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Friday, April 16, 2010

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Dear Reader,

If you have been following these dispatches, you know I am bullish on Sian Ka’an. This is the condo hotel deal on Mexico’s Riviera Maya. I like this deal because it offers a strong fixed rental income with the prospect for capital appreciation. There are still a small number of units available for $164,000.

There is another benefit to buying here that I haven’t told you about. Until now, that is.

As an owner, you can stay in your unit (or any available unit) whenever you want, and for however long you want. You can enjoy “Premium All-Inclusive” benefits such as access to the amenities of the resorts three hotels—3 different shows each night, Kids Club, tennis courts, fitness center, bicycles. You eat and drink for free in ten gourmet restaurants. You can enjoy every inch of the 13 swimming pools and 1.5 km of beach.

The cost to an owner for all of this: just the nightly all-inclusive supplement. For six months of the year, this is only $60 per person per night. Of course, this also includes your standard vacation property costs like daily maid service, electric, water, cable TV, internet and property maintenance.

Better yet, the resort will just deduct this amount from the quarterly rent check you are paid as an owner.

Another nice benefit owners are entitled to is a 35% discount off the rack rate price at any Gran Bahia Resort worldwide. Now you can travel the world as a Sian Ka’an owner for much less. Moreover, while you are traveling, your Sian Ka’an property is managed and maintained at no cost to you by one of the strongest hoteliers in the world!

I’ve just returned from a 10-day trip to this resort. I had a great time. The investment opportunities here are strong. It’s a major bonus that this is a place I would like to spend my vacation time. Phases 1 and 2 are almost sold-out. I strongly urge you to request a full information pack today.

Meantime, to remind you about this deal, and to see some video I took on my trip, read on:

The Gran Bahia Principe is located close to Tulum on Mexico’s stunning Maya Riviera, 23 minutes from Playa del Carmen, and just over an hour from Cancun airport. It boasts all the amenities you would expect from a resort of this quality and size.

The 27-hole Robert Trent Jones golf course opened late last year. The course is absolutely world class. A Spanish company, Grupo Piñero, owns Gran Bahia Principe. It also owns Europe’s second biggest travel agency, Soltour, which sells and runs 2.5 million vacations every year.

Grupo Piñero’s hotels along this stretch of coast have been operating at 88% occupancy for the past 10 years, and the Gran Bahia Principe already has a total of 2,700 rooms.

Fortunately for us, 2,700 rooms aren’t enough. The resort needs 3,000 rooms…because that’s the current level of demand.

And that’s before you even figure in any impact from the new golf course or the new Tulum airport that will be built 15 minutes from here.

The Developer at Sian Ka’an

Serial developer and entrepreneur Benjamin Beja has sold and/or developed more than 1,000 homes (mostly targeted at the North American market) in Mexico City, Puerto Vallarta, Riviera Nayarit, and Riviera Maya, over the last 10 years.

Benjamin spotted the opportunity created by the room shortage at the Gran Bahia Principe. He is building 300 condos on the new Robert Trent Jones golf course, built to hotel specs. These condos will be located a block from the new 7,600-square-meter clubhouse.

Amenities here include commercial area, tennis courts, spa, and restaurants overlooking the natural cenote-dotted course. A shuttle bus takes you from here to the beach every 10 minutes. Residents and visitors have full use of all of the resort’s amenities.

And the Gran Bahia Principe hotel chain likes Benjamin’s work. It (through another Grupo Piñero company) has agreed to lease the 300 units Benjamin is building.

Owners of these units will be paid a guaranteed and fixed rent for the duration of the lease.

The Rental Yield

Here are the annual fixed rental yields:
• 56-square-meter unit: $9,000
• 90-square-meter unit: $13,500
• 130-square-meter unit: $13,500.

