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Real-life earthquake experiences from around Ecuador

 Most say the quake epicenter was near the Ecuador-Colombia border.

They’re wrong.

It actually was a bit further south on the coast as the greater-Esmeraldas area actually didn’t sustain much damage.

Interesting how one town on the coast was barely affected near  a town that just got pounded.

The area most effected was the north central part of the coast from Pedernales-Canoa-Bahia-PortoViejo-Manta which got slammed.

Yet interestingly Crucita, also in the area, didn’t sustain much damage.

Just south of Manta towns like Puerto Cayo and Olon shook but didn’t sustain much damage if at all.

The south coast (Salinas-Santa Elena area) escaped largely unscathed.

The highlands and Amazon regions also sustained little to no damage.

Here are actual experiences from around Ecuador:

Here in Quito, Ecuador, as I mentioned before, I felt the quake, but didn’t think much of it at the time, actually I had felt worse in this area.  The wine bottle danced on the table, but didn’t fall,the lights flickered, then everything was back to normal, no damage here.  It wasn’t until people started texting me with the news that I realized it was more serious on the coast.

A friend in Esmeraldas told me her area was fine and that actually the city of Esmeraldas made it largely unscathed.

A friend in Guayaquil said, “I was at home and it really started to shake, I could hear things falling to the floor from other houses, then the power went out for a half hour.  My neighborhood was in tact, a few blocks away one house lost a wall, that;s about it.”

A friend in Cuenca, David from Cuenca Car Share shared that he was sitting at a stop light and he thought the road was vibrating from some construction work.  No visible damage to buildings.

Lillian Asihene in Quito Centro said, “I am in Quito Centro Historico and live on a hill.  I was sitting at my computer and suddenly felt my house slightly shaking and estimated the time to be about thirty seconds.  I sat just wondering when the shaking would stop.  Since I am very familiar with earthquakes after living in Los Angeles, California, for 35 years, I knew exactly what I was experiencing and was not afraid, but did hope that the shaking would stop soon.  In the mean time, I e-mailed my family and friends in the States to let them know that an earthquake had occurred and that I was OK.  I was definitely relieved when the shaking stopped.  My area was spared the damages that occurred on the coast.”

Donald Logan in Olon on the southern coast said… “Nancy and I were in Olon, on the coast.  We were sitting for dinner at Eddies Taqueria, and Eddie had gone out to get shrimp.  When the large chandelier, chairs, and drink cooler began to move around violently, we quickly went to the doorway for an instant then bolted into the open area in front of the restaurant.  We watched the trees, power poles, and their lines swinging wildly as the quake went on.

We had alerted the rest of Eddies family at the same time, and neighbors and friends huddled in the clear for some time.  Power was out in many sectors of the town till midnight, and we watched as many of the residents pushed to higher ground anticipating the possible tsunami.”

A friend in Ayampe on southern coast said… “We were on the beach and felt the sand jump, then we all run for the hills thinking there would be a tsunami, but that was it, no visible damage in area.”

A friend in Puerto Cayo, a town 1 hour south of Manta, said, “all good here, power and internet went out but I’m not seeing any extensive visible damage to buildings.”

Russ in Manta said, “We live live in Manta on the forth floor,  the building.   It is our apartment building and now it is not livable.”

Roger Lewis in Vilcabamba said, “Had a glass or two of wine, taxi home and standing in the kitchen I thought to myself bloody hell that was damn good wine !!!”

Ed OConnor in Cuenca said, “Here in Cuenca, we are on the second floor of our apartment building. We could feel the building shake and things were vibrating. The TV was shaking and I got up to hold it to make sure it didn’t fall over. When I got up I had the sensation that I was drunk and the room was moving. ”

A friend in Cotacachi said, “I was sitting on the couch when for a moment I experienced what was like an underground train going under me and then I thought, “no, I’m in Cotacachi, not London.”  I was in an adobe one floor house and everything was just sort of moving and the ceiling lights were swinging.  We didn’t lose power here.  I realized it was an earthquake and I’d never experienced one.  I went out onto the porch and saw across the lawns other porch lights swinging and everything was just moving and seemed kind of blurry.”

Patrick Holland in Salinas said, “Minutes before, I had just taken a new medication. So, I felt dizzy. The building did sway a little. It only lasted for a minute, here in Salinas.

Then, I went to the balcony to look at pools and ocean. The pool was in “jacuzzi mode”.
I have since heard that some people have traveled Salinas from end to end, but not too many concerns here.”

Mark in Canoa said, “I’m fine Canoa is a disaster with many buildings completely destroyed.”

Scott in Galapagos at the time, ” Didn’t even feel anything.”

Ecuadorian friends in Chone said, “I was watching TV, and the wall to my room fell over, but the other way from where I was sitting, so all good, kept watching the show a few seconds more until power went out for good.  Not too bad here but roads are bad and the hospital got hit bad too, been without power, water for several days.”

The most interesting take I’ve seen online since the shake was from Court at Freedom Bike Rental who were in Canoa at the time.  Check it out here. 

Hasta pronto,

Domenick Buonamici
Quito Airport Suites– a B&B minutes from the new Quito
Guayaquil Airport Suites Mall del Sol- Luxury suites minutes from the airport in Guayaquil across the road from the Mall del Sol.


