Archive | Ecuador for Investors

A sneak peek into the rose business in Ecuador


Roses are big money here in the Andes.  

Both Ecuador and neighboring Colombia are deep in the business while flowers are chief exports.  

This week I had the chance to sit down with a 14-year vet rose farmer at his place during my research for my soon-to-be-released Insiders Guide to Agro-businesses in Ecuador.  

I’m also planning a little agro-investment of my own.  

Ecuador roses are considered higher quality than the ones grown in most countries because they were grown at a higher altitude giving them a natural longer-lasting shelf life.  

Grabbing his cup of tea, my friend began, “to start its much more profitable to buy comparable land and build your own farm from scratch.”

As most producing flower farms, if you can find one for sale, often go for a half million or more.  

Start up costs, Investment

But thats the kicker, if you know where (and how) to look, my friend states, you can find land ideal for flower growing for around $15-20k per hectare.  

And you’d need at least 3 hectares for the farm to be really profitable.  

Once you acquire the land, my friend continues, you’d need to invest about $60-70k per hectare to prepare the soil and build the greenhouses.

$15k x 3 = $45k PLUS $60k x 3 = $180k TOTAL $225k on the low end.

Income and Production

You’d then be able to fit 80,000 plants per hectare.  

And each plant gives one rose per every 3 months.  

The roses sell to importers in the USA for around $.25 cents per rose FOB wholesale.  Europe pays more, often offering around .35-.38 cents per rose.  

My friend continues, “but you have to time your production right to hit the predictable demand surges (and price upticks) around western holidays like Valentines Day.” 

Costs

My friend explains that organic fertilizers and other irrigation costs total about $1000 per hectare per month.  

Plus you need about 8 pickers per hectare making the basic Ecuador wage ($340/month each) and you’ll need one sales manager ($1200/month), one production/farm manager like him for ($1500/month), one secretary (minimum wage $340/month) and one export coordinator ($5-600/month)who is in charge of filing all the paperwork needing during exporting and getting the permits.

Profit 

3 hectare farm= 240,000 plants= 240,000 roses every three months = 80,000 roses monthly sold at the lower USA importer price of $.25 a rose = $20,000 net income.  

Land and general production variable costs 3 hectares ($1000 per hectare per month) total=$3000 PLUS labor costs $1500+$1200+$600+$8500= $14,800

But with time as your retain the best pickers you can greatly reduce the number of pickers you need and reduce the labor cost even more if you manage your own sales.  

Total (conservative) estimated monthly profit projection of 3 hectare flower farm = $5200.  

Risks

There aren’t many risks to flower growing in Ecuador, that’s why its such a big industry.  

If there is a frost, it would only kill the flowers, not the plant, but this obviously isnt common in Ecuador where here on the equator you can bank on the climate being the same and predictable all year round.  

But unlike other crops in Ecuador where all you have to do is produce it and drop it off at the processor at the corner, and they’re guaranteed to take it, with roses you actually have to get out there and sell and hire a full-time sales manager or you could be left with unsold flowers on your hands.  

What about the technical aspect of the actual flower-growing part (which you know nothing about)?  

That’s what you hire a farm manager to do.  

So where’s best to find land ideal for flower farming and the best farm managers?  

For that and much more subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Investor News/Analysis

Will your bags get stuck when moving to Ecuador?

“But I was told if I bought a first-class bus ticket i could take as many bags as I wanted under the bus free.” A friend of mine recently implored at the Quito bus station on his way to Loja.

“Nope, sorry, thats not correct.” The bus attendent flatly stated.  

He and his wife had about 20 bags.  And they had been given bad information, but it was too late.  

Like many these days, they were moving to Ecuador.  

Final destination: Vilcabamba.  

Touch-down point: Quito International Airport.  

You see, Ecuador only has two international airports… Quito and Guayaquil.  

Once you get your things from your home country to Quito or Guayaquil, what are your options?  

How can you move your things both cheaply and securely once in Ecuador?  

Here’s the best 6 options I know about:

1. Airline checked bags.  When connecting domestically, the local airlines only allow one checked bag of 20 kilos (44 pounds) and one carry-on of 8 kilos (17.5 pounds).  

After that, you have to pay $1.50 extra per kilo and maximum you are allowed only a second checked bag with TAME.  With Aerogal, you can have more checked bags but there is still the $1.50 per kilo excess fee.  

So with the airlines, for an extra 20 kilo bag you are looking at $33 to move it to your final destination in Ecuador.  

2. Airline Cargo.  Or just outside the airport in Quito or Guayaquil you can mail the bags through TAMEs Cargo department paying $.70 per kilo.  No limit to how many bags you can send.  They arrive the same day if sent in the morning. So that same 20 kilo bag would cost $14.  

LAN, another domestic Ecuador airline provider, does not provide cargo services except from Quito to Guayaquil or to the Galapagos.

3. SERVIENTREGA.  You could also mail that same 20 kilo bag via a nationwide service called SERVIENTREGA for $15 for the same 20 kilo bag or $17.50 for a 50 pound bag.  The difference is Servientrega delivers your goods to a specific address anywhere in Ecuador door-to-door.  And if they cant find the address you can still track the bag with a tracking number and go to the nearest office for you and pick your bag up.  The nearest SERVIENTREGA office to the Quito airport is in the next small town over about 15 minutes from the airport called PIFO.  In Guayaquil, Servientrega has offices right next to the airport heading towards the bus station.  Usually the package arrives the next day after mailing.  

4. The Ecuador Post Office.  Ecuador does have a postal service that is getting more reliable called CORREOS ECUADOR.  But you can only send packages or bags within Ecuador with a max limit of 30 pounds.  Not doable for this situation.  

5. The Local Bus Lines.  Another option would be to do like most the locals do and send your bags as cargo with the bus lines in Ecuador.  Pick a bus line with your desired destination and send it with them under the bus.  They give you a receipt and then the person you name as the recipient will need to go and pick the bags up upon arrival.  For instance, if arriving to Quito, the bus line LA LOJA with offices diagonal to the Hotel Marriot offer cargo service from Quito to Loja for $10 per bag up to 80 pounds.  The bus line Reina de Camino was the cheapest I found to ship bags from Quito to Manta for just $6 per bag up to 60 pounds.  They have their cargo offices on 18 de septiembre and Manuel Larrea near the Parque Ejido.  

The PANAMERICANA bus line with offices near COLON y AMAZONAS in Quito ship cargo to Cuenca for $8 per bag.  For many other destinations in Ecuador Id go straight to the cargo docks at the enormous Quitumbe Bus Station in South Quito.  

6. The Freight Companies.  Another interesting option would be to send your bags with the freight trucks in Quito although it is not necessarily cheaper than shipping with the bus lines.  There is CITAL on Eloy Alfaro at the ENTRADA AL COMITE DEL PUEBLO in North Quito which goes to Loja, Zamora and other destinations in the far south of Ecuador daily from Quito… the cost is $10 per 50-60 pound bag to ship with them.  And there is ORTIZ, currently the cheapest option I know of to get numerous bags from Quito to Cuenca, at just $4 per 50-60 pound bag.  

So what did my friends do?  

They paid the $10 per bag to ship their excess bags under the bus.

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Ecuador Q&A

Why Playas is a dud

I got an interesting article from an “expert” forwarded to me this week about how great Playas, Ecuador is.

Insert YAWN here.

My response…

Are you serious? Have you actually been to Playas?

Spent significant time there? Done business there?

I have.

Trust me, there are much better options on the Ecuador coast for investors in 2014.

Sure, Playas looks good on paper… a small beach town near the big malls, hospitals and international airport of Guayaquil, the biggest city in Ecuador.

But the truth is… Playas was the place to invest… 5-6 years ago.

Not now.

Its still the crappy place it was then… but at least then it was CHEAP.

If you´re going to sell me a turd, it better be cheap!

The truth about Playas circa 2014 is that the town is still unattractive, lacks infrastructure for a comfortable expat existence same as it was 6 years ago.

The beach is not attractive comparatively to many other beaches in Ecuador. The beach is horrendously big to the point of just walking across it reminds me of crossing the Sahara desert by foot.

The water. Well, its murky. Playas is situated right where a huge dirty river delta meets the ocean. Its also a bit choppy for comfortable swimming yet the waves aren´t that nice for surfing.

The beachfront… overpriced and all developed due to all the money the wealthy Guayaquil folks have poured into the place.

I know these people. To them, all they know for beaches are Playas, Salinas and the new kid on the block, Montanita. Thats where their beach universe ends.

Nowadays, for a beachfront property in this area you are looking at a six figure investment for even a small house on a tiny lot.

