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IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
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person.
Since it's release in January of 2006, the magazine has been well received and
continues to gain momentum and support. The education, information, and
networking opportunities for the real estate investor has been long neglected.
No More!
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INTERNATIONAL INVESTING – PART II
By
Crystal Harvey
Picture
this: it is late evening and I am lounging at a rooftop bar sipping a
martini after a full day of fun in the sun as I now take in the amazing
view of the sunset. I began the day awakened by the soothing sounds of
tropical birds. I enjoy a fabulous breakfast that includes some of the
most delicious fruits beyond my taste buds' expectations surrounded by the
sweet aromas of exotic flowers that stimulated my every senses. I spend
the day strolling through the rain forest and after, I take in a soak in
the hot tub and a massage at the spa. I am on vacation in one of the most
beautiful destinations on earth. I have done this for myself many, many
times in the past where I have vacationed in tropical havens on earth.
Every time I have said that I could and should live in a place like this
for the rest of my life. Many people are now doing just that.
The
places that buyers and investors have called their favorite vacation spots
have now become their investment opportunities. The National Association
of Realtors® conducts regular reports on the level of foreign investments
within the Unites States. In light of the growing trend for U.S. citizens
to invest in foreign real estate, the NAR has begun to research and
collect such additional data. According to a November 2007 report,
“Americans Buying Homes Abroad: Trend Indicators And Some Initial
Estimates” this data is somewhat difficult to compile. First, the
difficulties lie in the fact that most Realtors® don't broker properties
outside of the United States. Secondly, the difficulty in gathering this
type of data is that other non-U.S. real estate professionals that have
cooperative relationships with the NAR do not necessarily survey their
members about their business with American buyers of properties outside of
the United States. Additionally, although the U.S. Census Bureau asks
whether or not the household lives in a rented or owned domicile, it does
not inquire whether the household owns foreign-based properties.
This
very useful report was written for the Research Division of the NAR by
Frederick E. Flick, PhD., a Real Estate Economics Consultant and Lawrence
Yun, PhD., a NAR Senior Economist and Managing Director of Quantitative
Research. The results of the report are said to be “just a start of the
process to measure that level of home buying by Americans abroad.” The
information gathered is compiled from information reported from the U.S.
State Department, the Social Security Administration, and the Internal
Revenue Services. As a result of the information gathered, it can be
estimated that there are as many as 500,000 to 600,000 foreign properties
owned by Americans living abroad. The report also suggests that from the
stated resources, the domestic demand for vacation and short-stay foreign
properties may be in the range of 370,000 to 440,000 units with
approximately 150,000 foreign properties being owned by retirees and
Americans working in foreign countries. In addition, according to the
2007 NAR Member profile, one third of Realtors® had at least some business
with international clients in 2006 which encompasses real estate activity
both in the United States and abroad. Both of these reports can be found
on the National Association of Realtors® website:
www.Realtor.org with additional links
on international real estate data including
www.WorldProperties.com.
The
featured destination spot for this article is Jaco Beach, Costa Rica.
Jaco Beach is located in a biological diverse area of the Central Pacific
Coast. According to the Research Division of NAR, as of December 2005,
Costa Rica is one of the top 25 countries where Social Security retirement
benefits for recipients living/working abroad are received. The climate is
Spring-like weather from May to October and summer from November to April.
It is the closet beach to Juan Santamaria's International airport and just
90 minutes away from San Jose, Costa Rica's capital. This location is
close to national parks, rain forests, waterfalls and lush green
mountains.
The
featured project is the Wyndham Garden. This is another development that
is being co-marketed by American Invsco Realty, Inc. The development is a
hotel/condominium project consisting of two towers joined by a glass
bridge. There is a rooftop bar which is the first in Costa Rica beaches.
It has 136 residences with a wide array of services and amenities. It
is one of only two fully-titled beachfront properties in all of Costa
Rica.
Costa
Rica offers a stable government that embraces visitors and a range of
residency options. It has become a safe haven for companies and investors
from all over the world. The political system is democratic and there has
been no army since 1948. The property laws for nationals and foreigners
are the same. An investor does not need to live in the country to own
land or property. Furthermore, there is no property tax. All property
titles are registered with the Registro Publico.
