Archive | Investor News/Analysis

pH setback with land in Ecuador

"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?

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?

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

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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…
 

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.

To share this post on Facebook heres the link ecuadorrealestate.org/new-inheritance-law-2015/

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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.  

To share this post on Facebook please copy and paste this link… 

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Posted in Ecuador for Investors, Investor News/Analysis

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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Posted in Ecuador for Investors, Investor News/Analysis

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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Posted in Ecuador for Investors, Investor News/Analysis

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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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

Macadamia farming in Ecuador – really?

China, India, Egypt, Jordan, Dubai… I can say one thing after living or visiting those places… what a barren wasteland!  At least the parts I saw.  

But Ecuador is different.  

Truly gifted.  

The green here in the Andes is a special color green, really.  So much water.  The dark black top soil runs so deep.  

All you have to do is find the right altitude and it will have a steady year round climate to grow whatever you like.  

So it shouldn’t surprise that a few innovative farmers have done just that, now profiting from Macadamia.  

Precisely, 3 with significant plantations in Ecuador.  And this week I was hanging out with one of the big three on his lot near the town of Los Bancos in Ecuador in the coastal lowlands  but still a ways from the ocean.  

He began… 

You need to find a place that has plenty of water, yet a lengthy dry season for the harvest time, which in this area is from March to July.  

Preferibly between 300-500 meters above sea level.  The Macadamia trees like 25-30 degrees C.

The Mac farmer continued, “you need at least 3000 trees to have a legit, profitable operation.”  

The trees are planted 9 meters apart so you can get about 150 trees on one hectare.  So 20 hectares is all you need to get in 3000 trees.  

Initial investment

Land in this area of Ecuador is alreayd a bit pricey compaatively to other farm areas of Ecuador because it is already great for Cacao (Chocolate bean) and Palm oil and the locals know it.  The going rate for good, yet vacant, farm land around here is $5,000 per hectare.  So for a minimum of 20 hectares that’s $100k.  

You’ll also need about $50k to prepare raw land ready for planting and to build yourself a small plantation home.  

Then comes the trees.  You can buy the seedlings from someone in Ecuador already growing Macadamia for $8 per tree.  For 3000 that would be $24,000.  

You’ll also need a tractor for Macadamia farming.  He says you can find a used one in good condition in Ecuador for around $15k.  

Production and profits
 
On the high end you can expect 18 kilos of brute, whole nut with shell and all per year per tree… and 15% of that is the inner nut ready for consumption.  Thats about 3 kilos from a top producing tree.  On the low end a tree in this part of Ecuador produces 12 kilos of brute nut shell which provides about 2 kilos of nut ready to eat per year.  

The local wholesale price for Macadamia in Ecuador now is $22 per kilo.  

So thats a per tree annual revenue of $66 (on the high end) which for 3000 trees equates to $198,000 per year.  On the low end that figure would be $132,000.  

Variable costs

The farmer I spoke with says he has 5 full time employees for his 50 hectare plantation.  Each worker makes around $400 a month.  

No electricity is needed on the farm and there is no irrigation system, the trees are fine with the natural rainfall.  He himself drives from Quito every weekend to manage the farm himself.  On the way back to Quito he fills the back of his pick up truck with the weeks output of Mac Nuts.  (He has a processing plant and oven in Quito he says cost him around $200k.)  But he said the plant is not necessary, most growers just sell wholesale, he said he’d buy your nuts at the wholesale price if you produced them.  

Also, during harvest time the farmer hires seasonal workers by the day (around $15 per day is the going rate in Ecuador) and for occasional weed cleanings and things too.  

Benefits of Macadamia

The biggest benefit to growing Macadamia in Ecuador is that it is an uncommon product that most locals don’t even recognize, thus, repelling the common thieves.  Plus, the product can not be consumed until processed by expensive machinery which few have, further repelling the thieves that often snatch the Cocoa beans which can be bought and sold at any streetside wholesaler on any given corner in the Cocoa producing areas.  

Also, obviously, the value-added possibilities of this product are endless.  

You can process your own nuts, package them, add flavors and sell to the bakeries and grocery chains locally, or even export them.  Mac Nuts don’t go bad for over a year after processed according to the farmer.  

Plus, the farmer said local demand for Macadamia is growing significantly and he doesn’t export.

“The local demand has been plenty for me.” 

He continued, “With a farm this size, all you need is one bakery chain to buy your nuts on contract, and you won’t have to look for buyers anymore.” 

The drawbacks…

Of course, there are reasons why everyone is not growing Macadamia.  

Macadamia in Ecuador requires a VERY specific climate, not too humid, not too dry, like the one here near Los Bancos.  