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Posted in Ecuador for Investors, Investor News/Analysis

Updates on road closings, openings in Ecuador due to earthquake

“Dude, why is that wine bottle dancing on the table.” A Canadian friend said as we were hanging out in the lobby of my hotel near the Quito airport.  

The quake was just powerful enough to be felt but that’s about it in Quito.  The bottle danced but didn’t fall over.  

The lights flickered, then came back on.  

And that was it.  

A little tremor, I thought, and back to business as usual glad I wasn’t going to have to work without electricity (it really sucks when you have a hotel, and its so rare the power goes out here I don’t even have a generator).
 
I had felt earthquakes before, in southern California and other small ones since i had moved to Quito 3 years ago, but this one, while mild and no biggie so I thought, felt different.  

It lasted a little longer than normal (like 20 seconds) and felt kind of “wavy” like we were riding gentle ocean waves.  The other quakes i have felt were more 1-3 second jolts making the windows snap (but not crack).

Anyway, my area (Quito) didn’t have any visible effects, but obviously the central Ecuador coast has been hit hard as I’m sure you’ve seen in the news.  

Here’s an update on the road situation nationwide:

Over the last few days the highways connecting the highlands to the coast from Aloag-Santo Domingo and Latacunga-Mana have been closed due to landslides.  As of today, APR 19 they are both open, but before traveling them inquire to be sure.  

The road Chillanes-Bucay is still closed.  

The road connecting El Carmen – Flavio Alfaro is now partially open (one lane only).  

The outlet road connecting El Matal to Jama is closed.

Other roads closed within the past 24 hrs that now report to be at least partially open for transit:

Highways connecting San Vicente-Jama-Pedernales, Puerto Cayo-Jipijapa, PortoViejo-Crucita.

The roads connecting Guayaquil to Cuenca were unaffected, assume if not listed here the roads nationwide are in fact OPEN. 

Overall: I’d say trying to navigate the central coastal region from Pedernales-Bahia-Chone-Portoviejo for now is best avoided if possible, at best long traffic wait times are probable and at worst the roads may be re-closed deemed un-passable on a moments notice. 

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Posted in Ecuador for Investors, Investor News/Analysis

3 Things NOT To Bring To Ecuador For Resale

2 checked bags (with items that wouldn’t cause problems entering Ecuador)= $1000 profit.

I’m confident you can do that, because I just did. On my first try.

At least I paid for my plane ticket.

This week I finished selling the last of the products I brought to Ecuador for resale in November.

I made money on everything, although some items fetched less than I was hoping.

And some items took A LOT longer than I expected to sell.  But within 2 months of posting I did in fact sell everything.

Of course, I learned a lot, as my clients were 100% Ecuadorians.

Here are 3 things (or groups of things) I learned the hard way to not bring back for resale on my next go:  

1. GPS equipment.  Through my online research the margins looked really good and the machines themselves were small so I thought this was a no-brainer.  I was wrong, very difficult to sell GPS stuff in Ecuador to Ecuadorians.  There just isnt much demand for it.  I did sell what I brought but in the end on a device that costed me $89 I made like only $10.  I expected much more and I had it posted at $170 for a while but it didn’t move.

2.  Small items with high margins and low dollar amounts.  For instance, I brought back a package of certain quality fake eye lashes I bought in the states for $1 and thought to sell here at the market price around $10.  The fact is, selling online, sure the margin looks good, what is that?  1000% profit.  Low investment, low volume and low weight in bag.  That’s what i thought.  Problem was when selling online everyone expects you to send it to them or meet them and do the transaction.  For a few bucks its just not worth the time, plus, I ended up selling at $4 making $3.  I would not bring these types of items again.

3.  Unknown brands in Ecuador.  Lately, I’ve been a Lenovo computer guy.  I love ’em.  Although they are quite popular in the States, I knew they weren’t well known in Ecuador.  Anyway I brought one back and it was VERY hard to sell for a profit!  i did eventually sell it but for little profit.  I would not bring back anything in the future with an unknown brand locally.  In Ecuador, in my opinion the best known brands for lap tops are Apple, HP, Toshiba and then Dell.

Now its your turn!

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Posted in Ecuador for Investors, Investor News/Analysis

Key To Early Retirement In Ecuador: 1st Attempt Passive Income

My mom worked for 30 years in the USA as a school teacher, and retired with a few hundred thousand in savings, 2 properties, 1 mortgage, and a $3,000/month pension.

Obviously, I’m not going that route.

But I feel the key to an early retirement is a passive income of at least $3000 a month without it depending on the highly volatile world markets (stocks, bonds, metals).

So this year I’m focused on just that, creating an income of at least $3000 a month passive income (meaning you get it and don’t have to do much of anything)… here in Ecuador.

And I’ll keep you updated on all the wins and losses.

Most entrepreneurs and independently employed lean on rental properties for that income.  I don’t think that is the way to go here in Ecuador because rents are low and tenant laws problematic.

So my focus is going to be primarily on agriculture and Ecuador web-based businesses.

This week I launched my first try at it.  A website for folks who want to rent cars in Quito, Ecuador.

