Guys In The Zone: Costa Rica Real Estate

Disclaimer:
This article will serve as an update to what is happening in the golf project here in The Zone. The name has been changed to protect the innocent. Guys In The Zone is a real estate agency. We make our money on commissions paid by sellers for sales that we broker. Buyers of land sometimes operate on the mistaken notion that if they go directly to the seller, they will get a lower price because of there not being a commission involved. Even though the price paid is the same either way, we still have to deal with this thought process. So I have changed the name of the golf resort to Guys In The Zone Links or GITZL, which has a nice ring to it anyway. This way, if buyers are intrigued by what they read here, and they do a Google search for the golf course, they’ll just come full circle back to us, and we can then broker the deal.  We make money, and they get our representation in their purchase of a  golf course property in Costa Rica’s southern zone. Everybody wins.

Yes, there is golf in Costa Rica's southern zone.

It could be that the Guys In The Zone Links (GITZL) is heading for one of those “critical mass” experiences. The resort has been there, going through the Costa Rica labyrinth of disorganized bureaucracy for the past three and a half years.  As GITZL emerges, we see other such projects in Costa Rica languishing in the throes of various obstacles:

• a global economic crisis
• conflicting philosophies among founders
• lack of funding
• a nearly impossible Latin American permitting process
• etc…

For the thirty-some land owners in GITZL, who bought untitled land years ago, the titles are almost in. I know what you’re thinking: “Haven’t I heard this before?” Hmmmm, yes, I believe you have heard this before. So, we’ll see. However, at this point, and this time around, all permissions, permits, signatures, departments, laundry lists and handshakes have been made, acquired, stamped and clamped. There is no logistical obstacle and they are now just simply waiting for the documents to be delivered.

GITZL has not paid one colon/cent under the table to achieve its current fully permitted status.

I used to be a shareholder in GITZL and I used to sit on the board of directors there. All of that changed when the GITZL Corporation was unable to make its mortgage payments. Instead of folding and hurting all those who put their belief in the words of dealers (such as yours truly), and bought untitled land there, the shareholders got together and prioritized… -(now prepare yourself. We are talking here about behind the scenes corporate maneuverings, in an effort to make vast sums of money) – the wellbeing of those who had bought land in the project. The shareholders, at personal expense, allowed the project to go to the primary shareholder without a struggle. This primary shareholder, of his own volition, felt that it was important to protect the land owners there, that their ownership would be recognized and guaranteed.

I know, you’re thinking that you have stumbled upon a science fiction account of life on another planet. But you haven’t, and this is not. What you are reading is a firsthand account of my observations over the past 4 or so years. I am also one of those shareholders who lost in excess of $100k in the process (but who knows? The fat lady has not yet sung.)

My recent re-involvement in the project was inspired by one of our unexpected leads that came to us looking for a hotel plot. These prospective buyers really want to be able to offer golf to their guests as well. Their idea was to purchase a piece of land that would accommodate not only the horizontal hotel layout, but also nine holes of golf. There really is no such property left here in Costa Rica’s southern pacific zone. Enter GITZL.

There is a piece of land in GITZL that is slated for a hotel. It has been thought that one of the big franchise hotel names might approach GITZL and ask if they can put one of their monolithic hotels on it. (This Costa Rica real estate blogger is hoping not, but that’s just me putting in my unsolicited, tree hugging two cents.) Lord knows it would be a financial coup for GITZL. But in keeping with its surroundings, and even the design of the project, a more intimate layout of free standing bungalow villas sprinkled around a central restaurant / lobby would be more appropriate.

Locations of hotel plot and finished model condominium - Click to enlarge

This all coincides nicely with what our European investor was/is looking for. His budget easily buys the land allotted for the hotel, valued at two million USD.

So, we’ll see what happens with that deal. Presentations are being made in various offices in London and Malaga, and so we wait. The point, however, isn’t to crow about The Guys good fortune to have such a prospect, (although we are certainly to be able to crow about such things.) But all of this is about re-connecting with this odd little golf project here in the nether reaches of Costa Rica’s southern pacific zone.