I know of one 3 bedroom 2 bath place beachfront but still far from the water due to the boardwalk out front and big beach that sold for a bit over $100k. Another 2 bedroom crumbling place I know of two blocks back sold for $40k.

Go to the north or south of the city and prices go up even more as many Guayaquil folks have their beachfront villa there.

Playas is actually the same distance to Guayaquil as Salinas in travel time although on the map it looks closer. You´re still looking at 1 hour 30 minutes to 2 hours but the buses that service Playas are chicken buses compared to the nice air conditioned ones that service Salinas.

Unlike most coastal Ecuadorian towns Playas is so spread out you better have a car to live here!

Also, for land or property purchases the municipal in Playas is a royal pain-in-the-arse if you´ve had the displeasure (like myself) to have to work with them.

Other municipalities on the coast like in Manta, PortoViejo or even Santa Elena (Salinas) are MUCH nicer and more efficient.

The seafood is good, but so is it in about anywhere else on the coast of Ecuador.

Basic services like water, electric and Internet… iffy at best. In other words they come and go. Much better on a lot of other beaches in Ecuador.

Also, in Playas, you are REALLY far removed from everything.

Think REMOTE.

You are still an hour to an hour and a half from the next nearest town or city.

In the winter months of January, February and March it rains a lot… its humid and boy are there a lot of mosquitos. Place reminds of Guayaquil (where I lived for about a year.)

Playas also lacks the nice onshore breeze the rest of the more west facing Ecuador coast gets.

Its true the sun comes out more here than on other beaches in Ecuador but I also find it more intense, burning white skin like eggs on a skillet. Plus with the beach so wide theres no where to take cover.

As for Playas, leaving it off your beach property hunting itinerary is a good bet.

The “value” price-quality just isn´t there.

So where is a great investment on the coast right now?

Stay tuned to this newsletter and soon you´ll find out.

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Ecuador Q&A

How much to make your own road in Ecuador?

I’ve been there, man.

I still remember that day about 2 years ago.

I had a chance to buy a whole mountain with an oceanview behind the quaint little coastal town of Olon, Ecuador.

For $4,000 dollars.

But I passed.

It was rainy season.

And when my Ecuadorian friend and I started walking towards the lot, we didn’t make it cause the road was SO muddy access was impossible.

In fact, some of the cheapest lots still out there are ones that are currently not accessible.

So how much does it cost to cut or lay your own road in Ecuador?

Well, this week I talked to a friend of mine who bought a beachfront mountain himself in Ecuador and cut his own road near Jama on the north coast.

He said upon purchase of his lot he had to cut a 250 meter (820 ft) road just to access his property.

First, he had to hire a dozer with driver that for $90 a day cleared off the shrubs and top soil to make the road. The dozer worked for about 11 days. Total $990.

Then, he had to buy rocks to cover the road.

$35 per truck load. Each load brought rocks for 8 cubic yards.

For his 250 meter road he needed 200 truck loads. Total $7,000.

Then after the rocks where placed he had to hire a dozer again for 3 days to compact the rocks. Total $270.

That’s it!

He had his road and his property just doubled in value for $990+$7,000+$270= $8260!

One tip he mentioned for anyone having to cut a road in Ecuador is to make sure they make the road with a crown shape so the water runs off along the sides and not overtop it.

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Ecuador Q&A

Whats your perfect altitude in Ecuador?

I´m spoiled.

I´ve been in Ecuador, a tropical mountainous country, too long where you can pick the elevation for you.

And wherever you pick has the same climate all year round.

For instance, where I live in a valley of Quito the elevation is 2398 meters (7867 ft) above sea level.

The climate is just perfect for me.

23-27 C (73-80 F) in the daytime, 15 C (59 F) in the night all year long.

And there´s no mosquitos.

Too high.

However, the next town over is 50 meters higher at 2450 meters (8038 ft) which is about 3-4 F cooler and is too cold for me!

But the town on the other side of where I live back towards Quito (Tumbaco) is about 150 meters lower than where I live at 2268 meters (7440 ft) which is WAY too hot for me, particularly at night when the temperature only dips to around 20 C (68 F). And the mosquitos start coming out!

Now, Quito city proper which is about an hour from me to the east, forget about it, WAY too cold for me. It is about 400 meters higher than where I live at 2800 meters (9186 ft) and WAY TOO COLD. Especially at night or when its raining when Quito drops to 9 C (48 F). Thats cold, especially when most homes dont have heat installed.

So if Quito, Cuenca or Loja are too high and cold for you, try the surrounding areas where you just might find your perfect altitude!

For instance, warmer, lower areas near Quito include… The Valley of Los Chillos, Cumbaya, Tumbaco, Checa, Pifo, Puembo, Tababela and more.

Warmer areas near Cuenca include… Paute, The Valley of Yunguilla, Gualaceo, Chordeleg.

Warmer areas near Loja include… Zamora, Zaruma, Malacatos, Vilcabamba.

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Ecuador Q&A

The ultimate expat-mobile for the beach in Ecuador for $250

motor-bicycle-ecuador

Trust me, I´ve been there.

I mean, living in a small town on the coast of Ecuador.

The town (Manglaralto) was 4 km from Montanita and had a total of 3 streets parallel to the ocean with about 20 streets perpendicular.

Tiny.

You know, I didn´t really need or want a car.

I could use the frequent/cheap buses for long distances.

Plus, with car prices double or triple what im used to in the US, I wasn´t in a hurry to buy one.

But walking 20 minutes just to buy some fish or veggies can get tiring.

So… let me introduce the ideal vehicle for an expat on the coast of Ecuador… the motor-bicycle.

Literally, its a BICYCLE with a little motor on it and a half gallon gas tank.

You can pedal it like a normal bike if you feeling like getting some exercise or turn on the little motor and away you go.

The max speed with the motor on is 40 km per hr (25mph).

Did I mention you can get 100 km (62 miles) to the gallon!?

And don´t worry about parking, just chain it up (its a bike)!

Got groceries? Put a basket on it.

And no special licenses or insurance needed (so the local policia tell me).

Did I mention one of these little motors put on your bicycle in Ecuador only costs around $250?

Obviously not great for long distances or highway riding but great for zipping around your little beach town.

One place you can buy one I know of in Ecuador is in the suburb of Quito called Tumbaco. The shop is named Taller Turbo and one contact number is 02 2373946.

But they sell them on the coast too.

And by the way, all the cool kids have one.

And to learn how to find the unpublished property deals no one else knows about, subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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Posted in Ecuador for Investors, Ecuador Q&A

The secret to finding anything in Ecuador


A friend recently asked…

“Where can I find some duct tape and a tennis ball in Ecuador.” 

Referring to his mom sitting next to him in the case she didn´t shut her trap.  

But seriously, if you´re living in a small town in Ecuador (like me) far from the nearest Supermaxi big box store, how can you find the really random stuff. 

Like an office chair with arm rests.  

A sandwich maker.  

A permanent marker.  

You know, really random stuff.  

Don´t ask on a public forum online, that will just get people annoyed at you.  

Instead, tanslate what you need using a friend or Google Translator and then…

…find a local taxi driver.  

He has to be LOCAL.  

And I can pretty much guarantee if you say the thing in Spanish he will know where to buy it and take you there.  

Taxi drivers are an amazing resource for an expat in Ecuador or anywhere for that matter.  

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Posted in Ecuador for Investors, Ecuador Q&A

DIY: Ecuador residency visa in 4 hours or less… for pensioners

 

This week, I broke my own record.

About 4 hours of pounding the pavement in Manta, Ecuador.

2 permanent residency visas for friends of mine.

And yes, its something easy enough you could actually do it yourself, or maybe with the help of someone that speaks Spanish.

You certainly dont have to pay a lawyer thousands to help with your visa.

Here´s the whole process I did:

1. First, make sure my friends brought down the following documents from the USA, their home country…

- Proof of pension (for the both of them to get the visa at least one of them needs a pension of $900 or higher, for a single person the requirement is min $800)

- Marriage certificate

- Birth certificates (just in case, although lately they are no longer asking for these)

- Criminial record check from where they ve lived the last 5 years (the document itself can be no older than 6 months)

- Certificate from the Ecuador consulate in your home country certifying the source of pension document. ( Certificado determinando la percepción de dicha jubilación, pensión) This is a new one since I helped someone with this last year! 

All the above documents need to be apostilled by the Secetary of State in the State they are issued, and the proof of pension needs to be certified by the nearest Ecuador Consulate before coming.

