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Now that they've reached this important phase of development, the developer is planning a price increase. I'm writing today to let you know that I have talked them into postponing this for Live and Invest Overseas readers. I believe this is one of the best agri-land investment opportunities you'll find right now, and I want to be sure you have a chance to get in on the ground floor, so to speak.

I also, as you know, recommend that you buy what you see...meaning you should, if you can, come see this organic mango plantation for yourself. The developer is offering a tour of the property in September and have agreed to hold current pricing for Live and Invest Overseas readers through the dates of that tour.

One key risk in any agricultural project is implementation. In this case, at this stage, this risk has been minimized significantly. With planting underway, you can have a higher degree of confidence that your trees will be planted according to the contractual timeline.

Another risk for any agricultural project is water, as I've mentioned. Farmers in California are having a rough time right now thanks to the prolonged drought. Panama is in the tropics and enjoys significant rainfall every year. Nevertheless, the developer here chose for his mango plantation land with several rivers running through it, including a river that runs year-round, even through the dry season. They have the rights to take as much water from it as they need.

Market risk is something else to consider with any turnkey project. With an agricultural project, this translates to: Who is going to buy your product?

Mangos are the most eaten tree fruit in the world. The market is large. That said, the tropical fruit markets in the United States and Europe could be considered in their infancy...but expanding big time. The USDA's figures for mango consumption between 1980 and 2012 show an increase of a staggering 896% (from 0.25 pounds per person to 2.49 pounds per person, on average), and the demand continues to grow. In 2013, mangos made up 39% of this market.

Not all mangos are created equal. The agricultural partner of the developer behind the plantation in Panama has created a variety of the fruit that has more meat and is naturally sweeter than most any other mango you'll find.

A quality product and a big and growing demand aren't a guarantee that you'll be able to sell your inventory, right? You have to have access to buyers. In this case, the developer already has a 350-hectare mango plantation in production and is selling those mangos to juice companies in Panama. These same outlets have said they'll take as many additional mangos as the developer can produce. Right now those juice companies have to import the vast majority of their mangos for processing, which is far more costly than buying locally grown fruit.

While having that ready-made outlet available is great, it's not the most profitable strategy. Therefore, the developer is in discussion with several groups in the United States, from dried fruit wholesalers to grocery stores, lining up contracts for selling your mangos directly into the U.S. marketplace where they would be able to charge substantially more than the local Panama juice companies are paying.

Selling directly into U.S. markets would mean a more profitable operation; however, the financial projections the developer has put together are based on selling at local Panama prices. In other words, the projections are conservative. Using those numbers, the projected annualized yield (or IRR) through 15 years (although the project will produce for 60 to 80 years) is 16.52% at the current investment price. The mango trees don't start producing until year four, but, when they do, the annual cash flow is very healthy. By year five, when the trees are fully producing, the yield on your original investment is projected at 30% per year.

The investment price is US$33,500 per hectare right now. The developer hasn't finalized the plan for the coming price increase, but it will be at least 10%. As he's sold out phase one already and has started selling phase two, it's been a tough conversation to persuade him to hold the original launch price for a couple of months more for Live and Invest Overseas readers. But, as I said, he has agreed.

If you're interested in an agricultural investment and like the idea of mangos or Panama, now is the time to take action.

You can find out more here.

Lief Simon

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And so is ours. We will start construction of our Founder's Lodge this month. This will be a Spanish colonial-style clubhouse for owners and visitors, with a great room, a dining room, four guest suites, a pool, and a bar-b-que area. In just a couple of weeks, Kathleen and I, along with our children and some friends, will gather with the local mayor, our architects, our contractor, Gary, and his crew to throw the first shovelfuls of dirt and to drink a toast to commemorate this turning point for Los Islotes.

Indeed, Los Islotes is entering a next phase of development. We have moved beyond drawings and plans to infrastructure and construction. Which means it's time to raise prices.

All prices for ocean-view lots will go up starting March 15. 

