Rising Real Estate Prices

[Escott]

While no one can predict the future, I believe you are closer to reality than the rosy pictures most are painting.

There are good times coming but not before it gets worse. I personally believe it will be several years before it gets better. My guess is, it will be 5 - 8 years before the situation improves.

What would your explanation for the rise in prices on the North Coast then? I bought a lot for 15k which the seller paid 36k from the developer. Now all the lots have sold for 2$ a meter more than the 36k paid by the seller. That is almost a triple in value from Mar. 03 to July 04. Now all of the original lots in the immediate area have been sold and are being built on.

Possibly because it is a resort area helps this market because it doesn't go with the Dominican economy because of all the foreign money coming in?

I paint no pictures. I am not a seller but a buyer and have nothing to gain. I have real experience and speak to many people every day that come to this town (Sosua/Cabarete) looking to purchase.

I am curious to hear what your qualifications along with Harmony's are. Without knowing it is hard to put a value judgement on your opinions so perhaps you can share your background with us. We get a new doom and gloomer every couple of months on here. Remember Lurker? He was telling everyone including me that I was going to lose more on that 15k lot than the guy I bought it from who paid 36k which was a hoot.

I wouldn't take business advice from someone who goes Bankrupt and blames it on all the others just like I wouldnt take real estate advice from someone who has no experience or on sight knowledge regarding this area.

 

[timelessdreams]

Land Reform?

Some odd 7 years ago, when the government closed down all the bars in the North coast tourist towns, in an effort to control the rampant prostitution, tourist towns died and there was a mass exodus of ex-pats and the real estate prices took a big plunge.

Since I am agnostic in some areas of government reform, please bear with me as I raise this question?

"Any chance of 'land reform' such as the one depicted in Zimbabwe recently?"

Quote from the Associated Press on June 20, 2004.
~Citing a letter by Foreign Ministry official Joe Bimha to Zimbabwe embassies abroad, the Sunday Mail reported that the government would be nationalizing only the land it had seized under its land reform program.

"The correct position is that all land acquired under the current phase of the land reform program now reposes to the state," Bimha was quoted as saying.

The report clarifies a June 8 statement by Land Reform Minister John Nkomo that title deeds to all productive land were being abolished and replaced with 99-year state-issued leases.

Nkomo's statement raised fears of massive new seizures of farms, industrial holdings, private properties and even homes.

"In the end, there shall be no such thing as private land," Nkomo had said. `

Mostly farmland, but private homes and property titles were seized and now have to pay 'rent' to the government for land that was rightfully theirs!

If the government has the control to close down private business and or property in the attempt to control what is considered 'legal' in the DR, what guarantees that this won't happen in a desparate attempt to improve the DR economy?... say, rather than tax bill reform that would otherwise be rejected?

In other words, is there any danger of the DR government acting in such a manner?

Thanks for your comments!
Susie

 

[Escott]

Sure the DR government can do this. Only problem is that the US Marines would be back in a heartbeat

I don't think the DR would be that stupid nor have they elected a government that would lean in that direction. The present government in my opinion which goes out next month would have been more suspect.

Scott

 

[Lambada]

I agree. The existing government, PRD, ran on a "socialist" ticket (technically!) & therefore, land nationalisation would have been much more likely under them than under the incoming government. When we first arrived here, there was a law which covered deportation of foreigners & consequent reversion of their property to the government. Not sure if this still exists? But you had to have done something pretty bad to put yourself at risk of deportation!

 

[KenoshaChris]

Zimbabwe?

We're talking about RD, not Cuba. Prior to buying in another country, one of my concerns was if there was a chance of the government nationalizing my property. I wouldn't dream of it now. Going back on topic, more and more North Americans, particularly those from the USA are learning about RD and the opportunities that exist. This man's opinion is that North Coast real estate prices were at their lowest around April/May of 2003. They've increased significantly since then. Up here in Wisconsin, I'm on the water looking out at the Kenosha harbor and I've appreciated about 18% in the last two years. I believe I've appreciated at an even higher rate on the North Coast. Location, location, location. Sosua/Cabarete has it.

 

[gringo in dr]

What would your explanation for the rise in prices on the North Coast then? I bought a lot for 15k which the seller paid 36k from the developer. Now all the lots have sold for 2$ a meter more than the 36k paid by the seller. That is almost a triple in value from Mar. 03 to July 04. Now all of the original lots in the immediate area have been sold and are being built on.

Possibly because it is a resort area helps this market because it doesn't go with the Dominican economy because of all the foreign money coming in?

I paint no pictures. I am not a seller but a buyer and have nothing to gain. I have real experience and speak to many people every day that come to this town (Sosua/Cabarete) looking to purchase.