2. Then, we went straight to the Immigration police (in Manta its the Immigration office on 4 de Noviembre, in Quito its the immigration office across from the Mall El Jardin), to get a document for each showing all their migratory movements in and out of Ecuador called the Certificado de Movimiento Migratorio. (cost $5 each) Elapsed time 20 minutes.
3. Then, we made color copies of the info page of both their passports and of the page showing their latest stamp upon entry to Ecuador.  We also had passport photos taken of each.  And then we printed off the official visa application form found here so each person could fill one in. I also bought a manilla folder to put all their documents.  Elapsed time 15 minutes.

4. Then I translated the documents they brought from the States and went to a local notary next to the Pichincha Bank in the center of Manta where I had to verify my signiture as the document translator and get something called a RECONOCIMIENTO DE FIRMA.  ($20).  Anyone can translate the documents except the interested party.  Elapsed time 1 hour 45 minutes.

5. Then in an internet cafe across the street from the bus terminal in the center of Manta I wrote up in Spanish a simple letter stating to the immigration department what they want to do (retire in Ecuador) and why they want to retire here (I said the weather).  Example of letter here.  Elapsed time 10 minutes.

6. Went with all the documents and my friends who were applying (they have to be present or you need to have a power of attorney document notarized) to the Ministerio de Relaciones Exteriores in the center of town in between the boardwalk area (Malecon) and the big Pichincha Bank.  We got a turn and there was no wait and we turned in the folder with all the above. They also had to pay the application fee of $30 each.   Click here for the official list of requirements.  Elapsed time 20 minutes.

What now?

In two weeks they´ll have to go back to that same office once their visas are approved, pay the visa fee to the window ($320 each one time only) and then they will place the visas in the passports and give you 30 days to get a cedula which is your official Ecuadorian ID card (which (as of June 2014) you can not currently do in Manta, only Quito, Guayaquil or Cuenca).

Then they will be permanent Ecuador residents who can stay in country as long as they like.

Not bad for 4 hours.

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Posted in Ecuador for Investors, Ecuador Q&A

Example Ecuador Visa Solicitation Letter

Here´s an example of the official letter immigration in Ecuador asks for when you apply for a visa, just plug in your info and where you are applying and play!
—BEGIN—

2 de junio, 2013.

Manta, Ecuador.

Estimados.

Coordinacion Zonal 4 Manta

Ministerio de Relaciones Exteriores y Movimiento Humano.

Por medio del presente, yo, John Doe con número del pasaporte 111111111 de nacionalidad estadounidense solicito que se me conceda visa 9-1 de Pensionista y Visa 9-VI de amparo en mi visa 9-1 a mi conyuge Suzy Q con número del pasaporte 111111222 de nacionalidad estadounidense. Ya que hemos decidido residir tiempo completoen la costa manabita ecuatoriana por cuestiones de clima y salud.

Atentamente,

_______________________

John Doe

Número Pasaporte: XXXXXXXXXX
— END—-

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Posted in Ecuador for Investors, Ecuador Q&A

5 must-have apps before you go to Ecuador

 

Language used to be a barrier when traveling or living abroad in a place like Ecuador.

Not anymore.

Not with todays technology.

Even 2 or 3 years ago had nothing on what we got today.

Here are my favorite 5 apps for your smart-phone that will seriously break any communication barriers you have in foreign countries…

Without you having to study the local language even for a minute!

5. Word Lens.  This is a truly amazing free app you download to your phone and afterward you just hover your phone over text written in a different language, and this app will make the text magically appear in the language of your choice.  And its accurate too!  Amazing.

4. Translator App from Google.  This free app is amazing!  Want to say something in Spanish, Portuguese, Arabic, Chinese or in one of several dozen other languages supported by this app?  Thought you had to study, and actually learn that sh·t? , take courses?  Hahaha, not anymore man.  All you have to do is say the sentence or words you want to say in English and this app will put your words to text, then translate your words to text in the other language AND then it will say the words you want to say in the other language.  And its amazingly accurate!  You may look wierd talking through your phone to someone but its still cool to hear yourself say anything you want in a language like Arabic or Chinese, let alone an easy one like Spanish.  And yes, you can turn it around and have people speak into your phone in their language and the app can spit out what they´re saying in English too!  Love this one.

3. Busuu.  If you do feel like actually studing a foreign language then the best FREE program Ive found that you can download right to your phone is the Busuu app.  Dozens of colorful interactive courses await you, a great way to kill time while on a plane or bus.

2. OneSpeak.  OneSpeak is an interesting little app that is meant to get you out of a pinch in a foreign country by communicating for the basics by pointing to universally understood pictures.

1. WhatsApp / Viber / Skype apps.  I grouped these together because for most they all do pretty much the same thing.  Once installed on your phone (free) WhatsApp is a free instant messaging service based off your phone number which is quite popular in Ecuador.  Viber is a service you can use to call for free to other Viber members from your phone over the net.  Skype is the old-timer but stil arguably best VoIP service for free internet calling to other members and calls to other numbers outside Skype.

There you go.

Now you can communicate with non-English speakers… today!

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Posted in Ecuador for Investors, Expat Lifestyle

The ONLY type of hotel I’d put in Cuenca

I get it all the time.

People know I’m in the hotel biz…

…and they tell me they have a property and are thinking about putting a hotel in Cuenca.

But truth is, I would NOT put a hotel in Cuenca, except for one type.

You see, Cuenca is already loaded with good hotels, and they’re cheap!

An acceptable option at $10-15 per person per night can be found quite quickly.

The type of hotel I’d put in Cuenca is an apart-hotel.

The difference is the rooms will often be mini-apartments with at least two different ambiances, a living/cooking area and the bedroom.

Unlike normal hotels the rooms have a kitchen or place to cook as most people would get tired of eating in the street for weeks on end.

And they are meant for longer stays.

Usually a few weeks, maybe a few months at a time with of course special weekly and monthly rates.

And they often serve as a “half-way” home for folks who recently arrive in Cuenca and begin the search for their permanent home.

An apart-hotel is a great option for people because agreeing to rent something long-term before they arrive and see it is a big mistake.

Best to look around once here.

And at least initially its nice to take advantage of a few of the services of a hotel like an attentive, knowledgable front desk staff, laundry service and WIFI Internet from day one yet still be able to cook for yourself and enjoy the privacy of your own place as you get your feet wet in a new country.

You could even sell off the individual suites to private owners and continue to manage them and rent them out in a property-manager-type role.

The really neat thing is you could promote it as both a hotel and a condo rental.

There are already a few of these type hotels that exist in Cuenca, but I’ve seen the demand in the area to justify another well-located good one.

More so by far than anywhere else in Ecuador, a lot of expats are moving to Cuenca.

That’s the hospitality niche I’d attack in Cuenca.

Any takers?

You can count me in.

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Posted in Ecuador for Investors, Investor News/Analysis

Sold! Montanita beach house: from $15 to $45k

“There it is.” I said as I signed the sales deed this week.

I sold my 4 bedroom, 3 bath beach house near Montanita for $45k.

The same one I bought entering 2012 for $15k.

Once I bought the property I put about $2k into it to clean it out and lightly furnish it with the basics being a stove and a few plates, a mini-fridge and a few beds.

The idea was to rent it as a budget short term rental and keep it as my own weekend getaway when I lived in hot, humid, muggy Guayaquil.

After 3 months or so of owning the property someone who had rented the property offered me $40k to buy it.

I mistakingly turned it down.

Meanwhile, I quickly discovered there was a huge demand in that area of the coast for inexpensive rentals in the $300-450 a month range.

In 2012 I kept it rented about 90% of time.

So much so in late 2012 I decided to build two one-bedroom one-bath beach bungalows on the same property, all with a nice oceanview and a 30 minute walk from the center of Montanita.  A pre-fabricated wooden one for a total with furnishings of around $4500, and a brick/bamboo bungalow for around $6500.  They both rented well, the brick/bamboo one more so, for around $230 a month each.

Both were done building in about a month.

Then in early 2013 I decided to put the property for sale for $60k because a friend of mine in the area said the area was hot and that I could get $80k.

I did start to notice the influx of foreigners in my tiny little town next to Montanita (Manglaralto) and the building going on all around me.

Plus, the towns streets had just been paved.

I chose not to work with any realtors, just post it online myself.

And after a few months I didn’t get any bites, so I decided to take the property off the market as I didn’t really want to sell it at the time anyway.

But after moving to Quito, as my business grew in 2013, I had less and less time to manage the rental from a distance.

The property deteriorated and became harder to rent.

Often 6-8 months would pass between visits from myself.

Then in December of 2013, i decided to repost the property online for sale, this time for $45k.

And within two days I had several interested folks, one foreigner that lived in aother part of Ecuador called so worried I would sell it he gave me a deposit of $250 just to hold it til the weekend so he could make it over to see the place.

I believe the increased interest this time around had to do with both the lesser price and the time of year, right at the beginning of high season on the coast when most other folks take their properties offline.

