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for you real estate investors

if i would have bought a $700 mil apartment in Poblado last June, i would have paid $269,230 in greenbacks(avg. 2600 to 1). today that same apartment would cost me $318,181 (avg. 2200 to 1). that is a $48,951 spread in 9 months.

thoughts? opinions?

By tejasmarcos on Mar 26, 2007, 20:21 in Friendly Talkzone.

vicshere says on Mar 26, 2007, 20:23:

its nice to it nice to do the math after the fact.... i do it all the time and kick my ass

listo
"con mucho gusto"
Vic

listo

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mecca says on Mar 26, 2007, 20:26:

tejas It's amazing, I remember those few weeks of near 2600 exhanges. Man "those were the days".

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vicshere says on Mar 26, 2007, 20:28:

when i came to colombia 5 years ago the US bucks was at if i remember correctly 2950 or there abouts ....just think of the leg up...you could of paid gringo prices and still made a good profit

listo
"con mucho gusto"
Vic

listo

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aztec says on Mar 27, 2007, 04:42:

When I first.... ...visited it was about $750.

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robi666 (Trustee board) says on Mar 27, 2007, 06:30:

You're wrong Poblado prices went up at least 15% in 2006. Same apartment now cost 770 millions. So it is 350k. Plus, if you had rented that apartment thru an agency, you can make 7% NET income per year. That's roughly 37 millions for 9 months. So now you'd have 807 millions, that's 366.818, so almost 100k USD in 9 months. Take away 21 millions of 3% agency commission if you resell, and that's it.
Of couse, if you do it as investment, I wouldn't buy a new 700 millions apartment... more likely 5 smaller used apartments.
So, this is what happened this year... we can't be sure about next. Will Uribe fall for this para-political scandal and a new Chavez take away it all?

what we do in life... echoes in eternity.

"I am a citizen of the most beautiful nation on earth. A nation whose laws are harsh yet simple, a nation that never cheats, which is immense and without borders, where life is lived in the present."

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robi666 (Trustee board) says on Mar 27, 2007, 06:47:

Uhm... DG, I don't know how many not gringos understand you, and I surely don't know what you're talking about, but i am sure you have a clue! :-) Narvale que? BM que?

what we do in life... echoes in eternity.

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Gator says on Mar 27, 2007, 08:31:

Humm. I remember right around 100/1. My attitude, "If a frog had wings he would not bump his ass every time the hopped." If I had know about Home Deport in 1988 and bought 25.000 shares??? See above quote.

"Brevior Sltare Cum Deformibus Mulieribus Est Vita!" .

"Credidi pretio parvo emere et magno vendere tibi in animo fuisse!" .

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tomtom33 (☼Travelguide writer) says on Mar 27, 2007, 09:03:

Yeah boy. If only I had purchased 10 or 20 apartments on the beach in Cartagena in 2003 instead of just one.

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webmanco says on Mar 27, 2007, 09:09:

Talking about real estate and the magic numbers 777 Muy tarde para llorar por la leche derramada

Here is another proyect for "incautos" maybe not.

El Megaproyecto 777, es un proyecto inspirado por Dios, para llevar acabo en la tierra, inicialmente en la costa Atlántica, zona norte de Colombia (Sur – América), exclusivo para el pueblo de Dios.

Mega Proyecto 777

...A yo, déjenme queto y no me jodan má! ...

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podborski says on Mar 27, 2007, 09:26:

narwhal is a whale (ballena) I think the one with the single spike (tooth) coming out of it's head? Extinct or near extinct, protected i am sure.

So I suppose it's (was) easy to get that price on the Black Market

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podborski says on Mar 27, 2007, 09:29:

for me it was the apartment in old town prague in 1993 for $30,000...sigh...worth about a million today.

I really wanted to buy it, but my gf talked me out of it, she feared russky gangsters would somehow extort me or something.

Sound familiar?

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robi666 (Trustee board) says on Mar 27, 2007, 13:18:

777 is it a new beast number or what? or free access: rwx rwx rwx? Will it be possible to use condoms in that resort?
What a joke :-D

what we do in life... echoes in eternity.

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poco says on Mar 27, 2007, 13:43:

If only I'd (fill in the blank) Bought some BanColombia when Uribe was elected.

5 year chart

If only Donald Trump would expand from Ms. Universe into developments such as Dubai, Panama, etc. Then again there are those that believe starvation and poverty is better than their version of prosperity.

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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Greg444 says on Mar 27, 2007, 13:48:

Robi left out a bunch of crap:
First of all no Colombian would have paid the new high price, you would have to find a sucker gringo to unload at that high price.
What Colombia has no taxes on this profit?
Also fees or taxes to transfer the money back to US ?

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robi666 (Trustee board) says on Mar 27, 2007, 14:27:

Well, Greg, 7% is Net (after paying taxes). Yes, you would transfer back what you invested withouth being taxed, but you'd be taxed on the difference. But, just if you transfer back the money and if you declare full value when selling, which I don't think you would. What about transfering the original amount and then use a Credit Card for the rest? But there are other ways, too.
***
About gringos price... well, it's up to you if you want to pay more than what it is normal. I can assure you that prices and market are not made by Colombian selling to locos Gringos... I am not saying that it cannot happen, but the whole gringo thing is way overrated on this site. You buy an apartment thru a bank and they ask you more because you're gringo? No... You go thru an agency and they change the price they published on a newspaper because you're gringo? Never. Is new buildings in El Poblado (with those high prices) being sold exclusively to gringos? No...
You look at the newspaper and ask for a discount. Of course, before buying you have to look at the market, like you would do anywhere else.

what we do in life... echoes in eternity.

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tejasmarcos says on Mar 27, 2007, 14:36:

according to the 6-7 projects i spoke to, 95% of the units are being sold to Colombians. the average appreciation rate is 4% a year (poblado specific/new highrise only).

trying to walk a straight line on sour mash and cheap wine...