The premise: Rent a cars at the airport are PRICEY, yet the little domestic rent a car places in the city are much cheaper.  So I made a deal with one in the city to deliver and retrieve their cars from the airport here in Quito and I’d make 12% commission on sales I made.  Essentially the idea is to bring the city prices here to the airport  area.  For instance, in the city, the economy cars you can get for $23 a day plus 12% tax (with 60 km).  Same car is about double that in the airport.

The costs: Domain name ($15/yr) built website myself in wordpress (free), signed up for a gmail account and a live chat account (not yet implemented in site) $15/month. That’s it.

The strategy: Once deal was made and site launched I found a bilingual Ecuadorian friend of mine who wants to make extra money who answers the emails and the calls and handles the bookings. The clients deposit to my account, then I split the commissions with him.

Our clients: Mainly Ecuadorians so we don’t have an instant book now feature, most Ecuadorians prefer to email, call, call again and then deposit in bank account to confirm booking.

The sales: In our first week we’ve sold for commissions of $3.60, $22, $20, $32.  Total $77.60.  Not bad for the first week, we’ll see from here how it goes.

One thing I’ve never seen many web gurus talk about are the incredible online opportunities there are in developing countries selling in the local language to locals.  There simply isn’t much decent competition so it is possible to make an impact quickly.

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Posted in Ecuador for Investors, Investor News/Analysis

The #1 Way Foreigners Overspend When Building A Home In Ecuador

A lot of foreigners will agree to one price per square meter on a new home build.

Start to finish. Turnkey.

And they overpay, usually in the six figures.

Instead…

Hire just for the “grey job” first.

In the grey job is usually included the foundation, the columns, roof and walls. Of course all left in grey, and of course considering the walls are cement block (common in Ecuador) and the roof is the typical walk-able cement “losa”.

When finished then tell the builders “chao”. And proceed to find specialists for the other jobs regarding the house job by job.

For instance, for a 3 bedroom, 2 bath house I’ve seen you can get the grey job done hiring this way for under $10k (just the labor fee, materials not included).

And be sure to pay for the job, not weekly. They will work lightning fast that way.

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Posted in Ecuador for Investors, Investor News/Analysis

Expat Fire Sales: Where To Buy Your Furniture At The Lowest Prices In Ecuador

“Wow, nice refrigerator,” I told my friend while visiting him on the beach.

“And that’s a new table too.” I added.

“Yea, there was this expat couple that moved back to Alaska. Sold everything quick, got everything for less than half price, they had just furnished the place with all new things months ago.” My friend replied.

I see this a lot.

Folks move here, invest heavily in furniture and even real estate, and within weeks or a few months they’re packing up and moving out.

And selling their stuff at a deep discount.

You know, Ecuador, and Latin America in general, isn’t for everybody.

But it’s an expat fire sale, and its a great way for the rest of us to buy our furniture at often less than half of what the items cost new.

So take my advice and don’t invest too much furniture upon arrival and just wait it out and catch a fire sale or two and fill out your house gradually, you’ll be glad you did!

So how do you hear about the expat fire sales?

Just keep your ear to the ground, a wife always complaining? Maybe a husband? They could be gone soon. These are the best cause you are the first one to hear about it.

Other ways to hear about these are by signing up for the Ecuador expat nationwide newsletter gringopost.com and by checking your local regional paper.

For instance, in Quito check the EL COMERCIO classifieds on a Sunday in the OPORTUNIDADES (green) section for MUEBLES (furniture), LINEA BLANCA (appliances). A lot of people both Ecuadorians and expats moving abroad post that they are selling their household goods discounted here.

Must sell quick!

For kitchen equipment try the NEGOCIOS section where many a restaurant that has gone under is selling off their kitchen equipment. Need a nice industrial stove, freezer or whatever? This is the place to look. Of course this last option would require a bit of Spanish.

There you have it, now you know how to buy furniture smart in Ecuador.

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Posted in Ecuador for Investors, Investor News/Analysis

pH setback with land in Ecuador

Posted on 22 January 2016 .

"I've never seen a pH like this." The part-time Stevia specialist said to me looking over the results of my soil analysis.  

The pH is over 8.  That's very alkaline.  Too high for a plant like Stevia.  The plant would grow but not produce as much as it should, he continued.  

The ideal, and what most soil has in Ecuador is around 6.8-7 which is a neutral soil that plants can thrive in.  

Now, there is a way to correct the pH in the lot, by injecting about a ton of sulfur, which would cost me around $500.  But there's no guarantee that would fully correct the problem.

So for now, another option I think I'll go with is another crop that is a bit more resistant to the pH.  

But I jumped the gun, live and learn I guess, and have already put a deposit down on the Stevia plants.  

I'm still VERY interested in Stevia, but now I have a bunch of plants due out the nursery and no where t put them.  

40,000 of them to be exact, at 30 cents each.  You can fit them all comfortably on about 8,000 meters of land.

In Ecuador they grow best under 2400 meters in altitude and if there is a daily or semi-daily water source.  

And now I need to find a new home for them, aka, another lot to plant them or someone who would like to buy them?  I paid 30 cents each,  could offer a nice discount depending on how many you buy, just trying to recoup my money here.  

