houses in the suburbs. For me, the future is buying apartments in or close to Recoleta and Palermo and marketing them to tourists. A 4 and 5 star hotel can't compete with a 5 star property that is 2 or 3 X the size of a tiny hotel room. My properties have European furniture, big flat screen TVs, DVD players, nice stereo systems, Four Seasons Presidential suite luxury mattresses, USA phone lines, high speed wireless internet access, local phone lines. The 4 and 5 star hotels continue to raise their prices as tourism is skyrocketing here. Even at u$s 125 a night...our prices are often times 1/2 or 1/3 the price of an expensive hotel. I saw several years ago this was a good business model and started luxury apartment rentals and many have copied my business model. I think many more will continue to. It's not an easy business though and very time intensive. In any idea you come up with for Argentina. Pitch it to your family and friends. Perfect it until each one of them tells you it's a good idea. Perfect it until most of them ask you if they can invest in your dream/idea. Don't make the move here until everyone tells you it's a good idea and no one can poke holes in your business plan. I do a lot of consulting helping people start businesses here and most of the ideas I hear are horrible. Unfortunately, most people I have to tell that their ideas wouldn't work or they won't make any money. Also, the ones that I have seen that are good ideas, the people are not well funded. It takes time to make money here so don't make the move until you have the money to follow through. Good luck all. | ||
| Roberto Board Administrator Username: Admin Post Number: 32 Registered: 12-2004 |
Last night CNN showcased Brazil. Some of the stats were truly appalling. Growth based on commodities rising prices. If anyone wants to discuss related subjects I just opened a thread on commodities in Argentina. I have also opened a new thread to specifically discuss real estate investments in Argentina. You guys seem to be fond of real estate down there... (Message edited by admin on June 28, 2005) | ||
| Anton Dekker New member Username: Anton Post Number: 3 Registered: 6-2005 |
Saint, though I agree that there is a lot of corruption in Argentina I don´t see how one can expect to attract investors, if expressions like "wild west" or crooks keep popping up. Pardon my bluntness, but I think you already made the point that you are honest and many others are not. But remember, you can't expect to atract investments based solely on YOUR honesty. I´m not arguing that there aren't crooks here, but there are plenty of honest guys too, and you can always take precautions, like I would with a an American or French associate, that surely would try to s... me if he saw an angle. I mentioned working for a british publisher, well this brit had the "argies do all the dirty work" for him. He reamined spotless as the bribing of the state contacts to get their books sold took place. And yes, I heard him talking about the corruption in this country. Hell of a hypocrite! Argentina is a high risk investment country, we all know that, that's why the profits are also high. You want no risk investments? Make a 1% year interest long term deposit in Switzerland. So are there investment opportunities in Argentina, sure. Is Real Estate the safest bet? Well maybe, if you are willing to wait either a year or 20. My parents' house lost 50% of its value in 25 years and it's in one of the best areas of northern Bs. As. I bought an apartment in 1985 for U$S 14.000 and sold it in 1995 for U$S 48.000. Now in 2005 it probably is worth U$S55k, so as you can see this is a roller coaster economy in some areas. How is the market now? Some people are paying upto U$S2.200 per m2 in the Puerto Madero district. They say that foreign investors bought land that represents the equivalent of the Bs. As province. Most of them bought it at the 1 to 1 rate. Imagine their faces in 2002!! Or even at the 1 to 1 rate it was dirt cheap? They say they want to privatize the Banco Nación, so they can execute all the mortgages and keep the land. This is a high risk country, but by no means can we compare it to Angola or any of the like. This country is like a cork, yes you can sink it as far down as you want, but eventually it will float up again. It just does. With Perón, Menem or Kirchner. Why? Private enterprise. The "collective individual" strength. True, a lot of the benefits of this individual strength is not shared, but even our corrupt officials end up buying luxurious houses/land HERE!! They say that argentines have the equivalent to the foreign debt stashed out abroad. Imagine if this REAL money, were to be reinvested here again. The country would literally explode. If you are going to invest in real estate then I agree with Saint, Palermo, Belgrano, Recoleta are niche areas, and flats are the best bet, just as long as you have them occupied otherwise the service costs can be shockingly high. Anything related to tourism is a safe bet too, because if the country is to expensive for us, its cheap for foreigners, and viceversa. So if you bought a small hotel, with say 30/40 bedrooms in Calafate or San