And some other important specifics:

• Rent is paid quarterly
• The rent you receive is fixed, irrespective of occupancy
• The operator will take care of all the expenses
• During the course of the lease, you will not pay maintenance fees, HOA fees, administration fees, or property tax
• The lease varies from 5-7 years depending on which phase your unit is in
• Each unit comes with approximately $18,000 worth of furniture and appliances.

The operator of these units knows the market here. They already have 2,700 rooms under management in this area.

Remember, the strength, stability, and track record of the operator is the key to a deal like this. A promise to pay a fixed rental income is only as good as the group making the promise.

This group is strong; however, I still encourage you to check it out on your own.

What I saw on my trip:
Here, you aren’t relying on a developer’s promise to build roads, put in infrastructure or build a golf course. Check out these videos:

The roads are in place. Infrastructure is first-rate. The Robert Trent Jones Golf course is world- class. http://sharing.theflip.com/session/841b40ea01614dfc99e8798ce133d497/video/12089294

The water you see dotted along the course are natural cenotes. Try this for a testing par 3:
http://sharing.theflip.com/session/57c9fc490d2b35a1612a3aaa5c2f8d3c/video/12088726
http://sharing.theflip.com/session/161cc191d6d4f1e7be6ca38f6d4fa4d7/video/12088948

The exterior of the clubhouse is complete. They are working on the interior fit-out. The clubhouse is expected to be open within the next 3 months. Phase 1 units are on track for delivery in June. The site was buzzing with activity when we were there.

This is a garden unit: http://sharing.theflip.com/session/919e320c32abb10ce25636a24856929e/video/12141974

This is a penthouse unit: http://sharing.theflip.com/session/e21fd38ac160f01e75897e62884a1f27/video/12141794

The finishes are absolutely top class. These units will form part of the resorts premium collection.

The CEO of the resort joined our group on Saturday morning. He’s the guy that signs your rental agreement. He is also a fellow owner at Sian Ka’an. He bought 4 units.

Your lease on phase 3 units expires in seven years. Members of our group were interested to hear what the resort’s intentions are at the end of this period, and what the medium-term projections are for new room supply in this area. Hear what Jose Maria (the CEO) had to say: http://sharing.theflip.com/session/58e08307e134851a6cbc3198d70427ae/video/12254707.

Sales volume has been accelerating. Phase 1 and 2 is pretty much sold out. As of yesterday, only a handful of units was still available. Around 50 units are still available in Phase 3. Inventory availability changes daily. With units starting at $164,000, I expect the remaining units will sell out fast. If you haven’t got in on this opportunity already, you still have time—but you’ll have to act quickly. Benjamin and his team host another big group of readers next month. Members of our little group who have visited have been really impressed with what they have seen. In fact, 87% who have visited the resort, have bought.

If you have been waiting and watching this deal from the sidelines you need to act now.

The Play
This deal offers a strong rental yield with the prospects for capital appreciation.

My recommendation is to buy one of these units and hold until the lease period expires.

At the end of the lease period, I expect cash-on-cash yields will rise substantially.

I also expect prices will be substantially higher.

And at the end of the lease period, I expect the new Tulum airport to be fully functioning. If you decide you want to exit, this would be a great time to do so.

Next Steps
Benjamin’s team is standing by to send you a full information pack (including floor plans and renderings) and answer any questions you may have. The team will be delighted to schedule a one-on-one conversation, to talk you through the opportunity. You should get in touch today if you’re interested. I don’t expect these units to last long.

I strongly urge you to visit and see this opportunity with your own eyes—and to meet the team behind the project. Benjamin believes in his project. He’s willing to put his money where his mouth is. He’s subsidizing the cost of a chill weekend at the project; a 3-day trip is only $150 per person.

Ronan McMahon

P.S. I like this offer because it comes from a solid developer, with guaranteed fixed income, and it’s backed by an experienced and successful resort operator. The market here is robust. And the terms are excellent, allowing you to leverage favorably.

Please contact Donna today. She’s the Scottish lady that features in some of my video.

Here’s Some Video I Took