This entry is part 2 of 2 in the series Understanding Costa Rica Real Estate

Early arrivers to Costa Rica buying land.In Part 1 we considered the early foreign investors in real estate here in Costa Rica’s southern Pacific zone.  The idea being that in so doing, we’ll have have a better understanding of the real estate market here. We continue now with Bob (early visionary investor) as he proceeds to segregate and sell his large parcel (finca).

Bob’s vision for what is to come is so clear (to him) that he recognizes that he essentially stole the gorgeous ocean view property that he now possesses. The plan is to sub-divide the large property (finca) into smaller parcels and sell them at a considerable profit.

He takes his 60 hectare (150 acre) finca and segregates off 5 hectares and puts this on the market at $60,000, the price that he paid originally for the entire finca, leaving 55 hectares as a pure profit proposal.

Now granted, I’m fabricating the name and the transaction. But this I do as a composite of various such transactions that I was aware of at that time. What I experienced when I got into the real estate business here in 2004 were the ripple effects of not just one deal like Bob’s, but the after-effects of many such deals.

There is some historical precedent to the investor phenomenon that transpired at that time. Well known examples are: the dissension regarding Alexander Graham Bell being the actual originator of the telephone. Elisha Gray applied for the patent on similar voice technology, essentially on the same day as Bell. Alfred Wallace and Charles Darwin both – independent from each other – came up with the theory of evolution at the same time. It was essentially the luck of the draw that Darwin is credited as the author. And to look at the advent of American Contemporary art in the New York art scene with Jasper Johns, Andy Warhol, Rauschenberg, Roy Lichtenstein and on, is to see one of the strangest examples of unrelated, converging visionaries.

I wonder at this “phenomenon”. It is recurring in human history. Unrelated individuals and groups, all at roughly the same time, turn their attention to something. It’s almost like some cosmic force directing select ones to go and do a thing. Ok, not to belabor this point, but I find it fascinating. I mean, I could understand one guy. And then maybe that guy talks to someone else about what he’s doing and they think it sounds good and so they do it also. But unrelated, concurrent action??  Por favor! 

Well, barring an un-quantifiable cosmic event from our understanding, I can only suggest that this is simply the way of the world. “Progress” of civilizations. The time had come for this gorgeous country to be discovered and exploited for what it had to offer – its riches. And, as it turns out, there were plenty of buyers.

There were several Bob-like visionary investors who converged at roughly the same time in the early days of real estate here in Costa Rica’s southern Pacific zone. These all went on to see enormous returns (turning $1.00 USD into $120.00+-) on their relatively paltry investments. A couple of the best known Dominical-centric examples of these investments are the areas of Lagunas and Escaleras and to a lesser degree, Hatillo. 

We are now getting to the time when I began work in Costa Rica real estate. These were the conditions of the market at that time. The majority of real estate sales at that time were of raw land, and this was despite the majority of buyer’s initial request was for an existing home. There simply weren’t many to pick from. The inventory was primarily raw land. After looking at the available options for existing houses they would go to the default position of buying land and either building, or holding the land for a future purpose. 

The houses at that time were difficult to sell, despite the common preference of the buyers to purchase a house. Those early arrivers to the area were somewhat unique. I like to say that we were all a bit “out of round”. We had decided to move from our homeland to an area of the earth that was certainly not the most accommodating of environs. What houses there were, were frequently expressions of that individuality that brought them here in the first place. These were not homes for the general market. Some were lovely in their uniqueness while other were, quite frankly, atrocious. 

What I came to call the “Costa Rica Formula” for buying land had a couple of iterations. The visionaries were the big winners of the formula, but those that bought from them were also beneficiaries of having been early arrivers on the scene. The formula was to buy one of the available segregations from a Visionary. Despite having been segregated from the mother farm, these properties were generally still quite large by today’s standards, commonly consisting of multiple hectares (1 ha = 2.48 acres). To then cut off a marketable piece of that parcel and sell it, effectively reducing or eliminating the initial investment principle. Buyers at that time could almost all count on this being an option.

In 2004, some of the Visionary’s pieces  were available, as well as the lots being made available from those that they had sold to.  And there was quite a lot of work being done to bring more to market. These were the days prior to the big crash of 2007/8. The reason for the crash fed the formula, and the market spiked. We were in a boom.  The sub-prime market made for an unreal and absolutely illogical availability of money to homeowners in the U.S. This was the market I started working in at that time.

My thought is that the spike in demand, and the subsequent prices, is one of the many ripple effects from the sub-prime lending mortgages thing that resulted in the demise of the global economy in 2007.  Not to belabor the point, but I think that it’s important to understand this as, here we are some 10 years later, and the effects of the “spike / crash” on the market are still very present. I’ll get to this more in a following article on present day conditions.

 


The Wall 2011 2


Visiting Family:

It is one of the truly enjoyable aspects of living in a foreign land.  You have to leave the United States to be able to visit the United States.

There is an obvious pleasure quotient to visiting family. However, I suspect that my case is a bit unusual. Here is what I get to do at the advanced age of 52. I am able to visit my brother, sister and mother – all in the very same house that we all grew up in. The biggest change over the years is simply that our father is no longer with us… well that and the fact that we are all quite a bit older than we used to be.