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robi666 (Trustee board) says on Mar 27, 2007, 15:48:

Tejas, where did you get the 4%? I don't know, it is probably true about new buildings (you have to consider that in one year they are used and not new, although i find it hard to believe that it is lower than inflation rate, which was around 4,5% in 2006 ). That's the problem of buying new.
Used ones got 13,5% in 2006 (estrato 6 national). Have a look at http://www.metrocuadrado.com/contenidom2/publesp_m2/habitar_esp/habitaragostode2006/ARTICULO-WEB-PL_DET_NOT_REDI_M2-3160754.html
Speaking to some friends, who are actually working for agencies that are specialized in El Poblado, they say that the appreciation rate is between 15% and 20%, and that their main problem is actually finding used apartments to sell.
More, if you'd live here and keep yourself informed, you'd see that 20% is not that far from being real. I know it seems crazy but just look at the newspapers.

what we do in life... echoes in eternity.

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tejasmarcos says on Mar 27, 2007, 16:25:

forgot to double that figure a two year appreciation rate of 16-17%. this is the info that we (a colombian friend & i) were given at new projects. this figure is pre-sales combined with sales up to completion date & not beyond. however, the sample size is small. i would need to collect much more data from a large percentage of the developments to get a better average or blend. *this is data for new projects only.

trying to walk a straight line on sour mash and cheap wine...

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tejasmarcos says on Mar 27, 2007, 16:26:

question for poco where did you find that chart? those figures are staggering.......

trying to walk a straight line on sour mash and cheap wine...

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robi666 (Trustee board) says on Mar 27, 2007, 16:45:

DG why you have to pay taxes on that in US?

what we do in life... echoes in eternity.

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tejasmarcos says on Mar 27, 2007, 17:01:

i wouldn't pay taxes private contract, paid in cash.........

trying to walk a straight line on sour mash and cheap wine...

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aztec says on Mar 27, 2007, 17:07:

Greg444, Yes to both questions! And also USA tax. What Colombia has no taxes on this profit?
Also fees or taxes to transfer the money back to US ?

There is a tax on profit in Colombia. If your original investment was made via transfered funds from out of the country (without form 4 and 11)there would be another 46% tax on remitted funds.

All that glitters is not gold. The foreign investor is not treated very friendly in Colombia. Just compare with Panama.

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poco says on Mar 27, 2007, 18:16:

Probably many places where did you find that chart? those figures are staggering

The chart is from a proprietary charting system that easily allows users to "cut and paste" into photo editing programs and prepare an optomized JPG photo.

There might be others but I like the Bloomberg 5 year or less charts. Many options available.

Bloomberg has user selectable comparison charting options. Colombian Index IGBC Find the "ADD SECURITY" box, type in CIB to see a movement comparison. Many different time spans are available.

The first thing I do in the morning is a quick search to see what color panties (if any) Britney Spears is wearing, then see if ebay has a good deal on "spinner wheels" and the financial markets to see if the world will end.

PS: Oil will be UP tomorrow.

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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poco says on Mar 27, 2007, 22:23:

Exactly where did you come up with this ? Whoever starts these rumors sure can make a lot of money spiking oil $5 a barrel. Damn!

This was after hours, small trades and oil went back to just above tuesdays closing. I'd say someone lost some money and made a trader a few bucks.

Ha. :)

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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podborski says on Mar 28, 2007, 06:24:

I'm too lazy to google it DG but I suspect narwhals are none too plentiful? I'm sure one Japanese whaler would take more than all the eskimos combined...

That musta hurt when you found out the value huh? But it might have been tricky to unload it, they take these things seriously these days.

Probably would have been better to carry it around with you to show chicks and tell them it was a real unicorn's horn. They fall for crap like that, jaja!

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podborski says on Mar 28, 2007, 06:32:

I'd be more comfortable with the tooth personally, but anything phallic has got to work magic.

Maybe I'll look on ebay for one of those, might be worth it jaja!

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Greg444 says on Mar 28, 2007, 06:47:

Lets not mix apples with oranges, Tejasmarcoa is implying he could have bought a apt for $269,230 USD nine months ago, now sell it for $318,181. Aztec says he will pay Colombian taxes on this profit, he mentions 46%. I suppose some gringo would go now today and buy an apt in Colombia for $318,181 USD , but I doubt it.

Can enough horny single middle aged gringos create a permanent real estate boom in Colombia ?, I doubt it. I do not see people moving from all over the world with their families and children to Colombia. Even Colombians in the US, who like Colombia, do not want to move their family back to Colombia.

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miamimike says on Mar 28, 2007, 08:08:

Create A permenent Real estate Boom? Maybe not permenent,, but those folks who created the Website, International Living, attempt to do it short term as evidenced by past forays into Panama, Ecuador,Honduras, Nicaragua. Some of those Americans who fell for their(IL) line in Nicaragua are questioning IL's wisdom since Daniel Ortega returned to Power LOL ,,,and Nicaragua was never considered as risky as Colombian Real estate so beware when they move into Colombia(I believe they already have btw)and start their sales pitch,,,Caveat Emptor,,,LOL

Avatar Legend: Bush "If any of you Reporters are wondering, it was a Size 10"

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aztec says on Mar 28, 2007, 08:12:

he mentions 46% By Greg444 Only If you fail to file proper documents with the Colombian government.

