Land
Plays—Back-to-basics Buys Whose Time Is
Right Now
Aug. 8, 2008
Panama City, Panama
PLUS:
n
Teak, Coffee,
Sugarcane, Bananas, Rice, Watermelon, And
Cattle…How To Grow Profits In Panama…
n
Buy Big, Buy
Cheap…Buy Argentina…
n
Turn-key
Vineyards In Mendoza…
n
Condos Under
$100K In Panama City?
n
“Where Can A
Common Man Run That Is Safe And Cheap?”…
n
The Benefits Of
Venezuela’s Decree #356…
AND:
n
The Cheapest Way To Fly Long
Distances…
HouseAroundItaly
is your premier resource for
property
purchase in Abruzzo and all Italy. Full and
reliable assistance you can trust during
your search, at the time of purchase, and
even after you own.
----------
“Commodities have done 15 times better than
stocks in the past 10 years...and they’ll
continue to do better. I’m buying
agricultural commodities...they’re still way
below their all-time highs.”
-- Investment Biker Jim Rogers at the Agora
Financial Investment Symposium in Vancouver earlier this summer
Dear
Overseas
Opportunity Letter Reader,
I’m taking Jim’s words to heart…though maybe
not as he intended them, strictly speaking.
Lief has been
scouting land here in Panama for the past 18 months. His objective was beachfront
for development, but, in the course of his
searching, he came face-to-face with the
many other kinds of—and uses for—land in
this fertile country.
One parcel he looked at was given
over to acres and acres of watermelons.
Other pieces boasted fields of sugarcane,
bananas, coffee, rice…
And, of course,
cattle. Panama’s interior is cow country.
Finally, Lief and his two partners found
the ideal piece of land for their
development project (www.LosIslotes.com)
on the Pacific coast of the Azuero Peninsula. The piece is more than 500 acres.
“You
won’t develop all 500 acres right away, will
you?” I asked the other day driving back
from a visit to the property with Lief and
his partner Robert.
“No, probably not,” Lief responded. “Why?”
“Well, you could use this as an
opportunity for a commodity play,” I
suggested. “Take some of the acres you won’t
be using for lots, amenities, or
infrastructure and make them productive.”
“Right, we could run some cattle,”
Robert chimed in. “In fact, I know a little
about cattle farming.”
According to Robert’s
back-of-the-envelope calculations in the car
that afternoon, we could buy 100 head of
cattle for $400 apiece.
Then we’d
invest an additional $200 per head over the
next 9 to 12 months, to fatten them. Then
we’d sell them, less than a year after the
initial investment, for $1,000 apiece.
“What about overheads and expenses?” I
asked.
“You hire one
guy to tend the herd for you. You have a few
other nominal costs. At the end of the day,
you net maybe 30% to 40%.”
Lief grew up in the Arizona desert. I grew up in Baltimore City. In other words, we’re both sufficiently naïve and
inexperienced to go along with Robert’s
business plan. We’re going to buy some cows.
In
his defense, Robert does know about farming
(though the verdict is out regarding his
cattle know-how). For the past 15 years,
Robert has managed the teak plantations of
United Nature…another
commodity Panama’s fertile soils
support to profitable end.
Out at Los Islotes, we accidental
farmers mused that afternoon driving back to Panama City, we could also grow bananas, sugarcane, watermelon,
coffee…
For us, this is
part-lark, part-long-term play. We aren’t
going to focus enough to make a serious
business of it. Nevertheless, I think it’s
worth the effort. We should see some return.
More than that, this kind of investing makes
sense to me. It’s fundamental and real. And,
in today’s investment climate, back to
basics seems a sound strategy.
If we were going to take this more
seriously, though (as maybe, eventually, we
will), we’d shop for land intended for
commodity production. The land at Los
Islotes is primo beachfront, the most
valuable kind of land this planet of ours
has to offer.
If we
were buying to grow sugarcane, bananas, or
timber, we wouldn’t buy coast. And we sure
wouldn’t pay what Lief and his friends paid
for Los Islotes.
In the interior
of this country, we’d look to spend $1,500
to $2,000 per acre for productive land. Out
in the
Darien, you can buy land ideally suited to
producing grade-A teak wood, for example,
for maybe $1,000 per acre.
If we were going to be truly serious about
investing direct in commodity production, we
wouldn’t shop in Panama at all. We’d look
much farther south, down Argentina way, where productive land is among the most
productive and, to the point, the most
cost-effective in the world.
In
Argentina’s Catamarca Province, for example, you could buy land today for
growing olive trees for as little as $20 an
acre. In Mendoza Province, you could buy land right now for breeding cattle
for as little as $60 an acre. You could farm
sheep in Chubut Province on land you bought for $30 an acre. Throughout
the country, on land you could buy for, say,
less than $1,000 an acre maximum, you could
grow trees, tea, yerba mate, soy, maize,
sunflower, tobacco, sugarcane, fruit trees…
And grape vines. The best choice for this is Mendoza Province, where you can grow Malbec, Cabernet Sauvignon,
Merlot, Chardonnay, and Sauvignon Blanc
grapes to produce world-class vintages, both
red and white.