Also, you won’t see any production for the first four years.  And the peak production I mentioned above won’t happen until around year eight.  But the trees live and continue to produce for 50-60 years if well maintained.  

But as a farmer with expenses and payroll there are ways to meet your daily costs for the first few years.  The trees are planted 9 meters apart and are small at first, so you can grow short-sycle crops in between until the Macadamia trees start producing.  

Where I’m at, the farmer grows Maracuya (Passion Fruit) which grows like weeds and can be sold quickly as well.  Also, most macadamia farmers have part of their farm growing Cacao (Chocolate) which is a shorter term crop which reaches peak production at 3 years of age.  

You’ll see ‘Buonamici’s Mac Nuts’ on a shelve near you soon.  :)

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Posted in Ecuador for Investors, Investor News/Analysis

Beachfront or oceanview in Ecuador?

Good question. 

Well, obviously if you can get your hands on a cheap beachfront property, you should go for it. 

By “cheap” for Ecuador standards, I mean anything less than $50 a square meter ($4.65 per sq. ft).  On the high end, I’ve seen folks ask (and get) as much as $200 per square meter for beachfront land.

But I think entering 2015 the real opportunity is in the oceanVIEW properties along the coast.  

You see, the Ecuador coast is lined with oceanfront mountains like the California coastline providing many properties with a spectacular view.  

And you can still find many of these oceanview properties CHEAP.  

By cheap, I mean for instance, a 400 m2 (4300 ft2) lot with a 180 degree oceanview in Ecuador you could probably find starting around $8,000-$15,000.

Maybe less.  

Us gringos love a view.  

Ecuadorians don’t care much, but that’s what kept the price down so long on these properties.  

In fact Ecuadorians build homes with bedrooms with no windows then when you comment on it they look at you like you’re the crazy one for saying something. 

Buy some oceanview cheap from locals, build something (or not), flip it to a foreigner is exactly the strategy Id suggest for someone just getting into Ecuador real estate.  

And its the strategy I’ve followed and plan to follow again entering the new year.  More on that in updates to come.  

How do I find the best priced properties?  Its a bit more complicated in Ecuador, I answer that and 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

The golden fruit of Ecuador – Papaya

 

When you move to a new country and try to sell a product to the locals, there are two ways to do things.

The right way.

And the wrong way.

Especially when it comes to food.

The wrong way, at least if you dont have a multi-million dollar marketing budget, is imposing your “superior” foods on the local population.

For instance, pizza.

Maybe you can make a much better pizza than they have available locally according to your North American or European standards.

But maybe the pizza in Ecuador is the way it is for a reason.. with its more liquidity and almost sweet tomato sauce… cause thats how the locals like it.

Its hard to know as a new-comer.

So all you can do is observe.

And to sell the locals something they already eat like crazy.

Its simply much easier.

Enter Papaya.

But there are two types of Papaya that grow in Ecuador.  The Hawaiian breed and the Criolla breed.  The Hawaiian is smaller and for export primarily, cause the locals don’t eat it.  (Actually, some consider it pig food.)

The Criolla is the gigantic rugby-ball-looking Papaya that is for local consumption only, not export, and boy do the locals love it.

Its truly one of those products where if you grow it they will come.

Papaya Criolla likes a dryer climate, while it can and does grow in the Amazon region its better grown in the coastal region of Ecuador.  Specifically in the areas of Santo Domingo to Independencia or on down to Quevedo.

In these ideal areas, the Papaya can grow without any formal irrigation system in place, its fine with just the natural rainfall in this area.

The Papaya is also best grown on flat or almost flat land.

In these areas land apt for Papaya production usually can be found starting around $3-6000 USD per hectare.  According to my local Papaya expert, 30-40 hcts is the minimum for a worthwhile, highly-profitable Papaya farm.

For today, lets take a closer look at the Papaya Criolla (lets give the locals what they already want).

The Papaya tree has a lifespan of 2 years.  It begins to give fruit at the 8 month mark.

And harvests from there are weekly.

The Costs

The initial costs of planting the crop and preparing the soil average around $4-5k per hectare.

After that, costs are minimal with this crop as for a farm of 40 hectares, all you need is one live-on full-time employee (who makes about $500 a month).  And about 5 part-time employees that from the time the plant begins to give fruit at the 8 month mark, you will need to hire them about 2 days a week paying each $15 a day to harvest, weed and fertilize the crop as needed.

It may also be a good idea, especially starting up, to hire a technician or agro-engineer with experience in the crop, to help manage the technical aspects of the farm.  For a full-time agro-engineer you are looking at minimum $1000 a month, but you could also hire one on a part-time basis.