Paspalum is a fancy name for grass

The place is beautiful. The existing nine holes roll around gorgeous Costa Rican trees and fauna, and are vibrant with an amazing array of birds and, well, life. Look anywhere on the course and you feel like you are observing a contrived setting, staged for some international golf magazine, complete with white sand bunkers.

The paspalum grass is a marvel. I witnessed a small tractor pulling a liquid tank that was spraying a fairway. Expecting to be told that this was an herbicide, or some such chemical, I was told that it was salt water. Weeds die in a saline environment, Paspalum thrives. Hmmm, can we use the overused “green” handle here? If so, I imagine myself making a presentation there, standing alongside one of the holes, able to say “and this is a truly green green” – get it? Ok, I know. I should apologize – but really, what is the point of being alive if we aren’t going to live, verdad?

So the weeds are handled without chemicals, what about fertilizing and bugs? Enter the ultra-acid soil of Costa Rica. The antidote is lime, or calcium. Mix this into the soil and you manage your PH, while driving off any pests. The little blighters thrive in acid but not in a balanced PH environment. So yes, I believe we can call this project green.

As for the Critical Mass mentioned at the outset, I just wonder if, as the GITZL folks quietly go about their business out there, if one day the world doesn’t wake up and there is a mad dash to be part of this amazing project. They’ve got a show condo – 2 bedrooms, granite counter tops, all teak wood ceilings, cabinets and furniture for $219,000 – a price that would have been impossible to believe prior to the economic tumble.

I suppose this could come to be viewed as the upside of the downtime – (OK – sorry about that one.

Facebook: www.facebook.com/guysinthezone

Regional to International, the Osa Airport Dilemma

A week ago, I was reading the Tico Times and the headline “Liberia Airport Renovation Nearly Finished” jumped out at me. It’s only been nine years since that airport opened, and now it’s getting $41 million dollars worth of renovations?? I had to figure out why, if only because it might offer a flash forward to what we can expect when (emphasis on “when”) the International Airport opens up in the The Zone, also known as, the southern Pacific zone of Costa Rica.

Long Lines

Whether it’s checking into a restaurant, hotel, or airport… people do not like to wait, especially when the line stretches out the door. Long lines and airports are synonymous, but the leaders at Liberia International (and the Guanacaste business owners) have figured out that a bad traveling experience doesn’t inspire repeat customers. The Liberia airport is scheduled to re-open any day now, and just in time for the tourist season.

The Profitable Impact

Did you know that 225,224 passengers arrived at Liberia’s airport last year*? That’s an average of 18,768 people per month and just over 625 per day. In January, foreign visitors in Guanacaste, increased by more than 28% over January of 2010. With the upgraded facilities (think mini-Juan Santamaria), services, and new carriers (JetBlue, Air Berlin), they are clearly anticipating an increase in arrivals in the near future.

The Liberia airport has done wonders for the development (read- boom) of Guanacaste. Not only does the airport employ hundreds of people from the community, it also stimulated new business opportunities in the immediate area, including— hotels, car rental companies, and commercial centers.

Conversely, there can be, and usually is, a relative downside to rapid development. Have you been to Tamarindo lately? I went two years ago, and the sleepy beach town I visited in 2002 was almost unrecognizable. The main strip looked like it had a SoCal facelift, the renown beach break was packed with surfers, and I found myself longing to be back in quiet and verdant Zone.

How It Relates To The Zone

The second most popular question we get is “When is the International Airport in Palmar going to open?” My answer: “I have no idea.” It’s not that I don’t read up on the subject, it’s just difficult to believe the words of Alberto Cole or the Minister of Tourism.

As I mentioned in an article a year ago, the construction of this airport goes hand in hand with the construction of new hotels. (At this point the area doesn’t have enough beds to accommodate an extra 400+ people/day in The Zone… especially in the high season.) Adding small to mid-sized boutique hotels isn’t an effective and complimentary plan. For the airport to be viable, large 100+ room resorts will need to be built and one need look no further than Guanacaste and its growing pains to be concerned.

To date, Ben and I have not heard anything concrete regarding new resorts in the area. Taking that one step further, there are only a handful of residents who want this airport to be built. Simply put, the majority of people who most desire this new International Airport… are people who don’t live here.