Martin de los Andes, and you REALLY know how to run a hotel, then you could make a good deal, as the running costs are cheap. Remember labour costs are in pesos and in places like these you can charge in hard currency. Plus hotels have special hiring laws, as they foresee seasonality etc. And lets not kid ourselves, 50%/80% of the employees are not properly employed in this sector (they are either in "black" or their official salary is only a third of their real salary) Anyway, there are many other alternatives as the ones I've decided to explore, mainly in the service areas. E.g. Telemarketing companies are springing up like mushrooms here. The wife of a close friend of mine teaches english ("polishes" them up) to the "future telemarketers" (they have to have an Upper Intermediate level to begin with) She has been doing this for the last two years. Every 3 months she gets 30/40 new students. The people she works for, has another 10 teachers doing the same job. So there has to be something there. Each telemarketer gets around U$S400 per month, for a six hour a day shift. So in a nutshell, Argentina is now worth exploring, and some slam dunks are possible, but you'd have to be a Ginobili!! Many opportunities have already been scooped up by the most adventurous in 2002, who thought the dollar would reach the $ar 8/20 like "gurus" like Broda and many other had forecasted. It's now at 2.88 and only because the Central Bank keeps buying. In Brazil, in March the dollar was around 2.96 reales, ydy it closed at 2,37. Is this the next scenario for us? It is very likely. The IMF will eventually ask the Central Bank to stop "holding" the 2.88 value. Plus our main partner, Brazil can't continue trading with us under such a big currency gap. But having said this, Brazil has been the biggest investor in the last year. So maybe we should be making this forum in Portuguese? Eu acho que sería melhor!! Yep, got to be a step ahead. Next will try to learn Chinese!! So that's it for tonite. Hope something turns up eventually. Best, Anton. | ||
| Apartmentsba.com New member Username: Saint Post Number: 13 Registered: 5-2005 |
Anton, All your points are excellent. I would disagree about "service costs being shockingly high". Most fees here are shockingly low for Americans/Brits. Our fees in our home countries are shockingly high but not here. I assist many investors with purchasing here that aren't even renting out their places. Some I purchased last year and they never rented it out and they already sold for a good profit. Prices are headed up even further, IMHO. You make an excellent point about a small hotel in Calafate, San Martin de los Andes, Bariloche, etc. I have had such success I am sure that I could duplicate the same business that I have in Buenos Aires in Calafate, Bariloche and other areas where there are expensive hotels. Calafate is booked solid months in advance. You don't even have to buy an entire hotel or building. Just start buying individual properties (apartments) and make them luxurious. Furnish them nicely and offer good service. Hotels can't compete with the space and the amenities if you do it right. I'll probably start selling franchises of my business because of the unique opportunities in Argentina. Tourism will be around for quite some time here. Property will always be one of the safest investments here. With this business plan you are getting the best of both worlds. You are turning your property into a business. You have the safety and security of owning real estate here yet at the same time making up to 16% a year on the cash flow side with rentals. It's quite amazing. Even without the rental income, I believe property is a good investment in many areas of Argentina. Good luck. | ||
| Anton Dekker New member Username: Anton Post Number: 8 Registered: 6-2005 |
Hi Saint, you say tomatoe I say tomato, but anyway, guess if you look carefully there's a always a good deal to be struck in this blessed country. A possible scenario, if the macro conditions keeps steady, is that property will actually increase in value, and hence rentals, as there is a certain pressure from the IMF to drop the Central Bank dollar buying and let the exchange rate float, which actually means "sink" as there is a possibility that it will drop to 2.40 by the end of the year (as in Brazil now). This will be good for Real Estate revalorization, not so much for Tourism and Exports. So the pendulum always swings. So probably a lot of Real Estate operations should be going on now. Still plenty of dollars in the local "mattresses" (our equivalent to banks)Funny what a "cutting edge" banking system we have here!. Good luck with your franchises. Anton | ||
| Apartmentsba.com New member Username: Saint Post Number: 16 Registered: 5-2005 |
Yes Anton. The key is looking VERY closely. I see property values continuing to go up and I would bet that they continue that way for the next decade. As you mentioned, there are millions and millions of dollars on the sidelines and much of it is going into real estate. There are a lot of real estate transactions going on by both foreigners and locals alike which is further pushing up property prices. Honestly, I know everything has risk but I see it as one of the safest plays in Argentina as far as an investment goes. I've started a business plan to begin franchising my idea in other cities where I see luxury apartments working and competing head to head with hotels. Bariloche, Salta, Iguazu, Calafate are only to name a few. Basically, wherever there are expensive hotels I think you could compete. | ||