So, learn from my mistake, wait for the soil analysis to come back before making decisions on which land to buy (or lease) and which crops to grow!  
 

Any takers on the perfectly healthy, ready to produce and live 6 years Stevia plants?  

They produce every three months and I already have a buyer in Quito lined up.  Please refer to this link for the specific production expectancies, http://ecuadorrealestate.org/stevia-ecuador/  .  

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Posted in Ecuador for Investors, Investor News/Analysis

How much do farms cost in Ecuador?

Posted on 19 January 2016 .

Good question.  

Sometimes in Ecuador it seems like the people actually selling their farm have no idea how much to ask as prices are all across the board.  Asking prices can be particularly high once a crop is already producing.  

But you can find a lot of farms for sale for under $1000 per hectare (2.2 acres).  

But when you inquire further or actually visit the farm you realize why they are so cheap.  

No road access.

Or very poor access in that you literally have to travel for a while on rough dirt road that will often get washed out during the rainy season.  Even still, some farms will force you to park and walk because they can not be reached by car.  

On the flip side, farms near a major highway (say within 15 minutes of driving) yet down an unpaved side road reachable by car usually go around $3-6000 per hectare.  

While farms with direct highway access usually ask around $5-8000 per hectare.

Next up, water.  

Does the farm have a river or two on or bordering the premise?  If it does, it´s worth something, if not forget about it as "well water" might suffice for building a residence on a property but not for actually growing crops.

Following that, overall remoteness, electricity, cell phone coverage and more play into it…  Like, how close is the farm to the nearest town where you can actually find workers and take your crops to market?  Important, indeed.  

For instance, this week, I was in the Santo Domingo area, about half way in between Quito and the coast in the coastal plain lowland region of Ecuador, and through a friend I found one interesting buy.  

A 16 hectare farm with direct highway access and several small rivers in a green, rainy area, electricity and minutes from a large town asking $60,000.  That´s just over $3500 per hectare.  

The owners inherited the property and have no interest in it and just want to liquidate.

In my experience, this is a good deal, having direct highway access gives you a lot of options like possibly building a restaurant (paradero) or guesthouse down the line.  

The area has a sub-tropical, mild, yet humid climate due to the median altitude of 950 meters (3100 feet).  

Many both cold and warm weather crops can grow here like sugar cane, citrus fruits, Cocoa, Stevia or more local varieties with local demand like Naranjilla, Palmito and Borojo. Also, coffee is a possibility.  

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Posted in Ecuador for Investors, Investor News/Analysis

Which Ecuador residency visa option is best for you?

Posted on 17 January 2016 .

My brother is married to a Thai woman.  

Even still, when they go to live over there for part of the year, he still has to do "border runs" every month or so.  Even for him, residency is complicated!

Other countries, like the Philippines, or Colombia don´t force you to leave the country but every month or so you have to keep paying and paying to renew your tourist visa.  

Ecuador is not like that.  

Ecuador is one of THE EASIEST countries in the world to get residency, no doubt about it.  And after three years of legal residency you could apply and get a South American second passport which opens up the whole continent to you making it much easier for you to live in Colombia, Peru, Brazil or any of the other countries down here.  
 

But which visa is the LEAST hassle for you?  
Got a pension or disability income of at least $800 a month?  Or $900 if you want to bring a spouse?  Go for the 9-1 Rentista (Pensioners) visa.  This is the most hassle-free visa there is if you qualify.

Don´t have a pension or steady income for life you can prove?  

You could go for the 9-II Investors visa by investing at least $25,000 USD in a real property or a CD in a bank in Ecuador.  A mere pittance compared to the $500,000 USD the USA requires as investment to gain residency there.  Even other latin countries like Panama and Costa Rica require a much larger investment.  
 
But what if you don´t have or don´t want to put $25,000 down?

No problem, go for the visa I´m on, and the one that opens Ecuador wide open to young people with no pensions… the 9-V Profesional visa.  All you need is a four year degree from a university on their long list of accredited universities.  Then you need to get that degree vaidated by the Ecuadoran Institute of Higher Education, the SENESCYT, and apply, that´s it, you´re in!  And if your university is not on the list, no problem, you can still apply, but you just have to do an extra step to get your university put on the list.  No other country I know of has this visa option for literally ANY career type!  
 

What if you have no degree?  
 
I didn´t know this until I talked to an expert on the subject while preparing my Guide to Ecuador Residency due to be released in about a week, but you could also apply for the 9-III Investor in a personal business visa.  For this visa, you have to show investment in a business located in Ecuador in the "exporting, or industry or agriculture fields".  

​You place a value on all the inventory in the business equalling at least $30,000 USD.  Like my "$3000" lap top I´m writing on now.  Oh yea, and my "$20,000" car. This could include your home office.  A bit more complicated, sure, but it´s covered in my guide and the experts recommended therein could help you see it through.  Tough to do this one on your own but It´s an option if you don´t qualify for any of the other above visas.

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Posted in Ecuador for Investors, Investor News/Analysis

How 1 Expat Got Nailed For $1800 Bringing Their Pet To Ecuador

Posted on 08 January 2016 .