But when he actually saw the place he wasn’t impressed.

You see, it is an Ecuadorian-made very simple dwelling, needs work, and certainly not up to most Americans standards.

He passed.

But I continued to get a lot of interest and several people a week wrote and visited the property with my caretaker.

In the meantime, I got a few low-ball offers but finally in the third month I had the property for sale (March 2014) I got a call from a real estate agent in Montanita saying he had an interested buyer.

He worked as a buyers agent and was charging the buyer 5% commission but not charging me.

The person from the US visited the property several times over the next few days and made the offer for my full asking price.  I took it, he deposited $1500 as an earnest deposit.

I then went to the coast after he had already left back to the States to sign the deed to close the sale.  His agent took care of the rest and paid the necessary taxes.

The buyer then wired the rest to my account.

The closing took about two weeks.

Done deal.

Besides what i made renting the property, I made roughly $15-16k off the sale.

Not bad, but I could have made more if I wouldn’t have made the following mistakes…

1. Understand properties in Ecuador (a cash economy), especially higher priced ones, usually (but not always) take a long time to sell.

2. I should not have added the bungalows to the property as they didnt do much for the property value.

3. Don’t get emotionally attached to a property, it should always be for sale from the moment you acquire it for the right price.

4. I should have used local real estate agents from the beginning as it pays to have a salesmen showing the house instead of my older caretaker.

5. Don’t try to do too much with a basic coastal-Ecuadorian (boxy) construction, it is what it is, the only way to make it really nice is to level it and start new.

Other interesting things I learned from owning this property…

- A lot of people like sleeping near a tourist hot spot like Montanita but not right in it.

- As mentioned previously, there is A LOT of demand from foreigners for cheaper rentals on the coast as the properties available go from really cheap and generally unacceptable for foreigners to expensive places over $800 a month.

- There is a MUCH higher demand for rentals on the coast of Ecuador in the North American winter months from late December to early April compared to the rent of the year.

- You can charge a lot more than usual during long weekends and holidays in Ecuador if you market to Ecuadorians.

- Ecuadorians look for rentals with caretakers for security, TVs and Air Conditioning while foreign renters prefer privacy (no onsite caretaker) and NEED WIFI Internet while a TV and AC are not so important.

- It would have paid to have a caretaker that speaks English to help the tenants settle in.

- If possible, it pays to market to foreigners already living somewhere in Ecuador, as most foreigners still in their home countries are generally tire kickers.

- The best way to market your property to Ecuadorians is still the areas Sundaypaper.

So, what’s next?

Another property purchase i’m sure, but probably on the coast of Ecuador as I still think the best deals for flipping are there.

Stay tuned!

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Posted in Ecuador for Investors, Investor News/Analysis

Who pays what in an Ecuador real estate transaction

 

This week I was involved in an Ecuador real estate transaction.

More on that in my next email.

But it reminded me of something very important to know before you buy property in Ecuador.

To know who typically pays what in a standard Ecuador real property transaction as it may differ from your home country.

Often a foreign buyer will get stuck with paying the whole damn thang because they just didn´t know otherwise.

Typically in Ecuador, unless previously negotiated, the buyer pays all the fees associated with drawing up the new deed and getting it notarized, then registered in the property registrar (escritura y registro en el registro de la propiedad).

The buyer will also pay the tax to the municipal called ALCABALAS.

The seller is expected to pay all past due annual property taxes (PREDIOS) and get the property current.

The seller is also expected to pay the capital gains tax called PLUSVALIA which is calculated based on the official assessed value from when the seller bought the property to when he sells it (not based on actual purchase price).

The seller is also expected to provide proof all the energy and water bills are current.

This is how most local Ecuadorians do it.

Now you know so you don´t get stuck footing the whole bill as the buyer, cause they will lay it to you if they see you don´t know!

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Posted in Ecuador for Investors, Investor News/Analysis

8 things to know before you visit Salinas, Ecuador

“It was too cloudy.”

“It was a ghost town.”

I hear things like this all the time when people describe Salinas, Ecuador.

They just don´t know.

Right now I´m checking in from Salinas, Ecuador on a bluebird sunny day.

The ocean is sapphire blue and very inviting, not a cloud in the sky, and I´m surrounded by women in bikinis (at least thats what Im noticing).

People are on their balconies drinking beer with their friends.

Whats not to like?

But you have to know a few things before you visit (or live in) Salinas to get the most out of it… and be sure to define what you want.

1. Know the weather.  From mid-December to early-May most days are sunny and warm.  From late-May to mid-December its generally overcast.  It makes a big difference!  The ocean turns from blue to grey.  All year it almost never rains on this peninsula blessing it with low humidity.  For me, April is the best month to visit.  Right now!

2. The seasons.  If you like being surrounded by people, come in the high season from late December to early April, specifically on the weekends.  If you like empty beaches come from late April to early December.

3. When to buy.  If you are looking to purchase real estate, be sure to go in low season, when the weather is bleak, and everyone has their ´for sale´ signs out.  The difference in amount of inventory available is astonishing.  The best months to property hunt are August, September, October, right in the midst of low season and when the high season still seems far off.  In high season, almost all the locals and expats take down their for sale signs to enjoy their property. As I speak here in April there is very little for sale.  Ill be back in two months.

4. Where to eat.  People who say they dont like the food here must not have known where to eat.  Try the local treat, fish fillet soup “Chupe de Pescado” at the Restaurante Herminia on the Malecon.  Try eating where the locals eat at the open-air food court Picanteria Super Fausto near the Bank of Pichincha.  Try anything on the menu labeled with ” al ajillo (garlic flavored seafood)” “encebollado”, “ceviche”, ” sancocho” all delicious choices.  For something fried you could always try the “camarones apanados (breaded shrimp)” or the cangrejo (crab).

5. Where to hang out and stay.  Do you want to hang out with other foreigners or the locals?  To find the expat-gringo crowd hang out at the Smokin BBQ next to the El Carruaje Hotel on the boardwalk or try the bar at Hostal Aqui or the restaurants at Big Ralphs or Cocos Hostal.  Go elsewhere if you prefer to hang with the locals.  For cheap places away from the gringo scene you could try any of the many smaller hotels one row back from the ocean like Marvento or Salinas Suites which usually oscillate around $20 per person depending on the season.   For a luxury place try the Barcelo.

6. What to do and where to shop.  Whale-watching is good fun and possible from late-July to early-September.  People dont realize but at the local travel agencies on the boardwalk you can also hire banana boat rides, four-wheelers and even deep-sea fishing or scuba.  For those living in the area to find any household items you may need try the big box stores at El Paseo Shopping Mall.  To get the freshest seafood at the best prices try the Mercado de Mariscos in La Libertad.  For local handycrafts try the handycraft market near the Banco Pichincha on the boardwalk.

7. What its really like.  Take it for what it is.  Salinas from the beginning was built not as a tourist destination but as a weekend retreat for the wealthy folks from Guayaquil.  Another way to store their wealth.  Its a row of high rise condo buildings along the ocean.  If you go one or two blocks back it gets bleak fast as it pretty much looks the same as it did 10 years ago with not much investment.

8. The best beach?  Chipipe vs the main malecon/ San Lorenzo area.  Chipipe, tucked away in a cove, is the nicest beach in Salinas yet most miss it and stay on the main malecon beach area and then come away unimpressed with the beach at Salinas.  Other nice beaches nearby Salinas include Playa Rosada and Ayangue.

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Posted in Ecuador for Investors, Ecuador Q&A

An Insiders take of the restaurant biz in Ecuador

Something about Ecuador ignites the entrepreneur in all of us.

As my Ecuadorian mentor once told me, “people in Ecuador are more entrepreneurial than in a country like the US because they have to be, there are less decent employment options so you got to employ yourself. ”

I´d agree.

And this week, I´m going to interview my good friend Amir, who moved to Ecuador last year from Canada, and has since started a pizzeria in the Quito (Cumbaya) area.

I met him when he was a new arrival “right off the boat”, if you will.

Enter Amir… 

Amir, tell us about your restaurant?

Sure, the name is MegaPizza and we serve top-notch Italian-Canadian cuisine like pizza, putin, salads, subs, wings and more at reasonable Ecuadorian-style prices.  Specifically, we’ve got the best subs and pizza in all of Ecuador (Note from Domenick: I’d agree.).  The restaurant is right between the main park of Cumbaya and the San Francisco University in one of the top restaurant districts of Quito.

So Amir, why’d you choose Ecuador for living and your business?