The Production

Each hectare fits about 1100 Papaya trees.  About 100 of those are masculine and dont bear fruit and are used for future breeding purposes only.

Each tree during its lifespan gives at least 20 fruits, some can give as many as 30 if the care has been good.

Thats 20,000 fruits per hectare per each 2 year cycle.

The Sale and The Profit

The fruit sells wholesale at about $1 per fruit.

The fruit is an easy-sell and is often sold to the retail sellers at open-markets or directly to top-end restaurants.

Thinking in ballpark figures for busy people like yourself, thats $20k per hectare in brute sales over the course of a 2 year period.  According to my expert, the grower can expect about 40% of that is usually the profit for the farm owner.  Thats $8k per hect, every two years… so for a 40 hectare producing Papaya farm, that would be about $320k over a two year period or $160k per year, however youd like to look at it.

ROI

So even if you bought the land at the more conservative $6000 per hct for a 40 hct farm… for a total of $240,000 youd be able to realistically make that money back within a bit over 1 and 1/2 years.  Not bad.

This is certainly a product Im considering for my upcoming agro-investment here in Ecuador.

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Posted in Ecuador for Investors, Investor News/Analysis

Is Chicken farming in Ecuador really that profitable?

Ecuador is closing its borders.

To many imported products that is.

I don’t necessarily agree with it, but it is what it is.

Like it or not, with policies like this there are always a few “winners” and often a lot of “losers” (like the end consumer who now has to pay more for inferior products).

But why not take advantage of the opportunity and start producing one of the products that has now become more restricted to import?

Like Chickens.

Already, one of Ecuadors most popular short-cycle “cash crops” among locals.

It’s great because every 6-7 weeks you “cash out” recouping everything you’ve invested and the take-home-profit.

And its one of those produce it and someone will buy it things.

Everyone eats chicken in Ecuador.

This week I had the chance to sit down with a veteran chicken farm manager at his place during my research.

Here’s the skinny… 

Start up costs, Investment

One of the great things about chicken farming is the small amount of land comparatively you need to get started.  Plus, the land itself can be in the boonies and CHEAP because thats ideal for a chicken farm.  You want to distance yourself from any sizable populations or neighbors cause they may not be fond of the smell.

You’ll need a lot with at least space for one farm house big enough for a sizable population of chickens.  Most chicken farm houses are 20 meters by 120 meters to be precise.  Thats 2400 m squared of land.  Not much.

The lot has to be flat and have a water source.

But many chicken farmers have more than one farm house, for instance 7, with a batch of chickens each, so they can be harvesting a new batch each week providing a steady income so this business pays for itself.

Each farm house this size holds 20,000 chickens.

You can chicken farm about anywhere in Ecuador, but it is ideal in the warmer regions of Ecuador like the coastal lowlands.

In warmer weather the growth cycle shortens to 40-42 days, while in colder highland areas the cycle can be more around 50 days.

Costs

This business is also nice because its not labor-intensive.

You’ll have to pay one farm house keeper per farm house.  They usually make the basic wage in Ecuador ($340/ month PLUS incentives totaling around $800/month).

Every 6 weeks you’ll have to pay about 10 guys $10 a day each for three days to round up the chickens for sale.  Total $300.

The food can run around $7000 per cycle (6 cycle).

Basic services like water and electricity aren’t much in Ecuador but could also cost a few hundred dollars.

The chickens themselves are bought young and little at $.40-.50 cents each.

In total, budget $70,000 USD to raise 20,000 chickens my expert explains.

Income and Production

After 6 weeks the chickens are sold (alive) for $.80 cents per pound. Each chicken weighs around 5.5 pounds.  Total= $4.40 per chicken roughly.

$4.40 x 20,000 chickens = $88,000.

Profit 

Talking in ballpark figures per farm house which holds 20,000 chickens over a lot of 2,400m2 the profit would be roughly $88,000-$70,000 TOTAL $18,000 every 6-7 weeks.

Then depending on personal preference anywhere from 5-15 days will be needed for farm house cleaning and disinfecting between cycles.

Risks

Of course, diseases are the biggest risk, thats why if you have multiple farm houses you want to spread them out and be sure to have only one farm worker exclusively per farm house.  He could carry a disease on his clothes from one house to the other.

But now a days the chickens come vaccinated and this is not a huge problem at all in Ecuador.

Selling the crop is not a problem, just make it and finding a buyer is relatively trivial.  What does vary a bit is the market price like most commodities.

Want more?

Like but what about the technical aspects of the actual chicken-growing, how to get started, buy the best chickens, find the best workers and more?

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Posted in Ecuador for Investors, Investor News/Analysis

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?  

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Posted in Ecuador for Investors, Investor News/Analysis

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

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