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"$1800?" I gasped.  

"Yea, $1800," the guest at my hotel in Quito near the airport continued a few days ago in October of 2015, explaining how he just spent $1800 just in taxes and fees paid to the government to bring his dog to Ecuador.  

This is excluding what he paid to ship the dog here.  

And excluding what he paid a translator/facilitator to help him with the process.  

So, actually, he spent a lot more.  

What was the problem and more specifically, how can you avoid spending this kind of money?

He wrongly brought the dog down over 20 days after he had arrived to Ecuador.  

Big mistake!  

In Ecuador, they consider that an import, with steep taxes incurred to boot.  

While if you bring the pet down with you it's considered a personal item of the traveler.  And if its small enough to carry on, it walks right out with you, no extra fees or taxes, provided you have all the necessary paperwork from the vet and Ecuador consulate.  

Or you could send it as BAGGAGE which drops it right out on the carosel.  Or if its too big you can send it as cargo meaning you'd have to pick it up the next day paying a few nominal fees and showing your boarding pass in a few different offices all near the airport.  
 

What happened to this guy is United didn't let his dog board the plane when he went to fly, if this happens to you, simply don't come until you can travel with your pet to avoid these elevated taxes.  
 
I've found United to be VERY picky about letting pets board whereas American and Delta and other carriers are not so problematic.  

He didn't know.  

Now you do!

And to avoid overspending on a resident visa in Ecuador, it's actually a surprising easy and cheap process if done right…
 

Try my pre-release of the long-awaited updated for 2015 DIY Insiders Guide to Ecuador Resident Visas.  
Ideal for anyone considering Ecuador as a living destination.  Simplify an otherwise complicated process and learn how you, a foreigner to Ecuador, can become a permanent legal resident within just a few short weeks saving thousands on legal fees and the headaches along the way. 
 
With this info no costly lawyer is necessary!  You can do it yourself or with a friend that speaks Spanish.
 
Now, until midnight, OCT 31order the guide for half-price, now just $24.95, after released, it will be $49.95!  
Hasta pronto, and thanks to everyone who bought my 2015 Insiders Guide to Random Importing to Ecuador, it has now been taken offline completely so those that bought can take full advantage of the info.  
 

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Posted in Ecuador for Investors, Investor News/Analysis

Expected returns in Ecuador, and how Ecuadorians double them

A lot of people don’t know this about me… but I actually have an Ecuadorian mentor.

He’s born and raised Ecuadorian, from Guayaquil, self-made, about 50, and currently owns a hotel in Salinas, a rent a car company in Guayaquil, and a few other smaller hotels in Guayaquil.

I actually partnered with him when I part-owned a hostal in Guayaquil, my first significant investment in Ecuador. I wouldn’t have had the guts to do something like that on my own when I first got here, he showed me the biz.

Anyway, we still keep in touch, and one day we were talking and I asked him what he considered to be a good investment?

He responded, “20%…” OK I thought, that’s good.

But he wasn’t finished… “a month”.

“Wow, really? That’s how rich Ecuadorians think?” …was all that went through my head.

But after being here a while (3 years +) I can honestly say its true, for a lot of investments in Ecuador, that’s about the return you should expect.

Remember, like most places in Latin America, Ecuador should be considered a higher risk investment, and the returns should substantiate that.

So, how do Ecuadorians double their returns?

Rent.

Yea, I learned this here in Ecuador. Rent the property and put the business, or rent the business, redo it and really put it to work and you will often see 100% returns on your now much smaller investment and get your money out within 2 or 3 months!

Sometimes it makes sense, but you don’t necesarily have to own ‘the trains’!

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Posted in Ecuador for Investors, Ecuador Q&A, Investor News/Analysis

Getting electricity to your lot in Ecuador

And on goes my building project on the coast of Ecuador.

Next up, electricity, not necessarily a sure thing in Ecuador.

But in this case, the electricity was about 100 meters away from my lot, maybe a bit less, so it wasnt a huge deal hooking it up to my property.

Total cost $2450 for everything, one guy did it all, installed two posts, one transformer for max 2 houses, and also did the certification with the electric company and got the meter installed.

In a few days he was done.

If I build more houses in the near future i can trade him the transformer i got for a more powerful one and he will discount the full price of the one i have.

As for installing the electrical outlets and breakers in the home itself, normally, I now electricians in Ecuador charge $12 per point, or per outlet installed. We found one recommended local that will do it for a total of $700 the whole house.

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Posted in Ecuador for Investors, Ecuador Q&A, Investor News/Analysis

Making sense of the new Ecuador Inheritance Law

This week (June 2015) the Ecuador president is sending a new bill to the Ecuador Assembly to seriously hike the inheritance taxes the rich will have to pay.Important news for us property investors.

As it lays now, folks in Ecuador with inheritances under $66,000USD dont pay any tax.  For inheritances valued $100,000, they pay a 5% tax.  For $200,000 10%, $300,000 15% and up until the max for inheritances over $796000 you´d pay 35%.

The new law does two things… for one, it creates two separate tables, and distinguishes between indirect heirs who are not direct (spouses, children) and direct heirs.