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robi666 (Trustee board) says on Mar 28, 2007, 08:34:

Wait DG, you misunderstood that about 7% and taxes. That 7% was for renting and not selling.
I don't know if US and Colombia have a tax agreement, like with most of the world. The tax agreement is for not paying the same tax in two countries (i.e. income tax), where you live and where you're from. Those treats tells that you pay taxes on real estate where the real estate actually is. So, if you rent an apartment in Colombia, you pay taxes on the rent in Colombia, not US. Now what I was saying is that you can rent here, pay your taxes in Colombia, agency, predial, maintenance and get 7% net income per year on the value of the apartment.
If you sell the apartment, you can get back the sum that you invested without paying taxes. The rest will be taxed in Colombia as capital gain (of course there are many ways to avoid this, but let's assume that you're mr. Clean and you do what none in Colombia do and, for example, declare the full amount of the sale in the notaria).
Now, I don't know what happen if you wire back the money (the rest and not the capital). I can tell you that I won't be taxed again in Italy if my residence is in Colombia. But I don't know about USA... and if you use a Colombian credit card?
I do not even mention the 46%, which is not a normal tax, but something that you pay if you fail to declare properly your investment. And it is not sure that you'll have to pay even in that case; if you filed form 5 and not 4, you can alway demonstrate that it was coming from your own money, on which you already paid taxes in your home country. I guess that you can reach an agreement with DIAN.

what we do in life... echoes in eternity.

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aztec says on Mar 28, 2007, 10:45:

robi666 "I don't know if US and Colombia have a tax agreement" No they don't.

"if you filed form 5 and not 4, you can alway demonstrate that it was coming from your own money" Just the opposite of what a foreign investor should do!

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tejasmarcos says on Mar 28, 2007, 10:52:

this is a good thread and i think it clearly demonstrates the wide varience in opinions as to what is and what is not. what is needed is a real estate advisor (not necessarily an attorney) that is a "local expert" in Colombian real estate regarding extraneros. thoughts?

trying to walk a straight line on sour mash and cheap wine...

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robi666 (Trustee board) says on Mar 28, 2007, 11:09:

Aztec About tax agreement: does it mean that if you live in Colombia and work here then you pay taxes here and in US? And, if you have an apartment rented here you pay taxes on profit here and in US? Wow, that sucks!
So what if you live in Colombia and you make a transfer for living expenses with form 5 from your account in US (where you already paid taxes on that money)? Will that be considered an income by DIAN and you have to pay taxes on it? Hard to believe.
And what if you are resident in Colombia and live on an american pension? You pay income taxes twice in US and Colombia?
Just asking... I am not an expert!
About form 4: Yes, Aztec, you're completely right. It's just that it happened to a friend and at last he did not have to pay 46%. Of course, always file form 4 and 11.
But, do you know that if you live in Colombia for more than 6 months, you are considered resident investor (even if you are not a resident for DAS) and you cannot file form 4 (even if I did and they did not reject it)? So what are you supposed to do? Banco de La Republica, expressely asked, could not explain this... just that rules are changing and changing.

what we do in life... echoes in eternity.

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aztec says on Mar 28, 2007, 12:53:

Suggest you search this site for viewpoints... ...comments concerning tax on foreigners who become residents. That is the reason he left Colombia for Panama. Of course he had/has enough investments in the country that he can't afford to become a full time resident.

Thanks to his advice we were able to acquire the services of one of the top law firms in the country. It was an expensive lesson but well worth it. My advice to you is that you not use any lawyer or agent who has not had experience working with foreign investors.

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Saltador says on Mar 28, 2007, 12:56:

Good points being made. Greg444 made a very astute statement regarding this boom in Colombian real estate prices. This is why I want to scream every time some guy tells me Cartagena is "The next Costa Rica." No, cartagena does not have near the attractions to entice families to buy that Costa Rica does, nor a long term history of stability, good publicity, and good relations with the US. Yes, it's paradise for single guys, but that is also waning now with some anti-gringo backlash.Prices for apartments are now triple in some cases where they were 2 years ago. For the people who believe in investing in the "greater fool" theory, just look to Miami to realize prices don't always keep going up. Also remember that anything can happen in Colombia politics, what if the next Chavez or Ortega pops up in Colombia in ten years? What will happen to gringo-owned property then? Could it be seized from you? It happened to people who invested in Nicaragua a while back when it was the "next big thing".
Which also means that a 7% return for a risky investment isn't all that great.

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aztec says on Mar 28, 2007, 13:08:

Banco de La Republica, expressely asked, could not explain this. That is the truth and would be funny if not so dangerous for the welfare of your investments.

You will discover that as a general rule no one on the front line in Colombia can explain the laws as they apply to the foreign investor. That applies to the bankers, real estate agents and lawyers. Without an experienced lawyer your investments are at risk.

If you are purchasing a retirement home for yourself or your wife and have no plans to ever repatriate the funds you shouldn't worry about the rules and regulations. The bank as a matter of course will file form 5 and you won't be required to provide additional information.

Furthermore, if your total assets plus income is low you probably won't be burdened with exorbitant Colombian taxes. Be advised however, that so long as you retain your U.S. citizenship you will be obligated to file with the IRS.

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poco says on Mar 28, 2007, 14:02:

Me either I do not see people moving from all over the world with their families and children to Colombia.

Moving with a family before retirement age won’t happen anytime soon.

Moving to Colombia and retiring with your Foreign WIFE would elicit feelings similar to having your fly open while giving a church sermon about perversion.

just that rules are changing and changing.

This is a major problem in Latin America. Information is POWER and having information is MONEY. When most people get information they HIDE IT ! Now you need to find THEM and ask for help.

Job security and income.

You should ALWAYS ask yourself why you are being helped. Why should a person give away for FREE what has required time and effort to acquire?