Well, its warmer than Montreal, residency is pretty easy, taxes and rent are low comparatively and so are most of the costs of living.  In Canada it was too pricey to start my own place.  A restaurant like mine would rent for $4000 or more per month, utility bills would be several hundred dollars a month and employee costs would be several thousand a month.  In Ecuador, rent, utilities and employee costs are dirt cheap and you don’t have to worry so much about peripheal costs like insurance while at the same time I’m still charging about the same as i would in Canada for my product.

Why’d you choose Cumbaya for your pizzeria?

I like the warmer climate when compared to nearby Quito (30 minutes away) and it is an affluent neighborhood and lots of residences ideal for delivery.

What were your biggest challenges when starting and running the business?  

The biggest challenge was finding a good place to rent for the business.  It took several months of checking the Internet ads in Spanish, the newspaper and driving around scouting out areas.  A lot of decent places that were available were offered not by the land owner but by the restaurant owner who wished to sell you their business, furniture and lease, often for upwards of $60k or more.  When I already knew the business and knew what I wanted to do i was not interested in buying someone elses know-how and used equipment and furniture.

Finally, we found a large empty locale and inquired with the caretaker and found out it was available, it had no sign, thats how you can often find the best deals in Ecuador.

Also, obviously communication was an issue cause I don’t speak Spanish well.  I took a one-on-one class in Quito for about two months when I first arrived for $6 an hour and that has helped a lot.

What are the lease terms like for your restaurant in Ecuador?

Well, my lease is for one year only with a security deposit equal to one months rent.  The rent is $1500 a month.  The locale has about 6 parking spaces and 90m2 of dining area plus an outdoor patio with capacity for about 50 people (about 15 tables).

Where’d you find your kitchen equipment and furniture needed for the restaurant at the best value?  

Honestly, searching on the Internet in Spanish helped a lot. I knew what I needed cause I worked for many years as an employee of top restaurants in Montreal.  I found one distributor online in Ecuador where I bought most of my kitchen equipment PROMAINEC.  For instance, we bought all new stuff… a 2 door industrial fridge was $2200, the pizza oven $1700, the dough maker $1200, and the stove-grill-hotplate all in one from the LOZADA store in Quito was $1200.

The wooden tables and chairs were ordered custom maid by a local carpenter, they came to $36 for each table and $40 for each chair with a seat cushion built in.  Those were the best prices we could find, it was much better than buying ready made tables and chairs from a place like Megamaxi or Mi Comisariato.

What was the total investment to get your restaurant up and running from scratch?  

Including the security deposit for the lease, about $20,000 USD.

Where the permits difficult to attain?  What permits are needed for us newbies to the business in Ecuador?  

Actually, this part was very easy in Ecuador.  It all starts with the SRI (the IRS tax agency in Ecuador).  You need to get a RUC or tax ID number (free).  Once you have that you need to go to the IEPI or Institute that copyrights Intellectual property in Ecuador to register your company name and logo ($115).  Then you have to go the Municipal and apply for your LUAE or license to operate.  After application they will send inspectors to pass your business, first the firemen (bomberos) and then the health department (salud) and Secretary of Tourism.  After passing the inspections you can pay your annual Municipal patent (patente municipal) (varies by business type and location, around $100-250 annually).  A special license to sell liquor does not seem to be necessary in Ecuador from what we have gathered (we’re still confirming this one).

Where do you source your ingredients and food?  Whats cheaper and whats more expensive compared to Canada?

This part was more tricky in Ecuador than in Canada where one phone call can get you everything you need within a few hours.  The big things like flour and cheese we buy in bulk from distributors we found online.  We had to test the quality of several before we found ones we like.  The prices of things like pizza boxes varied greatly so shop around before you commit.  We often would take the phone numbers of the distributors off the labels of the products in the supermarket chains.  We’d stop the trucks delivering supplies and drinks to stores in the street.  The little things like jalapenos can only be found in the top-end supermarkets like Supermaxi, so we buy those there.

Chicken and fresh produce vegetables are much cheaper in Ecuador than in Canada.

Some things are more expensive in Ecuador, like pepperoni which is $5/kg in Canada while $13/kg in Ecuador.  Some things are cheaper like cheese which is $22/kg in Canada while $7/kg in Ecuador.

What are some interesting things you’ve learned about selling food to Ecuadorians?

Ecuadorians don’t drink much coffee compared to North Americans.  They love hot sauce.  And they’re surprised by all the different pasta options we offer like tomato, pesto and alfredo sauces, but in a pizza shop they usually ignore our fringe offerings and go right for the pizza.

How did you find your staff?  

Well, my friend and I started the business, we are the cooks for now, and my friends brother moved to Ecuador as well to help out.  We hired one waitress to attend the clients and answer the phones (since we dont speak much Spanish).  We pay her $400 a month plus tips which is a bit over the minimum wage in Ecuador for a full-time 40 hour a week employee.  We found her quickly by placing a classfied ad in the Quito Sunday newspaper.

What are your profit margins like for the food you sell?  

Well, if you don’t count the fixed costs like rent and so forth , just taking into the account what we pay for the food itself and what we sell it for the profit is about 70%.  That number can get higher if we sell more and are able to buy in bigger bulk.

How much do you sell on a good day?

Our goal based on our price level, roughly $8 a meal, and restaurant capacity is to sell $40 per table for a total of $1000 of sales per day.  That is a good day for us.

Any other tips for a new restaurant owner wannabe in Ecuador?  

Sure, the cost of living and rent in Ecuador is cheap compared to a place like Canada so take your time to find a good location, it could take several months of searching, don’t kid yourself with an average location, you win before you begin.

How can we learn more about your restaurant or give it a shot ourselves?

Check our our Facebook page MegaPizza Cumbaya to see pics of our food, we are right on the corner of Orellana y Chimborazo in Cumbaya or call 02-603-9983 for more on how to arrive, obviously, we speak English, open 7 days a week.  And on Monday nights we have EXPAT NIGHT from 6-10PM where if you show a foreign passport you get a free beer or beverage of your choice with any meal purchase.

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Posted in Ecuador for Investors, Investor News/Analysis

Why I left Cuenca…

 

I hear it all the time…

“Man, Cuenca was too da** cold and rainy.  I came south to get away from that.  But the coast is too hot and humid for me, I think Ecuador is not for me.”

You’re right.  It’s freakin cold!

Cuenca doesn’t have eternal spring weather like what you’ve probably read elsewhere online, for me, its more like eternal late fall.  I’m talking late October early November in the midwest here.

Cuenca, Quito and Loja are simply cold.

The coast is hot.

But this is the tropics man, all you have to do is find the right elevation that gives you your ideal year round climate.

Like instead of Cuenca, try nearby Gualaceo, Paute or the Yunguilla Valley.  They all are mountain towns that have warmer, yet not too warm, weather.  For you, maybe just right.

Instead of Quito, which is too COLD for me, try living in one of the lower valleys nearby like Tumbaco or thr Valley of Los Chillos, both have much more pleasent truly eternal spring-like weather.

Instead of chilly, overcast Loja, try more mild, sunny nearby Malacatos, Zaruma or Vilcabamba.

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Posted in Ecuador for Investors, Expat Lifestyle

21 Things you can ONLY see in Ecuador

That’s the reason we travel, right?

To see stuff we can’t see in our home country.

Well, here are 21 things you could never see in the USA or Canada (or elsewhere for that matter) but you CAN see in Ecuador.

1.  When pulled over by the cops, Ecuadorians tend to get out of their cars and walk over to the cops and try to reason with them.  If you tried this in the US you would be shot dead on sight and left to lie there in your own pool of blood.

2.  Getting honked at while sitting at a red light.  I’ve only seen this happen in Ecuador, and a lot.  If you tried this in the USA you would make the evening news as a victim of road rage.

3.  Self-made speed bumps.  Thats right, especially along the coast, a lot of folks in small towns decide from one day to the next they’re going to make a speed bump.  Usually they are perfectly camouflagued and right at the end of a speedy curve, yes, they’ll rattle your teeth all right.

4.  Unrefrigerated Milk in a box.  I never seen this in the USA, but its commonplace in Ecuador.

5.  Women in high heels in a grocery store.  No, they are not on their way to a wedding or something, Ecuadorian women will put on heels to go grocery shopping.  Better than the other extreme, boy, did I get tired of watching lazy American college girls who roam around all day still in their pijamas.  I for one hope that trend stays in the US.

6.  At 5’6 getting on a crowded bus I can often still see over the tops of everyones heads.  In the US I would be catching the draft of ‘silent-but-deadlies’ on my forehead.

7.  Love motels.  Maybe I was too nerdy but I never saw one of these in my first 20 or so years of life while living in the USA.  Love motels in Ecuador are pay-by-the-hour places with heart-shaped beds, no windows, and all the channels on the TV are p orn.  You go there to do one specific thing and leave.  My first time in one they looked at me funny when I asked if there was a 10 minute rate.  Seriously, in 10 minutes I’m done, showered, shaven and smoking my second cigarette.