The second thing the new proposed law will do is really stick it to the wealthy while not effecting much the lower class.  Heirs that inherit money or property valued under $35,000 will pay no tax.  And, in the same example above, heirs who inherit $100,000 will pay a 7.5% tax, $200,000 a 17.5% tax.  But at $300,000 you really start to see the difference, now you´d pay 32.5% tax compared to 15% tax from before.

At fortunes over $566,000 youd pay 47.5% tax if you are a direct heir, 52.5% tax if you re an indirect heir compared to now when you pay 25%.

For indirect heirs who inherit over $849,000 you´d have to pay a whopping 77% tax! I think this will effect the country in two ways…

1. More people will buy property directly in the names of their kids to avoid this tax.

2. High-end properties over $300,000 will sell VERY SLOWLY if they sell at all.  Prices will drop for the high-end as they´ll have to offer serious discounts while most of the Ecuador rich will look to move their ´big´ money abroad.

But I think what you really have to worry about is what´s in the silver lining here.  If this tax gets approved this could open the door to more tax hikes… particularly for the rich.

ANd it continues to create a dangerous mentality of  “its OK to take from the rich cause they probably got their money anyway from robbing and stealing from the poor”. I´ve already heard tax reforms for a new capital gains tax may be in the mix.

But, I´ve always been one Ecuador “analyst” that recommends you only put maximum 10% of your portfolio in Ecuador, with a particular focus on less expensive Ecuador property (usually under $150k) cause I think that´s where the opportunity is in this market.

To see links of the current inheritance tax table click here, for the proposed one click here.

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Posted in Ecuador for Investors, Investor News/Analysis

5 Ecuador beaches suffering from receding sand line- buyer beware

Although the Ecuador coast still has some extraordinarily good buys, and many beaches not at all effected by erosion, here are five places on the coast I would avoid buying front-line beachfront property due to the noticeably receding sand line.  
 
In other words, the beach there is disappearing fast and who knows, your investment could go with it.  
1. Engabao- The largely unknown step-sibling of playas, while only a few minutes drive from Playas the beach and scenery change dramatically in Engabao, while in Playas the beach is large and expansive, in Engabao the beach faces a direct direction and gets pounded hard by the surf, while surfers like the area, erosion is evident, this beach is disappearing.  

2. Chanduy- Chanduy faces the same direction and is on the same beach head as Engabao, just maybe a 45 minute drive west.  Chanduy is a unique fishing town with zero tourists that´s literally at risk of falling off into the sea unless the town invests quickly in some anti-erosion boulders or something.  

3. Las Tunas- A small ´very local´ town on the central coast near Ayampe, Las Tunas gets pounded by big surf, and erosion is evident, this is one place I may buy oceanview property but not beachfront.  

4. Jama/ El Matal- Famous among expats in Ecuador due to the several expat communities in the area, El Matal´s recent problems with tidal surges and disappearing beach are well publicizied.  

5. Mompiche- An otherwise beautiful little town with a fun vibe, good food and good surf, most non-surfers simply don´t stick around long cause most days theres simply "no beach left" or anywhere to walk.  Erosion is evident.  

But I am pleased to say that most of the rest of the Ecuador coastline does not seem to have this problem as the beaches are pretty much in the same spot they were 5-6 years ago when I first visited Ecuador.  

 
And in the towns above, although I dont recommend buying right on the beach, an oceanview property or a near-the-beach property could still be a great buy.  

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And we’re off! Foundation prep. Ecuador coast house build part 1.

So this week we broke ground on the 3 bedroom, 2 bath oceanview house here south of Manta, Ecuador.

The first step was to level the ground and dig the holes for the foundation and septic system all in one shot.

As you can see in the pics (click display images in your email reader) in came the heavy manchinery, which I rented for $25 an hour with specialized driver included.

The total came to 36 hours or $900.

Next step, get water to the lot, easier said then done, maybe, stay tuned!

puerto-cayo-house-for-sale

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Is there really NO car depreciation in Ecuador?

 

Today I sold my car in Ecuador.A 2013 model Chevy N300 mini-van for $13,000 USD.

I bought it one year ago from a used car dealership here in Quito for $13,000 USD.

So, I used the car for a year, put 26,000km on the car (16,100 miles), scratched it up a bit and still didn´t lose a cent on it.

No big repairs were needed, just oil changes, new tires.

Is this normal in Ecuador?  Why?  

Actually, yes!  Cars are so expensive here due to the import restrictions AND cars retain their value quite well.If you shop around a bit it´s common to buy a used car at market price, use it for a year or two and then resell it for at or just below what you paid for it.

In my own experience, I´ve seen for most car types and models in Ecuador, cars depreciate about $1,000 per year of use.

It never ceases to amaze me when in Ecuador people will drive a new car off the lot and then try to resell it a short time later for $500 less than they paid for it!

In places like the US you´d lose 30% of the cars value instantly or more!

Not in Ecuador.

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How to get a building permit in Ecuador in 3 days

Building permits can be tough in Ecuador, but they can also be ridiculously easy.

Depends a bit on the project and the municipal where it´s located.

In my experience, the municipal in Playas Villamil is really a pain.  Quito not so much.  While the municipals in Santa Elena (Salinas area), and Jipijapa (for area of coast south of Manta) are pretty easy.