I am curious to hear what your qualifications along with Harmony's are. Without knowing it is hard to put a value judgement on your opinions so perhaps you can share your background with us. We get a new doom and gloomer every couple of months on here. Remember Lurker? He was telling everyone including me that I was going to lose more on that 15k lot than the guy I bought it from who paid 36k which was a hoot.

I wouldn't take business advice from someone who goes Bankrupt and blames it on all the others just like I wouldnt take real estate advice from someone who has no experience or on sight knowledge regarding this area.

There will always be a fresh batch of people looking to move/retire here. That is the natural of living on a tropical island. Some of those people will obviously not adjust to life in a new culture. You are in effect, buying those properties and selling them to the next batch. Nothing wrong with that. You are in an excellent position to take advantage of the turn over. I'm not suggesting that you will loose money. Your track record speaks for itself.

You are dealing with property that is mostly bought by foreignors. Of course that sector will not be depressed, as is the rest of the country. For the country as a whole, rock bottom is still a long way off. Inflation, devaluation of the peso will continue. Leonel knows he is in for some bad times. He has already stated that he will not pay the interest on the central bank cd's. He is also considering TAXING those cd's. Hard tactics for hard times.

 

[Escott]

There will always be a fresh batch of people looking to move/retire here. That is the natural of living on a tropical island. Some of those people will obviously not adjust to life in a new culture. You are in effect, buying those properties and selling them to the next batch. Nothing wrong with that. You are in an excellent position to take advantage of the turn over. I'm not suggesting that you will loose money. Your track record speaks for itself.

You are dealing with property that is mostly bought by foreignors. Of course that sector will not be depressed, as is the rest of the country. For the country as a whole, rock bottom is still a long way off. Inflation, devaluation of the peso will continue. Leonel knows he is in for some bad times. He has already stated that he will not pay the interest on the central bank cd's. He is also considering TAXING those cd's. Hard tactics for hard times.

I have always preached that the best time to buy real estate is when things look the worst. We knew that Leonel was in for a tough ride from the start and that some hard decisions have to be made. For the Dominican people as a whole I see tougher times ahead but I don't think Real Estate is going to crash, nor do I think anyone with a dollar based income will suffer much.

Paying 51% on CD's and those that bought them were looking at fools gold. I never thought that could possibly work. Not now and not when they were offered. I also thought that people were taking a big risk on Baninter when they were paying a much higher rate than the rest of the banks and then Mercantile for the same reasons. Greed will burn you every time.

Harmony saying that Real Estate prices will suffer because of the economy is just silly. Real Estate becomes a safe haven and prices rise. Scared money either leaves the country or goes into Real Estate.

I remember trying to get Golo into a conversation a few years ago about real estate prices in the DR but couldnt but would have enjoyed hearing his take but he didn't reply.

I have always kept my investments in a tight area even when in the US because it is impossible to become an expert for the entire country since things are so different even between Sosua and Puerto Plata and it would be impossible to stay on top of it. Hell I called about a 2000 meter piece in Sosua and was amazed at the 95$ per sq. Meter price I was quoted and thought I had this town down pat.

 

[Harmony]

You may be right Escott. I certainly don't know all the answers. Being a contrarian in the past has helped me a lot and I can't find too many people who are bearish on real estate. The rate increases of late have been supersonic; helped in the U.S. by artifically low interest rates. In the DR I assume most purchases are made in cash so may be quite different situation.

My thoughts on DR prices is based solely on the economy. If people have to sell its usually a buyer's market.

Harmony

 

[Escott]

You may be right Escott. I certainly don't know all the answers. Being a contrarian in the past has helped me a lot and I can't find too many people who are bearish on real estate. The rate increases of late have been supersonic; helped in the U.S. by artifically low interest rates. In the DR I assume most purchases are made in cash so may be quite different situation.

My thoughts on DR prices is based solely on the economy. If people have to sell its usually a buyer's market.

Harmony

What is your history in the DR Harmony? How much do you know about this country? What is your experience in Real Estate? Have you been involved in R.E. in the DR or other places?

I was going to buy a condo in 1970 in FT. Lee NJ in a complex built on Palisades amusement park property just incase anyone is as old as I am and remembers the place. Cost was 42k for a 2b/2bath river view condo with 4.25 % financing with 10% down. I also considered renting at the Colony which was the most lux building in the entire state at the time.

My mother said rent at the colony, real estate prices were going to crash. I listened to my chagrin. Needless to say the condo was selling for 500k 10 years later and I have been buying all the real estate I can afford since then. Matter of fact I retired a few years ago in the states and live very comfortably in the DR and still have about a bunch left in the States to sell.

I always take Naysayers with a grain of salt ever since I listened to my mother. I did kill her and bury her in the back yard after it hit 400k in value and I missed the boat.