A Wall of Magazines

Food For Thought?

But that’s about it. In fact, the green shag carpet that we had there in the 70’s is still there. I’m in favor of a law regulating the life of carpet. This green carpet really should be illegal, but there it lies.

Aside from the joys of family, I get a real kick out of visiting my former homeland. I am very much transplanted now.  I have lived in Costa Rica since 1999, and so in the normal course of my days, I don’t pay that much attention to the goings on of the States.  The exceptions to this are when I visit there, or when there is some noteworthy happening that finds its way through all of the insulation that I’ve put up in my life, motivated largely by a desire to reduce, if not eliminate, the effects of media on my mind and by extension, on my life.

So, when I fly back into the States, it is normally via Dallas or Houston. I make it a practice to bee-line it to one of the airport book stores. In these stores there is generally a wall of magazines. This wall of magazines is an intensive crash course in what the media is currently pumping.  The topics seen there will likely factor into my visit, and I expect to see these topics being worked and reworked in various configurations throughout my stay. This pumping is largely in response to what “we”, or the population at large, demand from the accommodating media.

My life in Costa Rica is immersed in a very different lifestyle than anything that I ever experienced when I lived in the States.  The contrast of my “normal”, with the “normal” of the States, causes a sort of sensitivity. The aspect of this sensitivity that I focus on at this point in my travels is primarily the media. But there is a problem. I suspect this problem is due to the fact that I am from the States, so in fact the prevailing conditions in the States are never all that far from what I grew up with. So the acuity of vision, or sensitivity, only lasts for a short time. I quickly slip back into my deeply ingrained gringo-ness and all of the bru ha ha starts to make sense and grow in importance.  All of the blaring news announcements, “BRAD APOLOGIZES TO JENNIFER” – from the tone one might think that World War 3 has begun, or that someone really has discovered perpetual motion. I just really get a kick out of these things when I first arrive in the good ole US of A.

Over the years, my visits to The Wall have provided me with an opportunity to re-evaluate my own life and my own move to Costa Rica so many years ago. I wonder at what it would take to get a presence on The Wall.  It must cost a bundle to publish a magazine and distribute it to all the Walls every month, or week, or 2 weeks, whatever. Vale la pena, as they say in Costa Rica: it’s worth the cost. They incur the expense because they know that we – us humans – want this stuff, and we will pay for it.

I am a sponge, standing there. I smile at my own species while I observe the media, in all its glory, accommodating the gigantic demand for this brain-rot drivel.

I can’t say that I’m interested, heavens no! Ok, maybe a little, but not a lot. Well, you gotta admit, the personal carryings on of Jen & Angie does have a certain appeal, a certain “I think I’ll just take a minute and find out what is going on here” appeal.

In my visit to The Wall as I enter into the States, I really find that I’m not interested in the least. However, over the course of my stay, my attitude goes through a shift. As I leave, I feel that perhaps this information really does need to be told.  And by golly, I really would like to know just exactly what Brad said to Jen when he apologized to her.

Topics

The Wall is diverse in its subject matter. I generally find that there is a hot technology topic of some kind, health, politics, and of course, celebrity.  The Apple Corporation seems to be enjoying its 15 minutes. Health has gained some points over the years that I have been visiting The Wall.

The political scene ebbs and flows on The Wall.  In past years George W. was a common feature on The Wall. I found it interesting how quiet The Wall was about Mr. Obama, but it was quite noisy about a few members of the large group that are vying for the GOP position in the upcoming presidential election.

So, as I fly out and away from this consumer haven, I do The Wall in reverse. I note how I feel about observations on life. And I like to watch how these feelings morph as I settle back into my “normal” in the coming weeks.

I have written in the past about my theory that I like to call “Original Thought”. Original Thought can be seen in visitors to Costa Rica on or shortly after about day 4 of their trip. Staying in a villa, nestled into the jungle, overlooking the Pacific ocean, there is a noticeable shift that occurs in people.  The theory posits that getting away from the media, frees up the mind to think about topics that are genuinely of interest and originate from the person. The theory states that we all have a little something as a gift, like maybe a leaning towards poetry, or music. Or maybe we have a propensity for thinking up sustainable systems, or a better way to raise broccoli or whatever.  The topics of The Wall are nowhere to be seen when Original Thought rears its head.  People find themselves conversing about all manner of topics, topics that bear no influence at all from external media but instead originate from the pure, unadulterated human intellect that we all carry around with us.

So in my re-entry to Costa Rica, I watch as the numerous images that were repeated with regularity during my visit to the States, recede. The Wall will have to get along without me – until my next trip.

 


About Tigre

My first visit to Costa Rica was in 2002. I immediately fell in love with the warmth of the climate and people. After spending two weeks in San Jose, Puerto Viejo on the Caribbean side, and Tamarindo in Guanacaste, I knew there was a good chance I would return sooner than later. Sooner came just 6 months later when my uncle mentioned he was flying down to Costa Rica to close on a piece of property in the Southern Pacific Zone. On that trip I found my own piece of paradise above the small town of San Buenaventura, home to the San Buenas Golf Resort. Two years and 8 trips later, I decided to move to Costa Rica full time. Every day I am thankful for that decision.


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