My experience this week at the municipal of Jipijapa getting a permit to build my 170m2 (1829ft2) house on a 330m2 (3552ft2) lot was pretty straightforward.

The hardest part was the week or two wait for the municipal to send an inspector to define the construction limits or as they say here “linea de fabrica”.  It helped my architect knew somone in the municipal who owed him a favor (I guess).

Once that happened I had to go to the municipal with a signed official copy of the architectural plan which after heavy negotiating cost me $500 for a plan guaranteed the municipal would approve.  If not, he´d redo it.

Plus, I had to take several copies of the property deed (escritura), certificate of registry (certificado del registro de la propiedad), electrical plan also made by the architect, and a copy of the 2015 property tax payment (predios) which for my property cost well under $100.

Altogether the permit cost $135 and took 3 days.

The requirements are basically the same all over Ecuador but every municipal will have their particularities.

So now on the blueprints, permit, the 2015 tax payment and a few other minor things i´ve now spent a total of $900.

And now I´m also ready to build!

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Posted in Ecuador for Investors, Investor News/Analysis

The property flipping dilemma on the beach in Ecuador

OK, so I have flipped property on the Ecuador coast with success.

But it’s obvious to me now after doing it that that’s not where the real money is.

You see, truth-be-told, a lot of the cheap, Ecuadorian-made homes, especially on the coast, simply don’t meet North American standards, and chances are you’d spend more to fix it up then the whole place is even worth.

So, what’s the opportunity?

Build your own house.

And that’s exactly what I’m going to do starting later this week.

Can’t say I don’t practice what I preach.

Below is the plan for my new project… in Puerto Cayo, just south of Manta on the coast with a beautiful oceanview and a short walk to the beach.

Might be a little hard to see, its just a quick pic from my cell phone of the blueprints the architect gave me.  The nice oceanview is to the bottom right of the plan.

 But here’s my thinking based off my experience selling property on the coast of Ecuador.  

3 bedroom, 2 full bath.  That’s as small as I want to go, even though most people who move here or retire here are moving down as a couple or a solo person, I’ve seen they still prefer at least 3 bedrooms because they like having at least one guest room for their kids/friends visits and one room they can use as an office or storage den.  While 4 or 5 bedrooms is often a little much.

2 non-master bedrooms separated by bathroom.  This is nice cause the people in one bedroom won’t have to walk through or outside the room of the other to get to the bathroom.

Spacious kitchen with island.  Important for extra space and entertaining.

Plenty of closet space with walk-in closet in master bedroom.  From my experience, especially women really focus on closet space, important!

Laundry room with door to exterior so folks can take advantage of the nice weather and walk outside to hang clothes on a line like the locals if they wish.  Plus, you got to have your machines inside and out of the elements to prevent from rapid erosion in that ocean air.

A dining area and patio with a BBQ area and sliding glass doors that take full advantage of the nice oceanview.  Especially us North Americans, like a good BBQ on the beach.

2 sinks and a bath tub plus shower in the master bathroom which will also be extra spacious.

Raised floor of house by about 1 meter so that even if there is a 2 meter fence around the property the house will still have a nice oceanview over the fence.  Plus this should help keep moisture and insects out.

Spanish-tiled roof with porcelen tile floor.  The roof because thats the style most expect when down here  and its good for insulation and the flooring because with the humidity of the coast that’s really the best option (easy to clean, carpet forget about it!).

1-story only making it good for older folks who don’t do stairs.  Plus, this will lower construction costs a lot because I won’t have to invest in a lot of rebar as needed when making a floor-roof (losa in Spanish).

An outdoor shower for getting the sand off before entering the house.  This also has to be easily unaccessibled if the house is going to be vacant for a long time, don’t want this to turn into the community shower.

170m2 (1829ft2) of construction on a 337m2 (3627ft2) lot.  Nice spacious house with a small but cozy yard for a garden or the pets.

Minimal use of wood and metals with a focus on materials like aluminium and other materials that won’t erode like crazy in the salty ocean air.

So that’s the basic concept and thinking behind the plan, if you have any suggestions just click on reply to this email.  I’ll keep you informed every step of the way from the ground breaking to the sale!

 

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Posted in Ecuador for Investors, Investor News/Analysis

Why I just bought in Cayo, Ecuador? The next big thing?

This week I closed on my newest Ecuador property.

Four 330m2(3552ft2) lots, together, with an oceanview a short walk from the beach in Puerto Cayo.  The lots are flat and have road access, water, internet and electricity nearby (which matters!).

The plan…

…build a townhouse on each and resell.  I’ll send updates on how it goes.

But for now, why’d I choose Puerto Cayo?

Just like I liked Manglaralto (a small town near Montanita) when I bought a property there 2 years ago, and then watched it explode with development, foreign investment and a subsequent surge in prices… I like Puerto Cayo entering 2015.

It’s got one of the most spectacular oceanviews of nearby cliffs and offshore islands of the whole coast of Ecuador.  And rare for Ecuador, the ocean on a clear day can have a turquoise color due to the multi-color rocks beneath.

The beach has surfing, an activity that attracts foreign interest and gives people something to do.  It´s something Manglaralto doesn’t have, but nearby Montanita does.