Mendoza is being heralded as the “Next
Napa.” Up north in that
California wine-growing region, you’ll spend
as much as $300,000 per planted,
grape-yielding acre. Down in the New Napa,
you can buy blanco (that is, bare
land suitable for planting) for, again, as
little as $3,000 per acre.
Or you could
indulge your wine-loving, vine-growing
fantasies turn-key, investing in a boutique
vineyard of, say five acres of grapes,
planted, maintained, harvested, and bottled
each year for you, for less than $60,000.
Kathleen Peddicord
P.S. For more on productive land investments
in Argentina, including the boutique
vineyards in Mendoza, get in touch here:
Argentina@LiveandInvestOverseas.com.
Gran Pacifica
is Nicaragua’s premier private, gated five-star resort
community by the sea. There’s a reason more
than 200 leading business entrepreneurs,
professionals, and retirees from around the
world have already purchased here…and this
opportunity will be open only a short while
longer. 70% financing makes your decision to
own even easier.
----------
TODAY:
Indeed, you can buy a condo in Panama City for less than
$100,000. One of your fellow readers sent me
this link yesterday:
www.StevensListPanama.com.
See the “Condos Under $100K” page. The first
listing there caught my eye. Perfect rental.
If you, too, are intrigued, we may find
ourselves bidding against each other…
***
“If
you’re flying long-distance, say from the
U.S. to
Australia or Asia, you may find a cheaper fare by opting for a
round-the-world ticket,” writes
Editor Lynn Mulvihill. “RTW agents work with
airlines around the world to combine the
cheapest flights they can find into
affordable itineraries.
“Going to Australia, for example, you could travel to the Cook
Islands, Auckland, New Zealand, and Sydney, Australia,
from just under $1,500. As I write, the
cheapest round-trip ticket from Los Angeles to Sydney on Expedia.com is $1,639. So, not only are you saving
money on your airfare, you’re getting to add
to your travel experience.
“What if you
don’t want all those stops? Some agents will
allow you to omit a stop or two. Be sure to
check the details before you book.
“Good sources for RTW tickets include:
www.airtreks.com
and
www.roundtheworldticket.com.”
***
Correspondent Don
Ellers writes from Venezuela:
“TheMoveChannel.com recently had this to
say about my favorite beachfront investment
haven: ‘Failing to accompany the current
positive promotion of Venezuela for foreign
investment is sufficient and accurate
information about why an investment made is
secure and safe against a backdrop of what
many incorrectly assume is less than stable
political leadership.’
“Incorrect indeed. Venezuela isn’t politically unstable. Nor is it economically
unviable. It’s a nation with a $182 billion
economy that has expanded at an average rate
of more than 12% a year in recent years.
Chavez is committed to keeping this growth
rate going. ‘You want to invest in Venezuela?’ he says. ‘Come
on. This government isn’t an enemy of the
businessperson.’
“A recent article in The International
Herald Tribune noted that ‘It is thanks to
foreign investment and a resultant
strengthening of the economy that President
Chavez has achieved many of his domestic
goals for health care, employment, and
education. For example, he has taken the
minimum wage in
Venezuela to the highest level in
Latin America.’
“To attract more foreign investment, the
country passed Decree #356 in 1999,
guaranteeing that foreign investors would
have the same rights as Venezuelan
investors…and that those rights would be
protected. Most important in the decree is
Article 6, which says: ‘International
investments will have the rights to an equal
and just treatment conforming to the norms
and criteria of international laws and will
not be subject to arbitrary measures or
discrimination that could impede
maintenance, management, usage, enjoyment,
extensions, sales, or liquidation.’
“Thanks to the
decree, all real estate in the country is
freehold, registered, and titled, with the
exception of land already owned by the
government.”Don
makes the point that to appreciate how
overlooked an opportunity this country
remains, you’ve got to see its coast for
yourself. Venezuela hides some of the
world’s most beautiful white-sand beaches.
Don is offering Get Acquainted Tours:
www.DreamCaribbeanRealEstate.com.
---------- Deadline
Approaching ----------
The cost of a
Reforestation Visa, Panama’s best residency option, is scheduled to
double Aug. 26.
If you’re thinking of settling in the
world’s premier retirement and tax haven,
act now.
United Nature details here.
FROM THE MAILBAG:
“Everything now seems to be for the wealthy.
Are there no places in the world where the
rich getting richer haven't driven the cost
of living beyond the reach of regular
people? Even here in the U.S., the rich of
the two coasts are moving inland to places
where their money allows them to buy big,
driving up property prices and taxes. Where
can a common man run that is safe and
cheap?”
-
- Vernon T., expat wannabe
Dear
reader, see Wednesday’s dispatch, “Reduce
Your Cost Of Living Big-time…Maybe.”
Specifically, the world’s most affordable
retirement havens right now are
Ecuador,
Uruguay,
Nicaragua,
and
Argentina.
Our Roving Latin America Correspondent
Christian MacDonald, whose pencil is sharper
than anybody’s we know, has filed detailed
budgets for each of these countries showing
you how you could retire in style (and, yes,
safety) for as little as $660 per month.
---------- Borrow To Buy In Central America ----------
Georgetown Trust lends
in
Panama, Nicaragua, Costa Rica, Belize, Honduras, and beyond. Attractive terms.
Find
out more about Georgetown Trust here.
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