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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robi666 (Trustee board) says on Mar 28, 2007, 14:15:

Again Saltador you're probably right about Cartagena and I more or less think the same.
But 7% is merely the net profit of renting, not the total return of the investment. This year you would have had at least 10% more on the value and another 10% on the currency. That's something big... but who knows what's happening next year.
Ok, this is my thought: I invested big money at home and some here (roughly 85% - 15%). If it goes bad, not much of a change for me. It the cost of life goes to the stars here, then I should be guaranteed as well.
One important thing is to try to stay under the limit of paying taxes: it can be done. Taxes here are not that heavy (well, at least for an Italian).
Tejas: finding an expert is harder than you can imagine. Lawyers are a bunch of ladrones. The only way is to study everything deeply yourself (lot of time on DIAN and Banco de La Republica site, of course) and then interview tens of them. I am an expert now? Surely no, but I know more than 95% of the "so called experts" I met here. I can go through the entire process now... so, if you have precise questions I can try to answer here, and (aztec surely can, too) or know who to ask.
Anyway, Italy - Scotland 2-0 and life goes on...

what we do in life... echoes in eternity.

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tejasmarcos says on Mar 28, 2007, 15:33:

robi666 experience is definitely the key. i have yet to find all of the correct information for extraneros buying in Colombia in one place. i will hold my cards until the currency exchange begins to go the other way.

trying to walk a straight line on sour mash and cheap wine...

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Saltador says on Mar 29, 2007, 04:58:

Robi666 Duly noted, I did not account for the appreciation of the real estate in the total return. Real estate could continue to go up, I just don't think it's the risk free investment many are assuming it is.
It sounds like you've done your research, it's good to have an educated opinion you didn't form at the local watering hole.

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robi666 (Trustee board) says on Mar 29, 2007, 06:30:

Very true DG!
Life is good in Colombia, but only if you do not have to work. So, do your homework, INVEST AT HOME, secure your life and if you have something left, do it where you live, Panama, Costarica or wherever you plan to retire. Personally, I think real estate is far less risky here than IGBC, I don't need that money fast, so I put it in a long time investment. Plus, you get some fresh pesos in your bank account to pay your services on the Internet without having to cash the money with a foreign cc and make a queue at the supermarket or bank to pay. :-)
I got tired at looking at the charts everyday, I did it but those days are over for me, thank God. I don't want to guess what's happening tomorrow or the next month. Nowadays, I forgot what I studied and got a dumb country man. So, a brick is a brick, and a piece of paper is just a piece of paper. I see how's life here, people at work and bet that in 20 years it will be a different nation. Yes, with ups and downs. Getting old, so for me it is just large scale...

Instead, I'll spend the day riding, diving, surfing and looking for lobsters. DG, one day you have to leave "la nevera" and come over for dinner... asi te se quita la amargura :-) E ci beviamo anche una bottiglia di brunello di montalcino che arriva direttamente dalla Toscana... :-)

what we do in life... echoes in eternity.

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aztec says on Mar 29, 2007, 06:30:

I agree with DonGringo... ...Foreign investors,if they have not already purchased, have missed the market here in Colombia. The risk/reward is too high and Colombian future is too uncertain.

With the next election investors may become frightened. Another factor, whether you agree with them or not, the elected U.S. Democrats will change the terms of aid to Colombia. If they stay in control of congress the aid will probably get reduced. Thus, no more large flow of dollars into the country.

"First rule of capital: It goes where it is welcome, safe, and can grow."

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robi666 (Trustee board) says on Mar 29, 2007, 06:49:

Not now, still organizing things up there... soon!
what we do in life... echoes in eternity.

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poco says on Mar 29, 2007, 07:04:

Colombia had a solid 4 year opportunity Are we peaking out here?

My opinion is Yes. I do believe you're correct about moving back home. No opportunities but at least a roof over their head. My guess is none had purchased homes.

Maybe we're ready for the next leg up ? :)

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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robi666 (Trustee board) says on Mar 29, 2007, 07:29:

So true again! But it is more a latino thing than Colombian. Italy, Spain and France: the same kind of feeling about real estate. People don't move a lot!

what we do in life... echoes in eternity.

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Brians says on Mar 29, 2007, 07:53:

I like the stability of having a home. Glad I bought and will definately invest more when the opportunity presents itself. Longer term Colombia looks like it is postioned great. We can debate this all we want. Uribe shot and next Chavez comes in and changes Constitution to take my place. I would have put it in my wife's name a long time before. Anyway Robi knows his stuff and I think he knows more than most about the ins and outs of real estate down there. I completely agree with him that you are taking a bigger risk living in a country and not having any money invested there. Real Estate protects against inflation and I myself don't plan to flip. If you plan to live somewhere you should have some income source to cover at least the basic monthly costs. Then draw from your USA (Or in Robi's case Italian) assets as you need. You now have all your bases covered. Real Estate serves that purpose better than any asset class but it probably a little expensive to buy now unless you are there finding deals.

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Mr. Hollywood says on Mar 29, 2007, 08:06:

As a friend of mine once said Stocks are good, but have you ever tried living in a stock?

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miamimike says on Mar 29, 2007, 08:06:

Yet buying Oppurtunities still exist in the North of Bogota relative to a Phone Conversation my Ladyfriend(bogota native)had with the Developer who built her Brother's new house last year, She was informed of 3br/2ba condos(north of Bogota) offered at sobre-plano(preconstruction prices)prices of $28,000 USD. My Ladyfriend is considering buying at this price,,,so good deals still exist ,,,for some,,,How many are left at this price I don't know but if and after any still exist after my ladyfriend does the deal on hers, I will post the Builder and location at that time,,,

Avatar Legend: Bush "If any of you Reporters are wondering, it was a Size 10"

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miamimike says on Mar 29, 2007, 08:24:

After living through the Miami Boom of the last few years forgive me but I am skeptical LOL. Now all the hot Shot Investors and speculators are in a meltdown here. I am happy to see this-them getting burned and all. They drove the prices up out of reach for the working class people so its hard to feel sorry for these Vultures. No matter how far these Luxury Condos drop, a working class person with a salary less then say $70,000 yearly will never be able to buy one due to the taxes, Home Insurance rates, high monthly maintainence fees($500+)they are and will continue to be, out of sight for the working man/woman. Now if by chance you have a Home or Condo for sale for $150,000 or less, these still move fast as they are "Affordable" but not many to be had at these prices. Miami still retains(mostly) the title of "America's Poorest Big City" (I think they are number 3 this year)meaning the disparity between Housing prices and Wages(average)are amongst the largest in the US. Lenders will be extremely cautious in the future to lend money unless there is a 20% downpayment, verifiable Income tax records for the last 3 years and a clean credit history. Affordable working class homes still are and will continue to be in high demand here in Miami as daily you still have 100s of new residents coming in from Europe, south and central america and the Carribbean. Miami is unique in this respect, save LA and NYC and maybe a few others,,,

Avatar Legend: Bush "If any of you Reporters are wondering, it was a Size 10"

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Brians says on Mar 29, 2007, 08:24:

I have been offer a few good deals. When I say good they look good based on pre-construction but it is really almost like a land deal. Where I am an investor and there is no escrow account. I'll pass on that. DG it seems everyone has gotten into the construction game down there. I agree it smells fishy. If they start a project I will only pay as completed. The deals I see want money upfront. When they go under then where am I? I have a half completed project. I am sure I have some rights but I don't even want to try to research that part. The last deal offered to me the developer has a nice piece of land. Great location and designs. I pay him money for my apartment in 4 months it will be completed in 18 and then he gives me one for free when the entire project is complete. Way too many ifs in that scenario. However if he finishs it is a good deal. I think the best thing to do is let people know I am in the market for another place. Eventually someone gets in a bind and will look for a quick sale. Those are the deals I will wait for now. The trick is to have what I call eyes on the ground. I almost had a deal where a husband and wife were splitting and going to turn apartment back to bank as neither one would pay another penny for the apartment. They wanted to avoid bank issues but also didn't want to pay another monthly mortgage payment. I made a offer they were considering but then they decided to stay together and have since worked out their problems. Those are the deals I will wait for now. The problem is hearing about them but they will come up more frequently if people know you are in the market.

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miamimike says on Mar 29, 2007, 08:30:

Brian This is how my Ladyfriend's Brother bought his New Home in North Bogota not even a year ago. It was at pre-construction prices and he payed in the area of $32,000 USD. He had no problem and likes his place. I saw photos of the place, its a townhouse type of place 3 br, 2 ba and he really likes the place. My Ladyfriend(lifelong bogota native),contrary to what some here claim, says two pricing structures DO exist, one for Colombians and one for Foreigners,,,Caveat emptor

Avatar Legend: Bush "If any of you Reporters are wondering, it was a Size 10"

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Brians says on Mar 29, 2007, 08:43:

Miamimike I have been offer two such deals and like I said if they get completed they probably work out. I just lack knowledge of the builder and his funding capabilities. If his funding drys up then where am I. This happens all the time in the US. Builder sets up corporation can't get funding or can't sell at prices he wants and walks from the project. It is just a piece of risk I am not comfortable. The gringo pricing thing is overated. The prices being offered are generally the same.

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tejasmarcos says on Mar 29, 2007, 08:44:

Brians, you are referring to distress sales. i was in that market in the USA until 911 chasing these deals. after that, there were just too many newbies with contracts in one hand and the carlton sheets video in the other. it ended up increasing my competition by 5X and confusing the seller/owner.

* what is the best way to put "eyes on the ground" in Colombia? run ads? network with agents?

* i still think land deals are some of the least risky even at this stage in the cycle. however, it is hard not to get new buyers fever when you see some of the highrise units available these days. super nice stuff at $100 to 120 SF.

* i was talking with a friend the other day and i was asking him if any of the insurance companies offered coverage against earthquakes. it would be tough to lose a $100K + investment due to total or partial quake damage. i don't really see any other way a "concrete box" could be at risk. a highrise won't flood, unlikely to burn, etc.

trying to walk a straight line on sour mash and cheap wine...

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miamimike says on Mar 29, 2007, 08:56:

Brians I have been traveling off and on to Colombia since 1994 and I have seen this duel pricing in existence since I have been visiting the country. I guess we have come across different Taxi Drivers, Household help such as maids, carpenters, auto mechanics, Doctors/medical services, rents/landlords ect. I see the pricing equal only in places where a non arbitrary Printed Stamped pricing exists such as in Grocery stores, clothing stores ect. Even then my Ladyfriend claims even in this, duel pricing exists,,,

Avatar Legend: Bush "If any of you Reporters are wondering, it was a Size 10"

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aztec says on Mar 29, 2007, 09:08:

Absolutly not true... ....in many cases. "The gringo pricing thing is overated. The prices being offered are generally the same."

May not apply to pre-construction but you can bet the house on resales it does exist. We have had it happen to us several times. Enough that my wife only goes with the agent(without me) and even then she tells every body she is from somewhere else in Colombia. No way does she indicate she lives in the US with a gringo husband.

There is something in the water there that makes the prices go up when they hear a gringo is interested!

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poco says on Mar 29, 2007, 09:36:

Not all the time. This happens all the time in the US.

To the best of my knowledge this rarely happens with home loans. When and if a builder offers HIS financing this might happen but rarely, if ever are these loans 'market'.

He might jack-up the price, give you what looks like a low rate 10% down and when you sign he will sell the loan at a discount to a bank.

In other words he sold you a $100,000 dollar house for $130,000. You’ve got to know the prices wither in Colombia or the United States. It’s MUCH, MUCH harder to determine prices in Colombia.

Yes, without a doubt there is a Gringo Price and this price can also apply to clueless Colombians.