I like the proximity to the city of Manta (population about 200,000) which is about an hour away, with decent shopping, big box stores and the nearest airport.

I like that its in the Manabi province on the central part of the coast, compared to Santa Elena, the province on the southernmost part of the coast, where the locals have a serious litter problem.

I love the seafood options people have in the oceanfront cabanas near town, and that the town is relatively safe, I know folks who live there that sometimes leave their doors unlocked.

I like the fact it is a sleepy town instead of a party town like Montanita or Crucita.

I also like that there are already a good amount of foreigners and foreign investment in the area, but that you can still find cheap land if you know how to look, like I explain in my full guide.

Foreigners attract more foreigners.

In short, I think the place could explode in the short term.

What do I NOT like about Puerto Cayo?

Most would still consider Puerto Cayo a bit remote.

It is.

It still lacks a lot of things like things to do, shopping, etc.

Also, there’s not many taxis in this town for some reason, and the distances can be far to walk.

Basic services can be iffy.  Not all lots have easy access to the city water system and the Internet, meaning you should inquire first!

In this area, beachfront land prices have already jumped in the last couple years due to foreign investment, the cheapest I found in my search was around $60-80 per meter.  3-4 years ago the prices started around $20-30 per meter in this area for beachfront.

But you can still find inexpensive oceanview lots a short walk from the beach for around the price I found mine at.  Thats the opportunity.  Foreigners love a view and Puerto Cayo has it, and at a good value for now.  But the place is poised for some serious possible appreciation in the short-term (1-3 years).

So get in while you can.

NEW! OCEANVIEW HOUSE FOR SALE FROM $145k

Enjoy the best oceanview of the whole Ecuador coastline right from your porch of the islands off Puerto Cayo!

The house is a short 3 minute walk from the beach and a short walk to the center of a sleepy, safe fishing village with AMAZING seafood!

Rise in the morning and slide open your sliding glass doors and bask in the 180 degree oceanview from your porch.

Also, enjoy the safety and comfort of a small gated subdivide without all the politics of a large one.

Entertain your loved ones during a BBQ from your deck as you whale watch and entertain your closest friends and family.  This beach house, built to North American standards is the place for you, all for under $1000 per square meter which is much less than the new construction residences in nearby Manta!

Year built: New! 2015
View: 180 degree oceanview
Lot size: 337.5 m2 (33750ft2)
Roof: Spanish-colonial style clay tiles
Availability: 1 finished house available only, 3 pre-construction

Construction size: one story 190m2 (1900ft2)
Distance to beach: 500 meters
Bedrooms: 3
Bath: 2
Patio/deck: covered (27m2 or 270ft2)
Garage: covered, one car.

Property type: Stand alone home in small (4-5 units) gated community.
Landscaping: Desert landscaping
Master bath: His and hers sink, bath-tub. (9m2 or 99ft2)
Bedrooms: Finished wide closets with extra large windows with screens.  (22m2 or 240ft2)
Water pressure: House comes with installed pump and pressure tank, plug and play.

City water: yes!
Sewage: Septic
City electric: yes!
Internet/Telephone ready.

Open kitchen with island, air extractor, and granite countertops.

Porcelen flooring
Spanish tile roofs
Screens for windows

Very desirable area for rentals… great possible return on investment! Duplexes in nearby vacinity are going for over $250,000 with no oceanview.

Finished! Move-in ready. Only 1 finished house available, could go quick!

For the finished house asking $159,000. For $145,000 get the same house on adjacent lot if you buy pre-construction!

For more details or a showing call 0988899774(Ecuador) or write us below and we will respond within 1 business day:

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Posted in Ecuador for Investors, Investor News/Analysis

Black-listed real estate agents in Ecuador – Background checks

Come on, man

Were you actually expecting a list of names here?

I’m not about to start mud-slinging.

But I will show you how to let the facts speak for themselves and how you can do a FREE background check on anyone you like in Ecuador.

Especially helpful before you do a bigger business deal with someone from or in Ecuador.

Within seconds you can freely see their entire criminal record (if they have one), specifically what they have been convicted of and even some legal matters they were involved in yet not necessarily convicted (as Ecuador isnt necessarily an ‘innocent-until-proven-guilty’ country).  You can even see things like if they’ve gotten seriously behind on child support payments or if they’ve been involved in any kind of fraud in the past.

In fact, it’s commonplace for businesses in Ecuador to check someone out in this manner before hiring them.

All you need to do the background check is their “cedula” number (thats the official, mandatory ID card in Ecuador).

Then go to the site  http://www.ministeriointerior.gob.ec/certificado-de-antecedentes-penales/

Once on the site under “datos del solicitante” you’ll need to put your information.

Then under “datos de la persona a consultar” you’ll need to input the full names and cedula number of the person youd like to check out and click CONSULTAR.  Thats it, on the next screen their criminal history will appear or a message will state they have no criminal history!

Now, no one can hide from you.

Especially helpful in real estate purchases where before the deal goes through the seller and buyer have to exhange copies of their IDs to write up the new deed (escritura).

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Posted in Ecuador for Investors, Investor News/Analysis


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