Tiger Heron in the Osa Peninsula

The Ecological Impact

Some of our reader saw the recent article in the Environment section of the The New York Times. The article outlines the potential ecological impact on the Osa Peninsula, an area that boasts 3% of the World’s known biodiversity. The author writes, “Construction is planned in two phases from 2012 to 2016… (initially) designed for 50 passenger planes.” IF (notice the big IF) that timeline is accurate, there will be a global blast of articles and special features, then… an influx of investors. Real estate and development markets will surely be stimulated, and these investors and relocators will have a large raw land inventory to choose from when they do arrive.

As real estate experts, Ben and I are standing in the path of progress and we are experienced “tour guides” in Costa Rica real estate. However, like the majority of people who move to The Zone, we also love our small town community and the postcard paradise that surrounds us.

* Costa Rican Tourism Institute

Episode 12 features a candid look at community in the Southern Pacific Zone of Costa Rica. If you’re considering relocating, buying a house, raw land, or a commercial business in the greater Dominical or Uvita areas, we encourage you to watch. And, please feel free to share your comments or questions. Gracias.

Talk Show – Episode12 by GuysInTheZone

Imagine this: you are interested in buying a piece of property in Costa Rica’s southern zone, so you walk in to one of the real estate offices in say – Uvita. You consult for awhile with an agent there. (For the sake of this article, lets call him “Ben” ) and off you go looking at properties that fit your interest.  After looking at all that Ben has to show you, nothing strikes you as the right piece (hard to imagine, but it has happened a time or two).

So far not a lot of imagination has been required.  Here’s where it gets a little more difficult.

Ben says: “how ‘bout we pop on down to this other agency, some competitors of mine down by Ojochal, and see what they’ve got” or “Let’s go on up to an office of my peers in Dominical that’s been around for years. They’ve probably got a few listings that I don’t that may be a perfect fit”.

I know – hard to imagine, but stay with me here.

Last Saturday marked the 2nd meeting of… well frankly I’m not sure what.  I’m not being evasive – we actually don’t know what to call it: Costa Ballena Realty Board? Association of Real Estate Professionals?  There were a few other names tossed about: Think Tank, Master Mind Group, Coffee Talk… whatever it ends up being, it holds the key to making the real estate buying and selling experience in our zone 10 times better than what it currently is.  (I like “Unified Realty Professionals”.  This could have the distinguished acronym URP which would be said something like – well, like ‘urp’ which would bring to mind the satisfied feeling one has having just enjoyed a good meal.)

Ojochal, Uvita, Dominical, Hatillo Platanillo and San Isidro are the towns that make up “The Zone”.  There are numerous real estate agencies in these towns. Some with recognizable names from other parts of the globe such as Coldwell Banker, Century 21 etc…  Then there are the “no namers” such as yours truly with Dominical Dot Biz Select Properties, and there are many such private label real estate companies.

The objective of the meeting was to improve our ability, as a unified and cooperative group, to serve people who want to either buy, or to sell property in our zone.  This is a beautiful, and much needed thing.

The meeting was attended by the owners of Osa Tropical Estates (Ojochal), two of the Coldwell Banker partners in the Dominical office, The Land Company (Dominical) principal and myself (Uvita).  We all have knowledge of all areas of The Zone, but have greater expertise in some areas over others.

Problems Identified:
It was agreed that the non-MLS (Multiple Listing Service) business model in Costa Rica makes it difficult for sellers and buyers.  The core problem is the lack of REPRESENTATION available to our buyers and sellers.

Buyer’s Problems:
When a buyer spends a day or two with a single realtor looking at property, they are only seeing what that particular real estate agency has for listings.  To really know that they have seen everything, a buyer would have to Continue Reading

This is part 2 of the Struggles of Conscience series. If you missed part 1, please click here

If you are a reader of this blog, you know about my 70+ client Ruthie. Well, I am a little behind in cataloging her journey of selling out of her Florida home and relocating to Costa Rica. But she is here now, totally re-located. We are in the process of looking for a car for her.

We were at a hardware store the other day and saw a car outside the place that I thought might be appropriate for her. We stopped to talk with the owner of the car and he proceeded to tell us how he wanted to sell his car, and in fact, he also had a house to sell, surprise, surprise. In this discussion he let slip that he would be looking for no less than $500,000 for the house. I felt that he was preparing me for the high number he wanted for his property, but it didn’t seem out of reason, based on the description that he had given me of the property. So we exchanged numbers and set up for me to view the property a couple days later.