8.  Gas station gas pumpers.  This is a long extinct career in the USA.  But every gas station in Ecuador has them.  I guess they think pulling a lever is too complicated for people.  But what is the training like for these people that help you pump your gas?  I can see it now, “OK men, easy and steady, aim high, don’t go crazy with it, if you get it on the rim you’ll hear it from the misses.  And if you shake it more than 3 times you’re playing with it.”  Maybe thats why only men seem to be qualified for this one.

9.  Coca cola in a bag.  So what happens if you order one of those famous, standard $1.75 Ecuadorian plate lunches to go?  That’s right.  They will give you the coke in a bag.  To look as Ecuadorian as possible you need to proceed to bite the corner of the bag and “suck that titty”.  Come on, don’t be a baby, (no pun intended) we’ve all done it at one point, or various points, in our lives.  Other wierd things in bags can also be seen like ketchup, mayonesse too.  Strange.

10.  Carrots larger than a grown mans forearm.  At the sight of one of these massive carrots one female tourist asked me if everything in Ecuador was that big?  Why yes mam it is.

11.  Cars with 100% tinted windows and police-style strobe lights.  This seems to be permitted in Ecuador cause I see it eveerywhere.  Too bad its not permitted in the US or I would have lost my virginity 2 whole years sooner in that parking lot that one time.  Men understand, this is an important monkey to get off your back.

12.  Roosters that crow at midnight.  Anyone that has lived in the countryside of Ecuador can sympathize with me on this one,  Must be the equator, but rooster in the countryside of Ecuador have a seriously messed up internal clock.

13.  Watching the Metro door close with so many people packed in that someones arm is stuck out the door as the tram starts to pull away.  Only in Ecuador.

14.  Beer and dogs on the beach.  Ah, I remember in when I lived in Southern California dogs were quarantined only to a few very specific beaches and beer was a big no no and could even get you arrested.  In Ecuador, Ecuadorians don’t go to the beach to surf, or jog, or any of that lame stuff.  They go to drink beer, and lots of it!  It would be tough to find an Ecuadorian beach without beer and at least a half dozen stray dogs roaming the cuff.

15.  Chicken feet soup.  theres just some parts of animals we’re not used to seeing in our food, or for sale at the grocery store, like chicken feet, bull balls, kidney, and more.

16.  Screwing screws in with a wrench.  Thats right, I’ve seen Ecuadorian construction workers screwing in screws with a wrench.  I swear, give them a shovel and a hammer and they can build you a house.

17.  Leaving your dirty food tray on your table at the mall.  Thats right, just get up and leave it, if you try to throw it away in the bin you may be tackled from behind.  OK, maybe not, but you are putting someones job in jeapordy who is in charge of cleaning the dirty trays.

18.  Watch as an old lady tries to get off a moving bus.  Ahh, only in Ecuador.

19.  The Drivers Ed class where they teach Ecuadorian drivers that stop signs at night really mean, “flick your headlights, honk twice and then drive right through”.  I guess they couldn’t fit all that text on the sign.

20.  The freelance eye-drop seller that tries to sell on the bus, but when he actually puts it in his own eye to show how to use the product he has to brace himself and wince to get it in.  Can I see that health registration again, please?

21.  The floor-to-ceiling mirrors in the handycap stalls in La Escala Shopping Mall in Cumbaya, a suburb of Quito.  I’ve never seen this anywhere and whoever thought of this should be shot.  I mean, come on, who wants to watch themselves and they’re ‘giving birth’ faces as you re sitting there on the pot?  There’s a certain amount of self-respect you lose for youself after watching yourself in this position.

I know, please don’t rush over to Expedia and buy your ticket to Ecuador too fast now, ok?

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Posted in Ecuador for Investors, Expat Lifestyle

The dirt on Cotacachi, Ecuador: March 2014 Market Report

This week I had the pleasure to interview Olga Plavidal, one of the most knowledgable people I know on the Cotacachi real estate market.

Cotacachi is a small mountainous community a few hours north of Quito, and 15 minutes from Otavalo, which has experienced quite an influx of North American expats in recent years due to many factors like its healthy lifestyle, low costs and mild, comfortably warm year-round climate.  For me, its one of those few places in the world, and even in Ecuador, where you really don´t need heat or AC in your home and you re still comfortable.  Rare.

So lets turn to the local expert on the ground to get the dirt on whats really going on in early 2014…

Enter Olga.

1.    Why did you choose Cotacachi?  

-       I came to Ecuador 3 years ago, stayed in Quito for a month and was making short trips to various destinations. When I came to Cotacachi for a day trip, my soul whispered me: ‘That’s it, darling, that’s your home…’ Some places looked like from the fairy tales to me!

I’ve been captured by the beauty and the cleanness of the town. Every morning the owners of the stores wash the pavement in front of her/his business with soap (!) They beautify their exteriors with flowers. People are very friendly and they greet you on the streets even if they don’t know you. Gorgeous views of 2 volcanoes of Cotacachi and Imbabura and the stable climate, like May time all year round. Even at the rainy season we have just occasional showers in the afternoon and over the night. Hardly ever until the afternoon.

2. What do some expats complain about in Cotacachi?  Or why some folks decide not to stay in the area?  

-       Some foods are not available that you’ve used to – but use your creative juices and find the alternatives, lots of them! Probably, not too many things to do, as they might think. However, we have lots of activities here now; new businesses are popping up and many volunteer activities as well. But it’s everybody’s choice if they just want to stroll from one restaurant to another and gossip on everything, or to get pro-active in many new opportunities that we have to offer now. Many business opportunities are still not here. You chose this country to live in. Get creative and go for your dream! Turn your hobby into a new venture and create the lifestyle that you desire!

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3. What are current market prices like in the different areas of the town and for different types of property and the per meter price of vacant land in the area? 

-       Depends on the area. Closer to the center, the higher the price, of course. The typical Ecuadorean house, not the new one, can be around $250-300 per m2, while the new construction in the gated community can run up to $750 per m2. You pay for what you get – quality of construction and finishing materials, security of the gated community, etc.

The land is the same – the closer to the center – the higher the price. $40-50 per m2 closer to the center and smaller lots, and can be $15-17 per m2 just outside the town for the bigger acreage. Again, it all depends on the location, neighborhood, views, size, and many other aspects to consider.
4. How has the market performed over the last year?  over the last 3 yrs?  over the last 5 yrs? 

-       It’s steady growth of about 15% a year, the more people get to learn about Ecuador, the more they come here. The property prices have tripled here in the last 3-5 years. They will be still growing, but there’s still a great chance to get them cheaper than in the US or Canada. Also, please consider that you don’t have to pay cooling or heating humongous prices, property taxes for most of the properties are under $100 a year (!). Also, what you pay for food, services and some other things are incomparably cheaper that in the US and Canada. You have to weigh all this on your scale and don’t just look at the property prices, but rather the whole picture of your monthly spending here. You know it yourself that you can live here comfortably under $1,000 a month, even renting a modest property, or under $500 if you own it.

5. Do you see any notable tendencies in the local real estate market?  

-       I sure do. More people are looking now into income producing properties, businesses to support them in case there will be some political changes, affecting their lifestyles. They are looking mostly for B&B’s, restaurants, farms and agricultural land. However, there are still quite a few folks who’ve built their nest-egg, sold their property back at home and want a nice comfortable home to live here peacefully.

6. Where in the city is best for an expat to invest and where are some areas to avoid?

-       To avoid is definitely the areas out of the city, where the Indigenous communities are occupying. If you decide to live in one of those communities, you should be really adaptable to their lifestyle and culture. Otherwise, the whole city of Cotacachi is not so big, let me know your desires and I’ll do my best to assist you in finding the best place for you!

7. For someone looking to invest in a rental property, what would you advise them and what type if property should they buy and where to keep it rented?

-       Most of the folks are looking to rent in the center of Cotacachi, a few minutes walk to the center. It’s easier to rent it out. Inexpensive, maybe Ecuadorean style home with all the basic furniture. Many renters want it for a short period of time, up to a month or a bit more, so that accommodate them, as it’s cheaper then hotel and gives them more privacy.

8.  What are the prices of nearby farm land and what types of crops are most common in the region?

-       The most common crops here are corn and beans, avocado trees are abundant as well, lemons and oranges grow well here, tree tomatoes (it’s a local fruit), potatoes, tomatoes, cucumbers, lettuce, cabbage – so many things, this soil is so rich, I think that whatever you stick in it, will start popping up J

Prices can be very different, depending on the location and the size of the land. $1-10 per m2.

