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

I think that in every real estate transaction that I have been involved in here in Costa Rica, the buyer has opted to use a Costa Rica corporation to purchase the property. I have explained the pros and cons various ways when asked, but I don’t think that I have ever put it as well as an e-mail that I was just copied on from one of the San Buenas Golf Resort partners. I include it here for the benefit of readers of this blog.

The bottom line is you should always conduct business in CR via a corporation. There are definite tax and liability implications. Canadian residents are lucky…any income earned outside of Canada is not taxed by Canada. The US is different, all income, regardless of where it is earned, is taxed. CR and the US do not have a tax treaty, so you will pay the CR government 30% and the US government 35% if the shares are in your name.
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I have broken one of my cardinal rules of Pure Real Estate Brokering. Since getting involved in Costa Rica real Estate some years ago, I have always made it a part of my presentation to disclose that I don’t have a personal vested interest in the properties that I am marketing. If there has been an exception to this, such as a motivated seller that is offering a “spiff” or additional pay directly to the sales agent on a given property, I have disclosed this as well. I have basically done business here based on the addage, “To Find You Your Property”, meaning “Lets find the one that is right for you“, and not “lets find the one that your real estate guy makes the most money on.” Pure brokering is a beautiful thing.

Having said that, I would like to announce that I am now a partner in the first golf course to go in to Costa Rica’s southern zone. (My partners are wondering if allowing me in was such a good idea since I have delayed notifying you, the readers of my blog and my client and prospect lists, about the project.) I have held off a little bit since the nature of the project at this point in time is very “pre”, in that it is early. What this means to a possible buyer is, tremendous upside potential and tremendous value for anyone who might be looking to relocate to Costa Rica and want to live the golf course community life-style.

Here’s The “Why”
I have written quite a bit about the real estate boom in the Dominical area and how it has spread out from there in all directions. There is a good amount of speculation going on inland from Dominical up to San Isidro. To the north, the road between Quepos/Manuel Antonio and Dominical is a 25 mile stretch that is bumpy and awful to drive, but offers great potential for after when the road is paved. And then there is the south, towards The Osa peninsula. That is where the majority of development and speculation is now going on. There are a number of factors that feed the southern direction as the place to go. One is the impending International airport. I know, you say: “haven’t they been talking about that airport for a long time?” Answer: “yes, they have”. However, we have now, in the past few days, personally witnessed the president of Costa Rica signing off on the project. (see photo)

The other points mentioned also provide indicators that the zone is a great place to invest, and to consider for re-location and retirement. When that road gets paved from Manuel Antonio down to Dominical and beyond, the San Buenas Golf Resort will be then located about an hour, easy driving from the number 1 (numero uno) tourist destination in Costa Rica. Already the highway that services the coastline from Dominical towards the south is regarded by many as the nicest highway in the country.

Anyway, the indicators are strong, and the lifestyle offered is tremendous.

Ecological Concerns: We are contracted with some of the brightest stars in “green” technology. I have posted a mission statement of sorts for our philosophy in developing this golf course.
Click here to view.
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
This is taken from “Our Common Future” which is a report from the UN World Commission on Environment and Development.

This project is a work in progress. I have posted it quickly due to the “pre” nature of the opportunity at this moment. The buy in price of $79,900 is not assured for any time.