The house sits on a promontory that has another land owner’s promontory in between it and the ocean view. So the view of this property is mitigated by the other guy’s trees. There are parts of the view though that are quite nice. If you walk out to the edge of the main house’s site, right next to the small pool, you can see all the way up to Quepos. Relative to the other houses in the area it is a “fair” view. The land there is sufficient legally for 3 or 4 other lots.. Of course, in this part of Costa Rica you never want to assume that since you have sufficient acreage that you will be able to actually use those acres topographically and forestally (that word, although not found in dictionaries, means “trees that can’t be cut”). I have seen 10 acre parcels that have 1/4 acre of usable land and that’s it. This land seemed to actually be usable though. It was entirely conceivable that the land could be subdivided into the 3 lots that he showed me on our walkabout.

So, after our tour, we sit with a glass of lemon water and wipe our brows to discuss the business side of things. He asks the dread question: “how much do you think my property is worth?” Now, mind you, he had leaked to me that little point outside the hardware store of wanting no less than $500,000. Also, during our walkabout he made it pretty clear that he was a savvy international real estate investor with a degree in economics. He has bought and sold more real estate than I likely will ever handle in my career. So, I’m just a little bit intimidated. I forge ahead, nonetheless. I am, after all, a bit of an authority on the values of things in my little neck of the global real estate market. So, I proceeded to recite the values of a number of houses that were on the market and that had sold in the vicinity with their asking prices and selling prices as comparables, and concluded by saying, “so I would say the value of your property is somewhere between $500,000 and $550,000″.

Turns out that one of my fellow realtors had beat me to the punch with this particular seller and had given him a price in excess of $700,000, which of course, the seller was delighted to hear. The reasoning goes that, if someone could buy this property and subdivide it and then turn around and sell those lots and make “X”, why shouldn’t he, the original seller of the property, be a beneficiary of that fact? Sound reasoning right? Yeah, I suppose, what with the bottom line and all. The property was a nice large estate piece that, in my opinion, should stay that way, and that I would have marketed that way. As such, it had a value of what I mentioned. I explained my conservationist concerns to the seller. Costa Rica is in danger of being cut up into the smallest possible chunks except when someone decides to not, which does happen, but I fear not nearly enough. As this particular seller said to me, “I love nature as much as the next guy and want to protect it. But business is business.”

It isn’t hard to see his reasoning on the matter. And perhaps mine seems a bit idealistic. But if he were willing to take a bit of a hit on the price, although by his own admission, he was making a killing on how much the property had appreciated since he bought it, and if we were to market it as a single, estate piece… granted, the next guy could buy it and cut it up since there is no law against it on this particular piece. But, what if, (there is that Universal qualifier “what if”), “what if” us Realtors consistently promoted the point of view that “X” acres is small enough? Wouldn’t that effect some sort of influence for the conservation of what makes Costa Rica so darned appealing? Maybe of three such land sales, one would turn out different as a result of such a presentation, but isn’t that far better than pure ‘bottom line’” thinking?

The reasons that we North Americans love Costa Rica so much have everything to do with the catharsis of being in a land that has so much nature in it. We may not even consciously understand why we love it here so much. But I contend that the abundance of nature all around us here has an awful lot to do with it. High density human habitation has been proven to run the animals and birds out, effectively negating the positive things that we moved here for in the first place.

In this particular scenario, I lose. My cohort in real estate is going to win the listing. But what if – what if this seller had heard the “keep it large” idea from my peer, and then heard it from me, and then maybe heard it from the next realtor he invited to help him appraise and market his land? International economist with vast real estate development experience be damned, I wonder if he wouldn’t stop and consider letting us market the land with that bent: “this is not really a good development piece. Sure, there is room here but your neighbors all have large estate parcels and consequently, there is lots of wildlife here. We are hoping to keep it this way.”

This article is the second of my “Struggles of Conscience” series. I hope to here explain how I feel that a borderline tree hugger like myself can in fact effect a healthy influence in this amazing part of the globe from within the industry.