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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robi666 (Trustee board) says on Mar 29, 2007, 10:06:

Gringo price = clueless colombians price Ok, you want to buy an apartment. What would you do?
First of all you look at the newspaper. Then you begin calling and visit two or three big agencies.
You know the base price (the one printed on the newspaper or agency advertisement) and you know sq. meter (printed on the certificado de tradicion y libertad).
You see the apartment and you know if you have to put money on it for renewing. You know how old is the building. You know where it is located.
So, you put everything on Excel and you calculate cost per sq. meter, taxes, administration cost. Put how much you like on there. Put the age. Put where it is. Try to assign a quantitative value to everything.
After you see 20 or 30 you begin to decide and make an offer. Let's say 15% down. You surely will get some no! and surely some apartment will be sold to someone else.
So you look at 10 more and refine your knowledge. Now you know better. Next offer and maybe you'll buy it.
So, are you sure that it will be at gringo price?
I bet that you'll be offered apartments at a strange price not more than two times and almost sure not by big agency but by "friends" and "free lancers".
But you'll have your database and you simply cannot go that wrong.
And if you buy from a bank (you look for example at Tienda del Inmueble of Bancolombia) even better.
Poco is right: clueless gringos = clueless colombians. It is not different anywhere.

what we do in life... echoes in eternity.

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mecca says on Mar 29, 2007, 10:12:

robi you're definately right about that (gringo price). Though I don't know any gringo that would actually present themselves to buy a property. That's what atty's or front people are for.

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aztec says on Mar 29, 2007, 10:15:

We actually had ... ...a house off Cartagena doubled in price when the sellers discovered I was a gringo and lived in the US. They would not sell to us at the listed and advertized price. The document had photo's of the house and included information about the caretaker family.

They simply told us they had made a mistake and didn't want to sell at the posted price.

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mecca says on Mar 29, 2007, 10:22:

yep aztec, it's real went through this in cali, drove me and viewpoint crazy for a while. I know DG, it's painful is there any support in sight? How far could it go, ideas thoughts??

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Greg444 says on Mar 29, 2007, 10:42:

Take look at Tejamarcos apt , which he says, can sell for $313,000 USD.
The link to the fotos are in the PBH rent page.
I doubt anyone would pay $313,000 USD for it.

Sorry it looks like Tejamarcos yanked off the link showing all the photos to the apt. . The post was there last night , but now the post is gone.

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mecca says on Mar 29, 2007, 10:49:

Greg, I see an ad but no link for photos. Can you post the link for photos or direct me to the post? Thanks.

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Greg444 says on Mar 29, 2007, 10:54:

Sorry it looks like Tejamarcos yanked off the link showing all the photos to the apt. . The post was there last night , but now the post is gone. It had about 12 photos, on its own website.
He must have had moderater pull it.

It was thread, dated 3/28, with about 5-6 posts, and someone was just about to make an offer on it to Tejamarcos, for $600 a month including utilities. Tejasmarco said OK if you took it for at least 3 months.

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robi666 (Trustee board) says on Mar 29, 2007, 10:55:

Greg i can't see him selling an apartment there and I don't think that he was talking about that apartment. He wrote, if I would...
what we do in life... echoes in eternity.

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mecca says on Mar 29, 2007, 11:01:

Not necessarily there are several penthouses in Medellin for well over 1,000million cop. Though, I agree with you...they are spectacular and 600plus meters.

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Greg444 says on Mar 29, 2007, 11:06:

This one looked like 80-100k USD, from the photos posted.

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mecca says on Mar 29, 2007, 11:15:

Greg, no se didn't get to see them. In Med. right?

Ah, DG..sorry I thought we were talking about Med., I don't know anything about Bogota places, just cali and med. Kinda cold up there no? We agree on the gringo price that some let themselves get sucked into.

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Brians says on Mar 29, 2007, 11:15:

Gringo prices=Clueless pricing What Robi said was exactly correct. If you know the market and price per square meter than how can there be different prices. Simply put it is in the sellers best interest to get the highest price and your interest to get the lowest. Listen you see what they are asking, just like anywhere, and you see where the market is based on comps. then you know what to pay. The pre construction stuff is hard to negotiate. Resales are good and finding a place that needs a quick sale is the best. I stand by my word that Gringo Pricing is over-rated. Now Gringos paying more than what they could get it for because they don't know the market is different.

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mecca says on Mar 29, 2007, 11:23:

Brians, i think yes and no Your definately right about pre-construction and new stuff. Also, that you get your good rule of thumb for the location with comps. Usually, that will keep you from going too far off. I love gangas, i think everyone does, so for these you'll be buying below your comp values. Now this number can be well below depending on the urgency of the seller, of course. From what i've seen, the sellers in colombia can be far, far more urgent than in the US. This leading to purchases at 50% of comps. This is where the gringo will have trouble getting the super ganga, if they know you're a gringo.

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robi666 (Trustee board) says on Mar 29, 2007, 11:26:

Yes Brian Pre construction stuff is hard to negotiate, expecially if you buy from a well known constructor - agency. And I would add, for who's interested, that normal discount from Bancolombia is 7% on the list price.

what we do in life... echoes in eternity.

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Mr. Hollywood says on Mar 29, 2007, 11:30:

financing How are you guys financing your Colombian purchases?

Because if you're turning dollars into pesos and paying cash for these places it seems like a VERY risky investment for the return, just on the currency fluctuations, never mind the other risks.

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Brians says on Mar 29, 2007, 11:46:

I agree with that mecca I guess all I was trying to say is that there is no mysterious set of books for prices. I have heard so maybe stories and it really comes down to anything else. No matter where you go there will be people who try to get the most money out of you. If you get in a cab in the US and you don't know the fare then the cabbie probably tries to get more money from you. The idea that someone will only sell to Colombians at one price and Americans at another is a reach. The seller simply wants to sell and if he can get some more money out of you because you are not informed he will try to get it. Believe what you want but it is no different that the rest of the world.