Over 1
million tourists visit Costa Rica each year to explore some of the last
completely unspoiled natural habitats in the world. Costa Ricans or
“ticos” as they are nicknamed, place education, medicine and ecological
care to the highest importance in their way of life and are recognized
worldwide for their immeasurable hospitality. The official language of
Costa Rica is Spanish. However, English is widely spoken. The currency is
the Colon but the U.S. dollar and major credit cards are accepted almost
everywhere. The major industries include tourism and agriculture with
coffee, sugar, cane and flowers as the major commodities.
Grupo
Rica Costa is the developer of the Wyndham Garden project. They have
developed projects in Miami such as the Solaris at Brickell, Douglas
Place, and the Mediterranean. The proprietor of the development company,
Senor Fruand is a native of Nicaragua and had been very successful in
business but because of political turmoil, he chose to leave the country.
He then learned the textile business where he worked very hard and once
again enjoyed great business success. Finally, he landed in Costa Rica
and through a friend began to learn the business of land development and
construction and is now one of the most prestigious hotel/condominium
developers in Florida and Costa Rica.
The
residential features of the Wyndham Garden Jaco Beach are as amazing as
the views. They are all fully furnished with Poggenpohl stainless steel
kitchens and top quality finishes in contemporary design. There are ocean
sunrise and sunset views from every room in every unit. The Wyndham has
the biggest and most complete reservation system in the world. The area
is reported to be a hurricane and tornado safe haven. Less than five
minutes away there is an 18-hole golf course and world class marina.There
are 1-, 2-, and 3-bed-room units that range from $300K to $800K. The
construction of the towers is scheduled to begin the first of 2008 with
delivery expected for late 2009.
The
floor plans for these units are amazing. The 1-bedroom units are
approximately 950 square feet and have terraces off the bedroom and
living/dining room areas. The 2-bedroom units have two baths and are
approximately 1470 square feet. The 3-bedroom units have 2/3 baths and a
unique feature for the third bedroom that can be locked off. It is an
office suite with private bath. The idea is that as an investment unit
where the owner frequently uses the unit personally, this office can be
excluded from the rental agreement. Therefore, the owner can secure
his/her personal items within the office suite that they choose not to
transport during the time the unit is being otherwise occupied by
tenants. These units are approximately 2150 square feet of amazing space
with multiple terraces that have fabulous views from every room. The
flooring material for the terraces is glazed porcelain stoneware that can
also be used as flooring throughout the unit.
As a
realtor, besides the beauty of the development and all that it has to
offer, I was blown away at the commission structure in place for the
project. The developer is paying 6% total commission wherewith every
deposit the agent(s) is paid. There is a 30% deposit required which is
split up into three deposits. Therefore, with the initial 10% that
accompanies the contract, the agent will receive 25% of the deposit in
commission. The agent would also receive 25% of the next two deposits.
The second deposit is due three months after the contract and the third
deposit is due six months after the second. The remainder of the
commission would be paid at closing. The agent would be compensated
throughout the contract phase up to closing. Fee simple title is being
transferred to the investor/owners. Stewart Title of Costa Rica will close
all transactions.
Through
this relationship, American Invsco Realty, Inc. has been very instrumental
in the due diligence portion of the deal. We assisted in the registration
requirements statewide for U.S. citizens. The country practices a “first
in time, first in rights” policy as reported in International Living, that
strongly suggests that anyone who has an interest in investing in Costa
Rica hire an attorney that is seasoned in foreign title procedures as well
as an experienced real estate broker. American Invsco was also
instrumental in helping the developer to establish a “Fly & Buy” program
for pre-qualified U.S. investor/buyers.
Here is
another example of an international real estate investment opportunity.
Again, the focus of this series is to encourage investors to look outside
of the box when it comes to the locations of their investments. The intent
is to also provide additional creative ideas for the real estate
professional as to other markets that may become profitable not only for
their prospective clients, but for their personal investment gain as well.
The real estate industry is rapidly recognizing that globalization is as
much of a factor in real estate as it is for the labor markets, trade, and
the financial sectors of the world’s economies. Happy Investing!
****************************************************************
Crystal
Harvey is a Real Estate Consultant for American Invsco, Realty, Inc. She
can be contacted at Crystal.Harvey@americaninvsco.net or (312) 595-4838
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