 

[Simon & Nicky]

No expert either but....

All the real estate agents will tell you the same thing: There is no decent property left for sale here in the Sosua Cabarete area. Consequently people who want to realize their dream have to buy land and build. I'm no Economist but I do remember my basics regarding supply and demand.

I often chirp on about the UK property market but it is certainly worth considering. Uk prices were never cheap in comparison with somewhere like Florida. I think I bought my last house in the UK for 135k pounds and sold it two years later for 335K pounds (nearly 400000 dollars profit). I could easily have borrowed money on my house in the UK (at 3.5% if you played your cards right) to finance the purchase of a holiday home here and barely notice the increase in my mortgage payments, which I could have off-set with the rental income from the house over here. With pension policies in the UK now being worth peanuts plenty of British people are here looking to do just that as an investment for the future. I am not one of those people but I certainly considered it. The world does extend beyond North America and there will always be new Gringos! Prices here will continue to rise until the near global house price boom goes belly up.

 

[Harmony]

"What is your history in the DR Harmony? How much do you know about this country? What is your experience in Real Estate? Have you been involved in R.E. in the DR or other places?"

Escott,

I have been a financial advisor with major firms in the U.S. for over thirty years. Past president of two bank affiliated subsidiaries. Have invested in real estate in six countries in addition to U.S. Helped form two REITs. Only lost money on one piece of real estate. That was in Angola Africa which still looks attractive to me. Have only been to the DR twice, a month each. I think the DR is a great place but the economy/political situation has major problems which have to be resolved.

I would rather not get into a tirade about why I feel as I do. I recently sold two pieces of real estate and placed the funds into gold and silver. Maybe I'm being reincarnated as your mother. No disrespect.

Harmony

 

[Escott]

"What is your history in the DR Harmony? How much do you know about this country? What is your experience in Real Estate? Have you been involved in R.E. in the DR or other places?"

Escott,

I have been a financial advisor with major firms in the U.S. for over thirty years. Past president of two bank affiliated subsidiaries. Have invested in real estate in six countries in addition to U.S. Helped form two REITs. Only lost money on one piece of real estate. That was in Angola Africa which still looks attractive to me. Have only been to the DR twice, a month each. I think the DR is a great place but the economy/political situation has major problems which have to be resolved.

I would rather not get into a tirade about why I feel as I do. I recently sold two pieces of real estate and placed the funds into gold and silver. Maybe I'm being reincarnated as your mother. No disrespect.

Harmony

Gold and silver? Hee, you could have been my mother
She did bonds ONLY.

That is as interesting as watching paint dry. I would rather lose my money in Real Estate and have been in the game. I love dirt. Love touching it, eating it and making love to it.

I have a little experiehnce with Reits. Those are the only stocks I have bought in the last 4 years to buy and hold. Starting to sell them out now. Cycle for interest rates are changing.

You bought R.E. in Angola? You sound like a guy with gigantic cajones.

Unlike you I have kept my circle of investments close. In NY I only bought real estate in one county. I bought and sold 50 pieces of real estate and retired nicely at an early age because of this. My main income comes from holding mortgages on the last 10 properties at 8-8.5% based on 30 years with 5-7 year balloons or straight interest only and then payment.

In the DR I have only invested in the Sosua/Cabarete area. I find it difficult to become an expert on a whole country or even a whole state and also find management difficult when all the property is in the same town.

I have been only accumulating properties and havent sold any in the DR. I think that there is going to be a great upside compared to NY in the late 70's or post 9-11 upstate NY when the NY'ers either fled or purchased and escape property. I think the best time to buy is when things seem the bleakest. All the cards are on the table now. We even expect the old government to obscond with all the paper clips before they leave office in less than a month. I also see tourism on the rise and US citizens discovering the DR.

Before 9-11 I was one of the few Americans in Sosua. Not the only gringo by far but there were loads of Canucks, Brits and other Euros but no Americans till recently. Prices have doubled just about on the North Coast from Sosua to Cabarete in the last year and a half.

If you do a search under Jazzcom (my old handle) I was preaching NOT buying R.E. in the DR for years. I even did speadsheets supporting my views by showing how many bottles of Presidente's you would make if you listened to me and rented and not bought here.

I changed my mind about 1.5 years ago and have been explaining that away since. I got knocked around a bit but history will show you that my predictions were spot on.

You were in insurance?

Scott

 

[Harmony]

"You were in insurance?"

Scott,

I was (still am) primarily in stocks & bonds. As for Angola, I was in diplomatic corps at the Consul General in Luanda. Had a lovely place over-looking bay and beyond that the ocean. Thought the civil war was coming to a close and with all the oil it would get better. It was Portugese colony. Well, the war got worse and things turned to "s _ _ _". It's cooling down again now.