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pedro (☼Travelguide writer) says on Mar 29, 2007, 11:47:

Different goals Obviously we all have different goals for investing.

- A quick gain and then sell?
- A family home, choose a barrio and a house to grow old in?
- A "buy to let" investment for steady income?
- An apartment valued in Colombian pesos as part of a balanced international portfolio of assets?

Personally I am all about asset allocation. If I'm going to stay in Colombia long term, it makes sense to have some (only some) of my assets here in Colombia and tied to the peso's fortune. There is a risk in doing that, but there's also a risk in not doing that.

The "5 minute chart" kind of guy, and the guy who wants a stable investment for a lifetime are not going to find much common ground about how to read this market.

que nota!

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Brians says on Mar 29, 2007, 11:57:

Mr Hollywood you have to pay cash. I couldn't get financing on a place in Colombia with no income in Colombia and what bank in the US would give mea loan collaterized by a property in Colombia. The point is that it is risky if you don't plan to live there and want to revert the money home. I am looking to protect myself and try to have some money invested where I will be living. I was able to convert a lot of dollars at 2,500 last year but now I am looking at 2161 (UGHHH). Will it go back to 2500 maybe (hopefully) but if it goes to 1500 at least I averaged some money in and at worst I have fixed my costs somewhat. I personally think there will be a good opportunity in the next year or two. All that would need to happen is to see Uribe shot like DG said and the peso would be at 2700 in a day. I don't however see the country reverting back to the Escobar days and really believe in it long term.

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mecca says on Mar 29, 2007, 11:58:

Hollywood and Pedro I also like having something in Colombia. I'm not renting or selling. So, my intention is on living there in the future, all or part-time. I'm establishing a base there and future family.

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robi666 (Trustee board) says on Mar 29, 2007, 12:06:

If it reverts back to Escobar days, then it will be the moment to sell our apartament in Medellin, at DOUBLE price, and get our payment in dollars or euros directly at home, probably with a much better exchange rate! And Ciao Colombia :-)
That's what the wealthy colombians were doing in those days, using the narcos money and staying with their noses up and hands clean!
Mr Hollywood: cash, cash and only cash!

what we do in life... echoes in eternity.

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Mr. Hollywood says on Mar 29, 2007, 13:01:

Cash is king That's what I thought, that everyone is paying cash.

I completely understand that for a person looking to own and live long-term in Colombia and I'm happy for a guy like Brians who seems to have made the big transfer when it was adventageous.

But I cringe when I see foreigners talking about speculating in Colombian real estate because it's "cheap" or there's "momentum" or any of that.

Once you remove the leverage of being able to use cheap money to buy a generally appreciating asset (as is the long-term case with most US real-estate investments), paying cash up front in a possibly unstable market for a 7% annual ROI as a rental seems like a lot of risk for little reward. Hell, little old ladies back in the US are getting 4+ percent on an insured US savings account with NO risk.

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mecca says on Mar 29, 2007, 13:03:

Man DG, you're getting me physically sick here. Just the thought of 15..... i can't even type it. ugggggggggggggg

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Brians says on Mar 29, 2007, 13:19:

1550 on the Peso and then my lifestyle is definately taking a hit. Reason why you need to diversify. I have a 2-4 years to let this paly out a bit. In the meantime I still can hope for at least an controversy to drive things down. DG I can't see the Peso making a move like that without a major event to spark it. Currency is thin and will move a lot. I still think 50% 50% on a recession in US although good GDP and Initial Unemployment this morning. Recession is US slows the world (not as much as the past but still a drag). Colombia willfeel a slowdown worst than most.

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mecca says on Mar 29, 2007, 15:09:

It's definately blind luck at times. Colombia is filled with property holders that live or have business in the US. So, i'd suggest looking at homes/apto's/whatever and asking if you can buy and pay in the US. I know there are entire threads dedicated to taking money back out, so my comment is more to you DG, in that I think you are looking to live in Colombia. ie. not looking to sell in 5-10 years and take your money back to the states. Just a thought, as you can appeal to the owner in dollars at a deep discount. Also, DG search for the really, really motivated seller. They are there and they deal.

Beware of remates and really know what you're doing, it's not like the states.

I'd just like to add that, some colombians owning property have taken it over from their parents or just don't go back to colombia (i know of at least 3 cases like this). Their homes are in "break down" condition, but they will deal like crazy. The one i almost bought was in a strato 6, in cali , 750 meters, for a song. It needed full remodel for sure. The owner in miami hadn't been there or put a peso into it for 15 years.

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utopiacowboy says on Mar 29, 2007, 21:27:

Some Indian chicks are extremely attractive but the culture is not conducive to the kind of behavior Colombianas are famous for. They tend to be rather insular as well, prefering to stay within their own ethnic group for relationships. I have several Indian friends and I'd like to visit India but if you're like me and have chucha on the brain, stick to Colombia.

Disclaimer: any comment I make is inane and is not to be taken seriously, and is so patently ridiculous that no one should take it seriously, even as an insult.

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mecca says on Mar 29, 2007, 22:10:

DG, no offence taken. You're right you live there full time and I don't. I'm familiar with what is going on down there, and definately realize it can be rather unplesant. Thanks for the heads up, 'cause the danger is real. I, like you i'm sure, love that country. So, what can I do??

