Investing in the DR...Robert

Escott

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Jan 14, 2002
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Robert,

I am in email conversations to the tune of 12 pieces a day regarding investing in the Dominican Republic. How about a sub catagory under business called "DR INVESTING"?

I think that there is enough of an interest here for that catagory to do ok.

What say you?
 

GNYC

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Oct 8, 2002
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Sounds like a great idea to me Jazz.

I have not been part of any e-mail coversations but alot of us have interests regarding the DR economy, investing, currency conversions, real estate, the soundness of various DR banks and finance houses, etc.

I'm sure the veterans could provide a wealth of information to those of us who do not have the experience.

GNYC
 

Keith&Cris

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A great idea! I will be looking to purchase some property in the DR in the near future and would like to start gathering information now. I met some people who currently own quite a bit of property there, and are looking to sell. I also met a very good realtor, so I can contribute some info on this topic.
 

AnnaC

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Jan 2, 2002
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Jazzy let's give it a try here for now. Would you say this is or isn't a good time to invest in the DR. What would suggest? Property? Put the money in the bank and wait? Sit tight for now?
Let's see how this thread goes. Could be interesting
 

Ken

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Jan 1, 2002
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Seems to me there could be a lot of confusion about what to post in the "business" section and what to post in the "investment" section. A better solution might be to combine the two into a "business & investment" section.
 

Escott

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Well we have numerous threads about banks, real estate and commercial paper, interest rates etc. that can be combined under the heading of "Investing in the DR". We get a lot of threads about specific business questions and I think it would be better to separate them.

I get email every day asking me about posts that I had made as far back as a month ago. I just think that it would be better to have a catagory with investin insights instead of different threads in Living, Business and Legal. I know that it would make for easier research. Well you all know what opinions are like and I know mine is just like everyone elses. Go figger...
 

sjh

aka - shadley
Jan 1, 2002
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Tony C,

if you really believe that, go borrow all the pesos you can, convert them to US at the going rate (22?) wait 8 months and convert them back. You will lose 3% per month or about 25% over 8 months to interest payments and come out 16% ahead. If you put the USD in a dominican bank at 1% you will come out at 24% profit in 8 months.

Stephen
 

Escott

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Sorry Shad but you cannot borrow Pesos at 22% in the DR. Rates are much higher skewing your numbers.

People are overlooking the fact that you can get outragous interest in US Dollars and I feel that is the place to be and not PESOS. I still think that the envirnment and the country is safe for the near term and don't think it will go the way of Argentina or Ecuador before.
 
A

americano

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I think "investment" would be a good category. It would definately get my attention. I agree with JAZZY
 

GNYC

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Jazz and others, I would like to reiterate Anna's question while expanding it a bit.

If one has a risk tolerance of 25% is it a good time to invest in the DR taking everything thats going on into consideration.
If so is it property, hold it in the bank (which currency), finance co's or leave in in the USA.

Does the current risk/reward situation favor the DR investor with some risk tolerance or would you stay clear of the whole situation.

GNYC
 

Escott

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Gene, personally I think that "IF" you were to invest I would first of all advise you to invest in US dollars in the DR because the inflation regarding the Peso is such a wild card and the difference in rates does not make me feel warm and fuzzy enough to chance it. Secondly you get higher rates with the finance houses than in the banks.

My big fear is if things get real bad real quickly the government can do " a taking " of your dollars in the banks but NOT in the finance houses because they do NOT have the same regulatory control over private business.

I am specifically talking about the situation that went on in Argentina and before that Ecuador. I "do NOT" think that it is going to happen in the near future but as we all have seen things can disintergrate quickly once a country goes into that finantial Death Spiral.

Well thats what I do and if I didn't think it best I would have done differently.

As far as real estate goes I think you can make a decent return in the right situations but I don't think it is worth the effort. You can make a better return on just interest without the worry or the need to sell it in the future. Real Estate has NOT appreciated where I have looked and has in fact depreciated. So if you aren't making out BETTER than just getting interest and the long term capital gains do not justify making less on the income why do it?

