The Ecuador Insider

This is part 7 of the not-so-commonly-seen look into a real, live Ecuador real estate transaction (of my own with my own money) as I reveal all the dirt as it happens in this rare, completely transparent property play.

OK, so today I came to agreement with the seller to buy his 475 m2 (5112 ft2) beachfront lot near Salinas, Ecuador with title issues for $4300.

What’s my plan?

The plan is to buy—> legalize the title issues—> and resell.

Hopefully all within 1-3 months.

That’s it.

Nothing fancy about it.

I know I’m taking a risk here. I may lose everything I’ve invested.

But the potential reward is really good, based on my experience, the lot, when legalized with clear title, is currently selling for at least 2-3 times what I’m paying for it.

Once when I was 20 I bought a car in San Diego for $350 with title issues.

I didn’t know what I was doing and new to the state.

No problems until I went to register the car.

And I found out I couldn’t register it unless I paid an unpaid tax lein that was worth more than the car itself.

So what did I do?

I tried to sell it to an ex-girlfriend.

But then the cops pulled her over and i felt bad and gave her her money back, then I junked the car, it was essentially non-transferable, no one would buy it with the lein it had against it worth almost double the car (it hummed like a helicopter).

A loss.

This time I did my homework, went to the Registry office beforehand and followed up with numerous “experts” I know down here and have concurred that in fact the title issues of this property as mentioned in the previous posts can in fact be cleared in a timely fashion.

Besides, I must get it right cause my ex-girlfriends in Ecuador probably can’t afford it.

Haha, just joking.

We’ll see.

So what price should I put on it?

Anyway, stay tuned, we’ll see how it goes.

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$6000?

“Whew, that’s steep man.” I said as we sat down to negotiate the 475m2 (5112 ft2) beachfront lot I found for sale in Ecuador this week.

“Look, I’ve got another opportunity available, whats the minimum you’d accept?” (Mire, tengo otra opcion, digame cual es lo ultimo?) I asked.

“OK, OK, $5000, but that’s if you pay in cash.” The seller rebuttled.

“Well, I would pay that, but the lot has title issues, and I’m going to have to pay extra to fix that, and there’s a certain risk I’m taking on in that the title issues may not even be correctable, so because of that, I’ll pay maximum $4000.” I responded using the title problems as a bargaining chip.

And the bargaining went on…

Here’s 8 tips I have when bargaining with Ecuadorians.

8. Ecuadorians almost always will be willing to round off asking prices. For instance, if they’re asking $28k, they’ll almost always accept at least $25k, but don’t let that be your first offer. In my case, the seller was asking $6k so I knew he’d at least accept $5k.

7. A “no” is never a “hard no” in Ecuador, it just means “no right now”. Be slow, keep calling and be persistent, once they get a comfort level with you they might start lowering the price when initially they didn’t want to.

6. Learn a few key common very Ecuadorian phrases like “Cual es lo ultimo?” (Whats your lowest price?) and “Mira, tengo el efectivo, uno tras otro.” (I’ve got cash and I’ll lay down the bills, one after the other.) “Es mucho.” (That’s too much.)

5. Don’t be afraid to throw out a ridiculously low bid, at maybe half the asking price, they may not say yes but they won’t get offended and it gives you a good starting point for negotiating.

4. Be patient and don’t be afraid to throw a number out there and let it marinate while the seller thinks about it, they just may come around with time.

3. Caution, they may try to change the end asking price or terms on you after they’ve already been settled on if they feel they are selling to cheap. And generally, the spoken word isn’t a binder in Ecuador so once you got a deal it’s best to work fast before they have sellers remorse.

2. Don’t show money. You don’t have to, they’ll take you serious even though you’re dressed like a dirty bum simply because you are a foreigner. If you show money they may be more reluctant to bargain price.

1. Stay out of the picture as long as possible. As I did early on in this post series, try to have a local friend talk for you at least until you get an asking price to be sure you’re getting quoted a price a local would offer to another local, then you can come into the picture.

We’ll see what happens from here, stay tuned!

And for more helpful, useful info try my weekly newsletter on Ecuador living and investing, you can unsubscribe at any time:

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