Maybe we can get together the next time I'm down for a Presidente.

Harmony

 

[Escott]

Would love to. I am on the North Coast and my number is 223-1178.

Let me know when you are coming because I go to the states every couple of months. I held mortgages and need to pick up money because I get broke Will be in NY most of October with family thing and a High School reunion and not return till about the 25th.

 

[gjsuk]

East of Cabarete beachfront

It was a tiny lot with a crappy house on it and I wasn't in love with it. Matter of fact I didn't even like the place. Sat right on the road with NO privacy. Not much potential either.


The above was posted towards the end of last year by one of this forums resident real estate investment experts who has over 30 years real estate experience allegedly.

The crappy house sitting on tiny lot in question was sold then for $80,000, after extensive renovations this property has sold in recent days for $375,000.

Would guesstimate this guy doubled his money in a little over 6 months.

Not much potential there then?

 

[Escott]

hahaha, I put an offer on the property and would have bought it but I didn't like it. I definately would have made money on the property because that is what I do.

Exactly what is your point?

Do you know how much they put into the project?

Someone in Cabarete with the first name of Paul said I got screwed on the deal but there were plenty of other deals to put money in and still are. I don't have to make every deal.

I don't think that anyone who knows the deals I have made will say I have made any bad deals. Most of the people in the R.E. investing game are doing well since the area has been taking off. At that point it wasn't screaming like it was after.

 

[johne]

Just curious

It was a tiny lot with a crappy house on it and I wasn't in love with it. Matter of fact I didn't even like the place. Sat right on the road with NO privacy. Not much potential either.


The above was posted towards the end of last year by one of this forums resident real estate investment experts who has over 30 years real estate experience allegedly.

The crappy house sitting on tiny lot in question was sold then for $80,000, after extensive renovations this property has sold in recent days for $375,000.

Would guesstimate this guy doubled his money in a little over 6 months.

Not much potential there then?

Just curious as to your interest in this and why second guessing another's decisions is important to you.Do you have an agenda that somehow I'm missing?( ie: "allegedly") Just curious because real estate is my business and Scott is a friend of mine with a whole lot of experience and I learn from him all the time. Scott is the man!!

JOHN

 

[Paul Thate]

cabarete real estate

Someone in Cabarete with the first name of Paul said I got screwed on the .

I was that Paul.

The finer details were.
You were screwed because your real-estate agent allegedly did not show the offer you made to the seller. This was the reason why you did not get the property. You ask for the cost of the improvement he made .? My guess not more the 60 or 70 thousand .Giving him a profit of over 200 000 dollars.
While that was my neighbor from hell the way he behaved I must congratulate him . He did a fantastic deal, in no more then 6 months. What a return on investment. Actually He had a vision.
Maybe this person should be our resident expert instead of you.
Plus I thank him for it. Based on that deal I have now a proven value for
neighborhood houses sold. It now values my house.

I PM ed all this info to you. You could and probably have confirmed the validity of all my statements . But for personal reasons choose to ignore them.
But you continue you advertise the services of this person. That's wrong, morally wrong.

When I brought up these facts a while ago Robert , the owner of this board
criticized me severely. He accused me of attacking you but he allowed you to continue to advertise for this un ethical person.
Without verifying my or your statements. This was unfair to me and more so
unfair to his readers.
I have been living here in the DR , have been an owner for over 8 years.
I learned how to live here over the years the hard way and probably made many mistakes.
But I learned I have many experiences that many forum readers could benefit from.
But I was criticizing the innercircle and that seems to be a NONO .
You however lived here a few years only at best or even part time and still have an lot to learn.

This was the reason why I lost interest in posting to this forum.

When you mentioned my name in your post I was forced to respond.

By now it seems clear that if you are not a member of the inner circle
Scott, Ken , Rocky, Larry, AZB etc one will be silenced if it does not suit
the agenda of the inner group.

Many of the old members stopped posting for this reason.
It even created a new forum..

It seems to me that a little open mind from the owner would have saved him some trouble .
And we would still have a united board with members that respect each others.

Look at the fighting that seems to go on.
And Scott it seems you are in the middle of it all.
You do not do your friend Robert any favors or any of us readers and contributors.
Take some time of learn to be pleasant and get some local experience.

 

[Ken]

Hey, Paul, if you have a bone to pick with Scott, leave me out of it.

Regarding the supposed "inner circle", that's a laugh. At least if there is one, I am not part of it.

If we all dropped out because we were offended by something, who would be here to answer the legitimate questions of the newcomers.

 

[gjsuk]

Duh

Exactly what is your point?

The thread is about rising real estate pricing is it not?

I was told about the purchase the other day and recalled your comments about the property.

Doesn't it validate the majority opinion that North Coast real estate is booming even on crappy houses with not much potential?