| Roberto Board Administrator Username: Admin Post Number: 50 Registered: 12-2004 |
I opened up a thread on franchises in Argentina in case you want to further discuss investment projects. I think Saint's project is a killer. | ||
| Anton Dekker New member Username: Anton Post Number: 10 Registered: 6-2005 |
Woah, Saint. A decade!! A decade in Argentina is a lifetime!! Don't know about that long. Remember there already is a lot of talk of a Real Estate bubble in all the world, so investors are cautious. And if we get too expensive, then foreign investors might decide to stay "at home" where the market is more predictable. Anyway, to each his own. I´m out of the market, trying to sell my assets so If you want to buy a house in San Fernando let me know!! Have a friend that has a flat in Nuñez for sale too. Can put you two in touch if you like. Maybe interested in your apt. for rent arrangement. Good luck with the franchises. Anton | ||
| Apartmentsba.com New member Username: Saint Post Number: 19 Registered: 5-2005 |
Thanks Anton. I'm not buying anything in Nunez. Honestly, I'm mainly only buying in Recoleta. Look at my business plan. I compete with the hotels. Look at where the Alvear Palace, Four Seasons, Caeser Park, Loi Suites - Recoleta, and the new Hyatt are located. They are ALL within blocks of one another. That is no coincidence. I'm mainly buying within several blocks of the Recoleta Village area. Nunez and other areas are simply too far for what I am doing. As far as a decade being a long time. I never see myself living in the USA again. Argentina is now home and I see myself living here the rest of my life. For as many faults as it has, it's a great country to live in if you are making greenbacks. | ||
| Anton Dekker New member Username: Anton Post Number: 11 Registered: 6-2005 |
Very true Saint, very true. "Stick to your knitting", that is one of the maxims in the book in Search of Excellence. "if you are making greenbacks" What about Euros? I hear they are quite attractive too. Here's an investment opportunity that isn't Recoleta but other investors are now developing: A Gay Friendly Area. I heard on the radio, that a famous catalan who has a 5 star hotel in Barcelona, has recently bought a plot of land in San Telmo (now considered a Gay Friendly Area, though BA is considered in international circuits as a Gay Friendly City) to build a 40 room 5 star hotel. What about that? There is a lot to be explored yet. San Telmo prices I believe are still quite low. This article said that prices in La Boca were about U$S206 m2, compared to 1000 in Belgrano and other "posh" areas. I guess San Telmo is around U$S500. For a neighbourhood that is within metres of the Pink House...that seems like a give away to me. Funny, I had my eyes set in San Telmo almost 15 years ago. I knew eventually the current had to swing south. Well, let's hope it lasts 10 years!!. Best, Anton | ||
| Apartmentsba.com New member Username: Saint Post Number: 20 Registered: 5-2005 |
Hi Anton, San Telmo I do believe has potential but prices are higher than you are quoting now. Also, I believe the capital appreciation potential of San Telmo merits more than cash flow potential. Personally, I'm looking to buy buildings in Recoleta and make an apartment hotel or B&B. Buenos Aires was recently ranked as one of the best gay friendly cities in the world. I'm not sure about the scene but I do have a lot of gay clients. Maybe up to 5% of our clients are gay males. I still am sticking to Recoleta. That area appeals to more people for first and second time visits. I did make an offer on properties in San Telmo for myself but the owners wanted more than I felt it was worth. I truly believe that many areas around the city will be prime for capital appreciation potential but personally I believe that properties in Recoleta will always be more marketable when I go to sell the properties. A good apartment that is less than 100 sq. meters in Recoleta is as good as having cash in the bank to me. It's very liquid and there are a lot of buyers out there. An apartment or building in San Telmo is harder to "move". Let's face it...Recoleta will always be "Recoleta". The city will never let it go to crap. | ||
| Roberto Board Administrator Username: Admin Post Number: 53 Registered: 12-2004 |
> Recoleta will always be "Recoleta". Saint, you almost sound like an argentine... You should also check 'barrio parque', if you've never heard about it. You are going to like it (as well as your clients)... only 5 minutes from Recoleta. We just had an inquiry from some american honeymooners. They rented and apt. there. But we are talking an upgrade. | ||
| Apartmentsba.com Junior Member Username: Saint Post Number: 26 Registered: 5-2005 |
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