9.  What other opportunities do you see for investors in your area?  In other words, what would you do with $100-200k in your area right now?

-       I’d buy some good rental property that will bring some good ROI. Also, land for development or a good inexpensive land for agriculture. No matter what the future holds for us, people will always need the place to live and the food to eat.

10.  For renters, what are the average rental prices looking like?  What are the normal rental terms?  

-       Depends on where and what you rent. Gated communities can be $600-1,000 a month, all furnished and really nice. But you can find a small local Ecuadoreans apartments for $100 unfurnished, or a bit more furnished. All depends on your choice of lifestyle and budget. My friend rents now a 1 bedroom furnished apartment with a good size kitchen, full bathroom for $200 a month. Please, don’t ask me for rentals, I usually don’t do them.

11. What’s one thing most people don’t know about Cotacachi?

Gee, Dom! That’s a big one! Please don’t limit me on that one! Let me list some of them, at least:

-       You’ll pay for anywhere going in taxi in Cotacachi just $1, don’t even ask the driver ‘how much’, it’s just a buck, wherever you go. Can be $1.25 or even $1.50 if this is 5-10 minutes to the properties that are a bit out of town, Like Yana Pamba, El Batan, Jahua Pacha.

-       You can have a really nice lunch in a local restaurant, if you ask for ‘almuerza’, not going for ‘a la carte’, which is from the menu. Just from $1.75 in many little  local places, at the food court/bus terminal as well, to a fancy ‘La Tourista’ on Bolivar street for $3.50 – awesome! Just don’t forget the magic word ‘almuerza’, write it down now, or they will bring you ‘Menu del Dia’ and will charge you twice for a little bitty added to it.

-       Do you know that you can drink the water from the tap? Yes, it’s safe! It comes from the Cotacachi volcano and goes through the purifying facility here in Cota, and straight to our homes.

Thank you, Dom for interviewing me, hope that will help some nice folks to get some better ideas about living here.

Welcome to Ecuador! And, please check my website for the best properties in Imbabura area: http://chantal-realty-ecuador.com

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What Pablo Escobar taught me about life in Latin America

Many people don’t know this about me.

But my first ‘living’ experience in Latin America was when I lived almost a year in Medellin, Colombia.

I was young, 23 years old in fact.

And I have to admit I was mainly focused on going out, partying and chasing women.

But in the breaks from that, I picked up an internship with the Medellin Chamber of Commerce, export division.

While there, as an advisor to Colombian export businesses, I couldn’t help but notice one thing.

There was MAJOR opportunity in Latin America for a ‘gringo’ like me.

You see, day after day I met folks with great products and great ideas, but they needed help penetrating the North American market.

They were clueless.

Heck, they needed a ‘link’.  Someone that knew the culture and knew a bit about marketing to Americans.

No where can I illustrate better this fact than from a 4 minute movie clip from one of my favorite movies, Blow, when the main character (a gringo) meets Pablo Escobar, and goes into business with him.  Watch it here. 

No, I never met Escobar personally, but I did meet quite a few people who were fatherless because of him.  Not good.

And of course, I don’t suggest getting into illegal businesses like the main character did, why when theres plenty of legal ways to make money?  But the lesson is the same.

Which brings me to my point for today.

I’m actually a pretty average guy, average intelligence, was an average athlete, 5’6, soft-spoken, usually not a leader, chances are you’ll have trouble hearing me even when you are 3 feet away… in the USA I’d probably be someones ‘office b*tch’ aka ‘employee’.

But I can attribute any successes I’ve had in Latin America to 3 superpowers.

By superpowers I mean things that set you apart from the pack.

1.  “Being” a gringo.  As mentioned above, many people in the business environment of Latin America will ‘listen’ to you just because you are from up north, many have a respect that is visible.   You really do have an innate sense of how other gringos think, what they want, and what makes them tick.  Knowledge that someone trying to sell something to them is certainly going to covet.

2. Speaking Spanish.  Take a few months when you first arrive and learn that sh*t.  Really, in order to get the most out of living here like the friendships and business opportunities you’ll need to learn it, without it you can’t be ‘the link’.

3. Knowing marketing, specifically Internet Marketing.  This is undoubtably where the world is going, where the world is, its how businesses get clients, cheaply, and many Latin Americans are not as schooled on this topic as North Americans.  That’s the key in literally anything you want to do down here, import, export, tourism, real estate, etc… Don’t believe me, just check out an Ecuador airlines’ website, (like Tame) even those multi-million dollar guys don’t get it.  The good news is you can learn this skill, often by self-teaching yourself online like I did.

With those three powers you can do some serious damage down here!

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Posted in Ecuador for Investors, Expat Lifestyle

Whats it really like living in Olon, Ecuador? – 1 expat response

Ahhh, Olon, Ecuador, one of my favorite beaches on the coast of Ecuador, and certainly a growing ‘expat hot spot’.

Olon is a few kilometers north of Montanita, about an hour north of Salinas (which has the nearest airport), an hour south of Puerto Lopez, and about 3 hours south of Manta.

For me, with its golden cliffs and gentle waves Olon has a special, Californian-laid-back feel, and its got one of the widest beaches in Ecuador making it one of the nicest walking beaches in Ecuador.  Its also unusually green, whereas once you pass the point at the south end of Olon which separates Montanita from Olon, from there south the coast is actually quite dry, brown and arid while from Olon north to Manta the coast is actually quite green and lush.  I know, its strange.

Above all else its great for folks looking for a quiet small town to sleep, yet still near the social scene of rowdy Montanita.

Today lets chat with an expat about what life is really like from the ground…

Enter Mrs. Defrain.  

Why did you choose Olon?

My husband and I had been coming to Salinas and Montanita for about 2 years, and we decided to see if there was anything for rent in the area.  We found a very small unfurnished house in the middle of Olon for rent and we got a very good deal because we signed a year lease.  (We had to supply our own appliances.)

Montanita is a lot of fun, but it is loud.  Very very loud.  My college-aged son likes to visit Montanita when he is here in Ecuador.  Montanita is getting very built up and the available rentals seem to cater to short term visitors.  The town center has had problems with sewage smell, and they are working on that.  It’s a great place to visit but we did not want to live there.

We had never been “beach people” before.  My husband has learned to surf, or as he says it, “push a large board around in the water for a couple of hours every day.”

The beach in Olon goes for miles, from the point on the north end of Montanita, all the way up to La Entrada.  We have a lot of beach at low tide, and even have quite a bit of beach at high tide.  Some beaches in Ecuador disappear at high tide, but not in Olon.

How long have you lived there?

My husband and I have lived in Ecuador since June 2011, and have been in Olon for 9 months.  We still have an apartment in Cuenca, and stay there every once in a while.  We are building a small house here and plan to relocate.

There are some ex-pats who have been in the Olon area for several years, some like us just for a few months.

Tell us a little about yourself? 

My husband is retired.  My career was IT Project Management, but I have had 4 books published and now I am focusing on writing.  We chose to come to Ecuador from the US West for another adventure.  We looked in Thailand, Mexico and Peru.  Ecuador seemed to have the best balance of cost, environment, infrastructure, and proximity to the US.

What are the biggest positives and negatives to living in Olon in your opinion?

Two reasons that we enjoy Olon are the beach and the community.  The Malecon has quite a few thatched roof restaurants to choose from, all with an ocean view.  Olon is very clean and graffiti-free for the most part.

The community here is wonderful.  This includes the ex-pat community as well as the locals.  When you live here, you have to be part of the community.  The area is too small to hide out.  For example, when there is a local wedding or Quinceañera, the street in front of the family’s house is blocked off.  A festival tent is put up, and speakers the size of small trucks are put on a stage.  The whole town gets to experience the event, whether you are invited or not.

Olon, it seems to us, is a town in which not much is hidden away.  People are out on the streets day and night, visiting, sometimes drinking, and often dancing.  There are several events a year in which local dance groups compete against each other.  Because we live near the square, we have seen and heard them practicing the moves for months.

One midnight I heard something besides techno-pop music in the square; it was more traditional Andean music.  I woke up my husband and we watched a dance troop of about 20 people in Andean costumes dancing in their little black slippers, with wide straw hats in their hands.  Then the men bowed, put their hats on their heads, lifted up the ladies and spun them around in unison, and then moved away.  The traditional dancing went on, without conversation, for 4 dances.  Then they turned the music off and walked silently away.  My husband and I looked at each other in amazement.  Another Brigadoon moment in Ecuador!  We have never seen the dance troop since.

We wake up to the smell of bakeries close by, and go to sleep to the smell of grilled meat at Leila’s.  Sometimes the local wild donkeys add their “perfume” to the air.