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Buongone says on Mar 30, 2007, 00:02:

Peso vs Dollar I've just read alot of threads about the money and real estate investments in Colombia. Why not, if in doubt, maybe rent something, somewhere and just play the market. Dollar vs the Peso. Seems to me to be a lot easier doing it that way. At least until something changes. And then if it do's turn around, play it moving the other way. That way you would not be stuck holding some real estate that you may or may not want. You would not have to deal with all the hassle of Taxes, and everything involved with the real estate deal. I know for me, I have learned a lesson or two in real estate deals. I'm going to be damn sure that's what I want to do, before I do it. Money is harded earned, and we don't really have too many chances left in life, as we get older. So IMO just sit tight and see what happens. Hopefully make some change watching the market.

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poco says on Mar 30, 2007, 03:42:

A new record (for me) SIX consecutive and informative posts in a row that expresss a basis for the opinion.

What to do?

Purchase something to live in with the thought that IT ALL COULD DISAPPEAR and be worth absolutly NOTHING. No matter what happens you will be happy.

Nothing worse than being attached to a THING and STUCK with it for an indeterminate length of time.

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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Brians says on Mar 30, 2007, 04:34:

DG I agree with you on the kidnapping Something I think about all the time. My wife's cousins and uncles worry about it themselves as they have a few companies. However they tell me like anywhere you take the good with the bad and try to take as many precautions as possible. Can't eliminate the risk but can reduce. Keep to myself and try to fly below the radar. I don't talk to people I don't know about anything personal. I know I am a gringo and draw attention and try to be aware and precautious without parinoid. I worry about my safety in the US a lot sometimes as well but agree with you the kidnapping risk is real there. It is like my friend, who lives in Peru, and I were saying yesterday. The difference between the US and South America is not statistics. Heck you can make Philadelphia look more dangerous than anywhere in Colombia. The difference is you can feel completely safe and suddenly out of nowhere be in a tremedously dangerous situation that will probably end badly. In the US the samething can happen but the chances of getting out of the situation is a lot better. Things on a day to day basis may even be safer in Colombia if you live and stay in decent areas. However if things go bad for a gringo they usually are really bad and really scarey.

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Brians says on Mar 30, 2007, 07:48:

DG Bloomberg's take on the Peso although we are seeing a little dollar buying today for the first time in weeks:

Colombia's Peso Rises to Six-Year High on Dollar Inflow Outlook

By Andrea Jaramillo

March 29 (Bloomberg) -- Colombia's peso rose to a six-year high on expectations the country's economic expansion will lure capital.

Finance Minister Oscar Ivan Zuluaga said today the government will cut borrowing from multilateral banks this year to $2 billion from the $3 billion initially planned in a bid to stem currency gains. Zuluaga also said the government is adopting measures allowing investors to obtain loans from local banks to buy companies with pesos instead of forcing them to seek loans overseas.

``The peso continues to strengthen on expectations investment from abroad will continue to pour in as strong economic growth makes companies more attractive,'' said Alvaro Camaro, head analyst at Stanford Financial Group's unit in Bogota.

Colombia's peso advanced 0.8 percent to 2,150.35 pesos per dollar. The peso strengthened 11.6 percent against the dollar in the last six months, making it the fourth-best performer among 70 currencies tracked by Bloomberg. The Slovakia koruna, Thai Baht and Hungarian forint have outperformed it.

Dollars from the sale of state assets have boosted the peso this year. On March 21, shareholders of Acerias Paz del Rio SA, including company workers and the government, sold the nation's largest steelmaker for 1.08 trillion pesos ($502 million).

The government agreed in October to sell state-owned bank Granbanco-Bancafe for 2.21 trillion pesos and in December announced it would sell of natural gas pipeline company Empresa Colombiana de Gas for 3.25 trillion pesos.

Economic Expansion

Colombia's economy expanded 6.8 percent last year, the fastest growth since 1978.

The central bank said it sold $2 billion of pesos in the foreign exchange market during the first two months of the year in a bid to weaken the currency. The peso appreciated 15 percent in the second half of 2006, threatening to curb export sales.

``Measures to reduce dollar inflows are also positive as this relieves some pressure from the central bank to intervene in the market,'' said Carolina Tovar, an economist at Bogota- based Corporacion Financiera Colombiana SA. ``The bank's dollar purchases are adding to inflation pressures.''

Annual inflation may have quickened to 5.33 percent in March, according to the median forecast of 11 economists surveyed by Bloomberg. That's up from a 16-month high of 5.25 percent in February, and above the central bank's 3.5 percent to 4.5 percent target. The government is slated to release the data on April 1.

Bond Yield

The yield on Colombia's 11 percent peso benchmark bond due July 2020 was little changed at 9.76 percent, according to the central bank. The bond's price, which moves inversely to its yield, rose 0.069 centavo to 108.902 centavos per peso.

Zuluaga also said today multilateral lenders will sell $400 million of peso-denominated bonds in Colombia and give that credit to the government in a bid to reduce dollar debt.

The central bank only comments once a month on its sale or purchase of dollars in the foreign-exchange market. It is scheduled to release its March report on April 9.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1 at bloomberg.net

Last Updated: March 29, 2007 17:28 EDT

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Brians says on Mar 30, 2007, 09:20:

I get 15 minute delay on my currency quotes. I still only see 2186. A little momentum and could see a move to 2300.

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poco says on Mar 30, 2007, 10:39:

Talking about support levels I think the 2300 area is a critical support area. If it goes past that to say,,, 2550 then you can rest assured it would be up 365 pesos from todays quote.

How can a firm support level be determined ? When it starts to move past your predetermined support level look to see if it is firm. Holding a firm support level should give an indication it is going even higher.

Next I will discuss spreads.

"When you men get home and face an anti-war protester, look him in the eyes and shake his hand. Then, wink at his girlfriend, because she knows she's dating a pussy." Quote - General Tommy Franks

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mecca says on Mar 30, 2007, 14:14:

Oh yeah, Poco and DG Poco, please do get into the "spreads" as you say. PBH gets more interesting by the day.

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