Buying wholesale or otherwise getting into an opportunity early is one of the four ways I look to make money from global real estate. But buying wholesale isn’t as easy as it might seem. Research and timing are critical…and, in some cases, the real key is having the right contact. For example…
Friend and fellow developer Phil Hahn is launching a new “green” project in Belize. Phil has partnered with a local friend to develop a riverfront community based on the cornerstone ideas of sustainability and longevity. Phil’s concept goes beyond the typical “green” development concepts. Yes, the community will be powered by solar panels. It’ll boast the latest eco-friendly septic processing systems. And traffic within the community will be limited to human power (biking and walking) and golf carts.
However, Phil’s vision for Carmelita is grander. The community will include sites for traditional gardening and farming. These efforts will be naturally organic, not mass “organic” crops. The community design will encourage interaction among residents while respecting the habitat around the development site. I know Phil well, and this project is close to his heart. This is how Phil thinks about things personally.
With nearly 1 mile of riverfront and natural forests surrounding the property, this new project is the perfect setting for a “green” development of the kind Phil envisions. But, again, Phil is going for more. He also wants to encourage residents to follow the nine common practices of people who live in “blue” zones.
Blue zones are places around the globe boasting a high percentage of centenarians among the population. Living to be 100 years old is becoming more common, but certain locations are home to greater populations of long-lived people. A study done in 2005 identified nine common activities of people who call these spots home (one of which is to drink a glass of red wine every night, for example).
Phil’s new development undertaking is called Carmelita, and, if you’re in to all things “eco” and would like to have a house yourself in that type of community, Carmelita is definitely a place you should consider.
But how does Carmelita stack up as an investment?
Phil is in the planning stages for his new project, and, like any developer in his position, he’s looking for some early investors. Three, to be specific, and he’s found one of them already. Meaning Phil has two Founder’s Guild slots remaining available as of this writing.
The investment offer is straightforward. You invest US$60,000 today. By the end of 2012, you will have your US60,000 returned and receive, in addition, a riverfront lot with a projected retail value of US$65,000. During the entire time of the investment, your funds are collateralized by land.
On the face of it, considering this from the investor’s point of view, this opportunity fits my standard personal target. I want to double my money within three to five years for any investment I make. In this case, you more than double your cash investment in 35 months. And you have some potential for upside, as, typically, initial retail prices for development lots can increase quickly in the first year or two of the project’s marketing. Plus, Phil will cover your closing costs when it comes time to take possession of the lot. These will amount to about US$12,000 for a lot valued at US$65,000, so this is not an insignificant added value.
On the other hand, strictly speaking, you aren’t doubling your money. That is, you won’t be returned two times your initial capital. You’ll be returned your capital plus a lot worth nearly as much. You must then decide what to do with the lot, and, if you want or need the cash at this point, the burden would be on your to find a buyer for your asset (although Phil will help you resell your lot through his sales team). However, if you’re interested in becoming part of the Carmelita community, this amounts to a way to secure a lot on the property at no cost. In other words, this is a way to own here free.
This opportunity doesn’t suit everyone, but it’s a great opportunity to get in early. In fact, unless you were to become a developer yourself or took the risk of buying raw land to flip to a developer, it’d be hard to find a way to get in earlier. Further, given that your investment is collateralized and that the capital requirement is only US$60,000, the overall risk isn’t great.
Lief Simon www.liveandinvestoverseas.com
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