Wish You Were Here? | Pathfinder International

Monday, October 19, 2009

Dear Reader,

Nicaragua has drifted off the radar for most people. Not off mine, though. There are many reasons Nicaragua should be on your radar…the warm and friendly people…the charming colonial cities…the lakes and mountains…and the breath-taking Pacific coastline.

There’s one standout reason however: intrinsic value. You cannot ignore the intrinsic value of Nicaragua’s south Pacific coast. This place is special. Unique. Here, you’ll find rocky outcrops, world-class surf, and some of the most jaw-dropping views in the world. The coast is more awesome than northern Costa Rica only fifty miles to the south…or southern California, a four-hour flight to the north. Yet prices are a fraction of what they are in northern Costa Rica…let alone California.

Economic woes mean that sales volumes in markets that were dependent on US buyers have fallen. Nicaragua is one of those markets.

This has created a buying opportunity: there are deals to be done.

It has also created a risk. Projects can run into problems now that their sales pipeline has shrunk. Buying in Nicaragua today, you need to buy in a project that is financially secure and isn’t reliant on future sales to move forward. You want to buy in a project that is well funded…where the developer has deep pockets. Where the roads are complete and the clubhouse up and running. Where houses are built or under construction already.

Last month I told you my three golden rules for buying preconstruction. You need to look for:

-An appreciating market in the early to mid stages of growth
-A developer with a strong track record who is financially stable
-Supply constraints (a lack of developable land for instance)
-A market with an abundant supply of end users

The lack of liquidity in the market in Nicaragua means that I don’t recommend buying pre-construction here. In one particular case however, I used insider knowledge to bend my own golden rules.

Eight months ago I recommended a pre-construction opportunity on Nicaragua’s south Pacific coast to members of Real Estate Trend Alert. To some, this may have seemed like a brave move. I was sticking my neck out on a deal in Nicaragua. The world was gripped by recession. Surely real estate in Nicaragua was the last thing on anyone’s mind!

I had my reasons. One factor was that Nicaragua has drifted off the radar for most buyers. Mostly, though, I was attracted by incredible values in the #1 project on one of the world’s most beautiful coasts.

Following my own analysis of intrinsic value and a solidly-backed project, the recommendation became easier. Rancho Santana is a “stunning??? (to quote Forbes magazine) 2,700-acre Pacific seaside ranch: with five distinct beaches…amenities such as the clubhouse and pool already in place…security…even title insurance. It’s a ten-year-old project. Set in its ways. And financially solid. The investors themselves have built their own homes there. I know because I’ve stayed in them. Investors and homeowners here include International Living’s Founding Publisher Bill Bonner and most of Agora’s (International Living’s parent company) Executive Committee.

I had the inside track on their commitment to Rancho Santana and the construction of the condos. Irrespective of the market, the condos would be built. These guys would use their own funds, not borrowed money. Every detail and touch would be to the highest standard. No corners would be cut. They want to leave a permanent legacy. That legacy is Rancho Santana.

There is no project along this coast that can compare with Rancho Santana. It’s there, it’s real and it’s buzzing. When you drive around this property it’s hard to believe you can buy anything here for less than $1 million. The homes here are awesome. Yet you can buy one of the remaining condos for less than $300,000…or a half-acre ocean view lot for less than $50,000.

A mere eight months since I wrote to members of Real Estate Trend Alert about this opportunity, the folks at Rancho Santana are preparing for the grand opening of the first two condo buildings. This is the view owners will have:

Construction has been ahead of schedule. The first units will complete in November. Twelve of the twenty-four units were sold pre-completion. The remaining twelve will be sold as fully finished units. Construction quality is top class. See for yourself…

Only the mega-wealthy can afford a retirement or second home like this in northern Costa Rica or California. With half-acre ocean view lots for less than $50,000 and condos for less than $300,000, this luxury lifestyle is within your grasp.

Only this coast is nicer.

This is my favorite place in Central America to spend time, kicking back, and recharging my batteries. It’s special…

I wish I was writing to you from Rancho Santana. Please visit. I think you will be blown away. I am…every time I stay here.

The remaining twelve units will go on the market fully complete next month. Prices start at $274,000 for a 1,585 square foot unit. That’s only $173 per square foot.

Ronan McMahon

P.S. At International Living’s conference in Las Vegas earlier this month an exasperated attendee came up to me and said “$300,000 for a condo in Nicaragua?...I can buy a condo for that price in California???. Believe me, in California, you cannot buy a condo like this, in a location like this, unless you’re willing to pay well into seven figures. Santana isn’t an ordinary place. It’s special. See for yourself.

P.P.S Your property tax will be about $150 per annum. Try swinging that in California. Come and visit…