I know, you are thinking: “what an idealist”. You may even doubt that the idealism would hold up when the bucks really get flowing. Well, I would hope that the integrity would hold. My father used to tell me about the guy that approached the gal and said: “Would you sleep with me for $1,000,000?” to which the gal replied “of course”, to which the guy says, “would you take $10.00?”, to which she says: “what do you think I am, a whore?” His reply: “we have already established that, now we are just negotiating price.”

There is going to be one more installment, well that is the plan right now, of the “Struggles of Conscience” series. Part III is going to give an example of the ideal in practice, on it’s own, with no influence from me. I am an observer of it, and I’ll relate it in it’s detail. Stay tuned…

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I am a real estate agent in Costa Rica. I am also a borderline tree hugger. Oxymoron, right? Granted, I sell property here that has been developed by someone else who likely had to cut a road into the building site. He / she may also have purchased a large tract of land known here as a finca, and then went through the process of subdividing and bringing in the infrastructure necessary for human habitation. I do sell these properties, and so one might think that I, along with all of my professional peers here, are a part of the problem, ecologically speaking. I hope not.

My first 5 years here in Costa Rica, I started up a small Internet marketing company that actually worked, to a limited degree. My wife and I had some funds from the sale of a property in Colorado back in the States and felt that we would use those funds to provide the milti-lingual, multi-cultural experience of living in Costa Rica for ourselves and our children. We understood that making money in a foreign land was iffy at best and so we were prepared to use up what funds we had to provide this experience for ourselves. We calculated that right about when the kids were grown and ready to go off on their own, as is the custom of our culture, we would then turn our attention to making money. I would be in my mid forties, which would likely be my earning prime, so I could go back to the States and jump back into the market and work toward retirement at that point.

I am right on track with one difference. I didn’t need to go back to the States. Real Estate has afforded me the option of staying here and working toward my retirement. As regards my Internet business, it actually did quite well, but only slowed down the out-go of our funds. At that time here in the Dominical area there simply wasn’t the money necessary to pay well for Internet services. This has changed now though. Internet marketing is big business here.

When I first considered getting into real estate, I had a struggle of conscience. Was I really willing to jump into the industry that was involved with the development of this amazing and beautiful and delicate country? No, I wasn’t… yes I… well if… and on went the struggle. A lucrative offer was on the table from a local developer for me to start a company. Since I was without funds at that time, this was the only way that it could happen. But I was torn. Maybe if I went back to the States and got back into the environmentally sound industry of art marketing I would feel better about that. (Although, there has been some controversy around the use of yellow pigment. There was talk of banning “yellow” due to ecological concerns. I didn’t track that issue so I’m not sure how it turned out.) But I really wanted to stay here in Costa Rica, this had become my home. Would I be selling out to get into real estate?

Well, if it is “selling out”, then that is what I did. However, I did come up with a point of reason that enables me to represent myself as a “borderline tree-hugger”. By the way, I say borderline since I am not an extreme tree hugger. I really do feel that trees are the answer. I feel heart-sad when I am walking in the jungle and I come upon a large Guanacaste tree, or a Jabillo that is as big around as my truck or bigger. Just standing underneath one of these isolated behemoths of a time gone by has a wonderful affect on the human spirit. Shade, cool air motion, a moist healthy feel to the air as one breaths it in. There is a little ecosystem there, complete with lizards, frogs, birds, all manner of insects, but almost never bothersome. What would it have been like to live at that time prior to these trees being cut down? To walk under the canopy on the resulting soft loam. Now when we walk through the jungle, we oftentimes have to hack through the brush. Under the big guys there is no hacking necessary. It is park like with the under-story plants thoughtfully placed in their decorative places by an intelligent unseen hand.

These trees hold the soil, process massive amounts of carbon, and provide solace to over stressed humans. Need I say more? Trees are important.

So, is it possible that I could actually enter into this profession and affect a healthy influence from within? Looking back over my first 3 years in the business, I’d say that yes, I have been able to and am doing so. Bear with me as I relate an experience I had the other day that has helped me to better appreciate this now than when I originally made my decision. To be continued…
Read Part II of “Struggles of Conscience”

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