One thing that is a challenge for us are the stray dogs, or the dogs with neglectful owners.  As dog lovers, we find it difficult to see the condition of these dogs.  One friend is in the process of working with a vet to build a dog shelter, in which injured strays can be taken for treatment.  She is also starting a spay/neuter center.

Approx how many resident expats live in the area?  Are there any weekly meet ups new expats should know about? 

There are Saturday afternoon meet ups in Olon and in Montanita during the high season.  Wednesday nights alternate between Olon and Montanita.  There are many formal and informal get-togethers.  Sometimes the magic just happens spontaneously at a local tienda on the highway.

I am not sure how many ex-pats live in the area, but over the year I am guessing around 200.

The ex-pat community is very welcoming and just plain nice.  There are inconveniences to living here, and we try to help each other.  For example, it can be difficult to get certain greens and veggies here.  Many people have gardens and share seeds and produce.

There are quite a few ex-pats who have built houses here, and they are extremely helpful in providing advice, contacts, and sources.  My husband and I are grateful for our friends and neighbors here every day.

Locals who live in Olon year round are always very nice, too.

What is there to do in and around Olon?

We have a book group that meets monthly, and ex-pat meet ups on Wednesdays and Saturdays.  Bird watching is superb.  Beach activities such as surfing, boogie boarding, swimming, and just walking the miles of beach are just outside your door.  You can go outside every day.  What’s a little drizzle now and then?

We usually see friends whenever we walk outside our door.  Visiting is high on our list of fun activities.

Because we live at the beach all year, we are very happy when it’s Monday.  From Monday to Friday morning, we usually have the beach to ourselves, even in high season.

We are never bored, even sometimes when we want to be!

Where do you do your shopping? 

We do the majority of our grocery shopping in La Libertad.  We put ice in the coolers and load up any friends who want to go along.  It is usually 4 to 5 hours for round trip for travel and shopping.  We go about every 10 days.

It’s important to keep a good shopping list, as there is no running back to the store easily.

Some fruits and veggies, as well as eggs, are available locally.

Do you go to Montanita often?  What for? 

We go to Montanita to go to the bank, for surf board repair, and for our monthly Book Group.

What are rental prices like in the Olon area? 

Rental availability depends on time of year.  A rental that is $300 in the off season may be $800 Jan – March.  Longer term rentals are mostly found via social contacts, and are rarely advertised.  It may take a while to find what you are looking for if you are very restricted in what you can tolerate, price range, or location.

If someone wanted to rent a house, my suggestions are:  find any place you can afford for a few months in the area, meet your neighbors and talk to people.  You will probably eventually find what you want.

Understand that there are times in the center of Olon in which sleep is impossible due to celebrations in the square.  Friends that live over a mile away can hear the music.  Sometimes our dog hides under the bed and whimpers, it is so loud.  This is part of the coastal culture and there is no reason to fuss about it.  It is all part of the package:  if you are part of the neighborhood, we are all in this together.

What are average purchase prices in the area?  Know of the prices of any actual transactions? 

We searched for a lot to build upon in October/November 2013.  We bought a small lot about a half mile back from the beach.  Beach front property is available, but it is at least $100 per square meter.  Lots away from the beach can vary, but in Olon at the time we were looking were averaging $40-$50/square meter.  Land up in the hills may be as low as $20-30 per square meter.  Those lots may have additional costs for bringing in electricity and water.

Prices are going up and up.

What businesses does Olon lack and need? 

It would be very handy if Olon had an ATM.  We have to go to Montanita for cash.  There is currently one ATM in Montanita which can give more than $100, and there is a Banco Bolivariano bank with a teller and an ATM (usually $100 limit).  There is often a long line to use either ATM or to get to the teller.

The other business that would be handy is a larger grocery store.  There are small vegetable stands and a mini-Tia which has many staples.  It would be nice to have more variety close by.

Where in Olon would you recommend to live, which sectors?  And conversely are there any areas of Olon or nearby to avoid? 

Olon is very small, as are the towns north of here.  There is a choice between being right in town in Olon, on the beach, or up in the surrounding hills.  It all depends on what you want.

The main thing to understand, in my opinion, is that some of the remote areas just out of town can present access challenges during the rainy season.

Dos Mangas, to the east out of Manglaralto, has very nice lots for sale if you have a car and would like to be more up in the hills.  City water is available quite far up the road.  It is very beautiful, with jungle-like greenery yet only 20 minutes from the beach.

Where do you go for your healthcare needs? 

As far as healthcare goes, there is a doctor on the main square in Olon, and he is open several days a week.  We see him if we have a bad cold or tummy troubles.  Our regular doctor is in Cuenca, where we still have an apartment, so we see him for our regular checkups.  There is a small emergency clinic in Manglaralto, about 20 minutes from Olon.

People who are thinking of relocating to this area should be healthy and mobile.  If you have a chronic health condition in which you need to regular be treated, it is likely that you will need to go to the Salinas area (1.5 hours away) or Guayaquil (3 hours away) if you need to see a specialist.  It is a lot different from Cuenca, where several large, modern hospitals are a short taxi ride away.

People should realize that part of the charm of the area is that it is not yet as dense as Salinas, but that also means that the conveniences and amenities are fewer.  This includes serious health care.

Where do you fly into or out of?

Guayaquil is the closest major airport.  Olon is about a 3 hour bus ride or car drive from the GYE airport.  The roads are new and very good, with a new “cutoff” near San Vicente just opened in the last year.  This saves a lot of miles.  NOTE FROM DOM: JUST A FEW WEEKS AGO FLIGHTS STARTED GOING TWICE A WEEK FROM QUITO TO SALINAS.

Do you have a car?  Do you feel like you need one living in Olon?

People ask us whether it is necessary to have a car to live on the coast in Olon and the nearby communities.  While my husband and I have a car, many of the ex-pats in the area do not.  The ex—pat community is wonderful here, and we all pitch in to help each other.  For example, you cannot take a dog on the CLP bus, so we often car pool to take our dogs to the specialty vet in Guayaquil.

There are very good local drivers for the day if you need to pick up large items, although the saying is “If an item is smaller than a VW bug, you can put it on the bus.”

For about one dollar, you can take a taxi to Montanita.  The bus runs several times an hour during the day for 40 cents.

There is very good bus service to Guayaquil, and in fact if we are just going to Guayaquil for the day we often take the CLP bus.  The CLP is a “4 Star” bus, very clean, and the movies are PG rated.  (I have seen some horror flicks on other buses that have made me cringe.)  The CLP buses can be found at the Guayaquil Terminale Terrestre at window 83.  The cost is currently around $6.00.  It leaves Guayaquil at 5:00, 6:00, 9:00, 13:00, 15:00 and 16:30.  The CLP leaves from their bus station in Olon and goes to Guayaquil at 4:30, 5:30, 9:45, 12:45, 14:45 and 16:45.

Between Olon and Puerto Lopez, or Olon and Salinas, there are currently no high speed buses, but the local buses run all day.

Over the course of the year, what’s the weather in Olon really like? 

We have been told that, weather-wise, this has been a “weird” year.  Normally in January and February, it is hot during the day and heavy rains at night.  We have seen very little rain this Jan and Feb.  Our experience is cool, dreary and rainy June to November, with a few days here and then of brilliant sunshine.  November to May is mostly sunny and very warm, or hot.

We do not have aircon.  We use fans and stay almost comfortable on very hot days.  Some of the ex-pats have aircon in the bedrooms.

My husband and I actually like the off season very much:  the beach is wide open, it is nice and cool, and the town is pretty quiet.  It is a good time to get to know your neighbors.  There were times, though, that we went to Cuenca just for a bit more sunshine.

Any new infrastructure developments in the area of note? 

More streets in Olon have been paved in the last year.  Other towns nearby, including Curia and Las Nunez, have had street paving projects.  Our water is “city” water, and we do not have a cistern.  There are times when the water is turned off, either for maintenance or from usage.  In Olon, as in most of the small towns here, sewage is handled via individual septic tanks.

How do you get internet in your home?  How do most access the Internet, is it tough to get? 

My husband is retired, but I have clients in the US.  I need to have reasonable internet.  We have 2 internet connections at the house:  CNT ($30/month) and Interdatos ($35/month).  We have both so that we generally have one up if the other is down.  Also, I can be working while my husband is talking to family on Skype.

Like a lot in this area, either you can go to Santa Elena to fill out paperwork, or you can have someone help you.  In our case, friends helped us get both internets set up.

How can we get in touch with you if we want to know more? 

Please email Michele at mythprojectecuador@gmail.com.  I can provide info on our book group (second Monday of every month), on the new dog shelter, and any other help I can give.  We are all in this together.  Thanks for listening.

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Posted in Ecuador for Investors, Ecuador Travel Guides, Expat Lifestyle

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