I think that if you were to buy Beachfront you may do better than on income property but there is no income just the capital gains at the end when you sell it. I have friends that invest in Agriculture and I have heard good things but it is not a place I feel comfortable in without living there full time.

The commercial paper I have run across is decent but it is in Pesos which scare the bejesus out of me. I have posted my feelings a year ago before the big hit on the peso that I thought it safer to be in dollars for the large part albeit had you been in pesos you would have done better historically over the previous ten years.

Opinions are just like assholes, everyone has one. Take it for what it is worth and do your own research to make yourself comfortable. Do NOT depend on DR1 message board for your financial decisions or any other message board for that matter. Most people don't know me nor are able to judge the opinions I put forth. That is why I would like a forum on the topic of investing so we can pick up from others to refine our strategies.

I rest.
 

Keith&Cris

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Investment potential, cost effectiveness, return on investment, profit potential, percentage points, risk tolerance... these are concepts important to the profit purists, the investment moguls ... but for me, I would like to see grass roots information relavent to the "regular joe" who wants to buy a little piece of DR for his/her own personal love of the land and enjoyment of a small piece of paradise.
 
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Escott

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There is nothing wrong with putting money in a SECOND home in my opinion as long as you don't look at it as an investment instead of looking at it as a pleasure. While in my opinion maybe it won't be a great investment it is worth it if it gives you the pleasure you deserve and worked so hard to achieve. I spent too many years of my life not reaching for the pleasure.

I have been in the Real Estate business in the States since 77' and I love dirt, wood and concrete in every form. I have turned a buck in Real Estate in many ways. I once bought a piece of dirt that was 15 acres that was also LANDLOCKED. I paid 5k for this USELESS piece of property (in the hands of the seller) and attached it to another piece of 35 acres I owned, sold the timber for 25K off the 15 acres and 80k off the 35 acres, then eventually donated the 50 acres to a Church Camp and got a 400k tax writeoff which I needed in order to writeoff profits from other RE sales where I had big profits in. I did better than selling the land, the kids got a bigger piece of paradise, the seller got a few bucks for property that all he could do was to pay taxes on. Good deal all around. Between not having to pay a sales commission, capitol gains on the increase in value, saving 200k in taxes I otherwise would have had to pay I made more than I would have on selling the land. (man am I proud of myself)

I sold 6 pieces of property so far this year and have 2 more already with an agreed upon price and contract but waiting to close on them. Probably not until next year which is ok because I have time to use the 400k writeoff.
 

Escott

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GNYC said:

If one has a risk tolerance of 25% is it a good time to invest in the DR taking everything thats going on into consideration.
If so is it property, hold it in the bank (which currency), finance co's or leave in in the USA.

Does the current risk/reward situation favor the DR investor with some risk tolerance or would you stay clear of the whole situation.

GNYC

I wouldn't put the whole enchilata in the DR Gene. I would only put a reasonable percentage in that would allow you to recover if things didnt work out right for you. You need to get your feet wet and don't have to do that with a lot of money.

I started out with bringing 10k down and buying bank CD's. Waited 3 months and went to the bank for my money. Took their check to another bank and opened another. I wanted to make sure that the check would even be negotiable:) Brought more money and did this for a short time with no problems. It took about 8 months till I stepped up to the plate swinging. If you have doubts, just start slowly.

Friends have told me how to take a Million dollars back from the DR from being in business Gene and I am going to share it with you for free. Take 2 million down with you, lose 1 million quickly and take the remainder home. That is the one sure way to succeed in the task there. I took this to heart and will NOT go into business there until I am REAL comfortable with their ways and business practices. I have heard too many stories about people being ripped even by expats.
 

sjh

aka - shadley
Jan 1, 2002
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Jazz if you reread my message I said to borrow pesos at 3% per month and the current exchange is at 22.... My numbers are correct...