If you've dreamt of waking up each morning to Pacific Ocean views enjoyed from the comfort of your own home in a private beach community, then Los Islotes could be calling your name. I’m hardly unbiased, I realize, but I have to say: This is the most beautiful stretch of coast I’ve seen anywhere in the world in all these many years of scouting.

And this is the last time you’ll have the chance to become part of the community we’re developing on this beautiful coast at current Phase 1 prices.

Reserve a lot before March 15, and you can lock in the current price. You'll then have 30 days from the date of your reservation to visit the property if you'd like before completing a purchase agreement. That timing works well if you’d like to join us for our next tour out, which is scheduled for April 12-13.

You can also still avail for a limited time of developer financing, which allows you to buy with 20% down and 0% interest, with the balance paid over 36 months.

Los Islotes Sales Director James Archer and his team are standing by to tell you more and answer your questions. You can reach them here.

Lief Simon

P.S. We took some photos while we were out there last weekend. Take a look.

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We'd never encountered a couple of tourists quite like them in Panama before. A couple of young, well-dressed, obviously successful American guys who'd hopped a flight for a quick weekend in Panama. Retirees, backpackers, eco-tourists, older gentleman in search of younger female companionship...sure, Panama's got plenty of those. But young urban professionals, for whom money didn't seem to be any object, hopping around the country over a long weekend? That's new.

And those two guys weren't the only ones like them we met this weekend.

Buenaventura, Panama

We spent the weekend at Buenaventura, a resort development on Panama's Pacific coast about an hour-and-a-half outside Panama City. We've known Buenaventura since her birth, about 15 years ago. We've watched her these years since as she's grown, slowly at first, more quickly more recently. Back at Buenaventura this weekend, we recognized that this place has come of age.

When we saw Buenaventura for the first time years ago, it was, frankly, just another piece of land with a nice coastline. Our first visit, the clubhouse was under construction, along with a handful of getting-started condos. Today, Buenaventura features the best resort hotel in the country, truly five-star (and that became, just about a month ago, a JW Marriott property); a clubhouse that, with its five swimming pools stretching, one after another, to the beach and the ocean, could be at home on the cover of Conde Nast Traveler magazine; condos, townhouses, private homes, and beachfront villas (for which "villa" is not an inflated description); an 18-hole golf course and golf club; plus several restaurants, shops, a church (where two weddings took place this weekend), and a spa.

Nothing at Buenaventura, Panama is cheap, but it's all a good example of getting what you pay for. The service, the amenities, the food, the ambiance...it's all of a better standard than you'll find anywhere else in this country...better, almost, than you'll find anywhere else in Central America.

At the pool, in the restaurants, at the concierge desk, all weekend, we ran into all kinds of characters we've met before in this country only now and then, never before in such a high concentration--American families with small children, a group of French women, the guys from LA, and an entire busload of upscale gringo tourists.

Tourism in Panama has turned a corner. This country, like Buenaventura, is coming of age, increasingly recognized as a mainstream holiday and beach destination.

For the past five years, since the global real estate market debacles of 2008 and after, people have asked when we expect the collapse to come in Panama. Certainly the Panama City property market is headed for a fall...isn't it? So much construction--of hotels, condos, and commercial space--so much new inventory coming online. How could it all possibly be absorbed? Prices have to tumble, don't they...even crumble?

Panama City prices did soften in the wake of 2008, by about 20% across the board. But they've held their levels since and have even begun appreciating again. I don't see any further tumbling in this market's future anytime soon. Nor in the rest of the country, either.

I haven't been able to confirm this as fact yet, but, last week, I was told by two people I trust and who usually know what they're talking about that Panama banks today have an average liquidity rate in excess of 60%. Meantime, the government of Panama continues to take the proceeds from Panama Canal operations and plow them into never-ending infrastructure and improvement projects across the country.

No, you don't get the feeling that this market is in for any correction. You get the feeling, traveling, doing business, and living in Panama, that this country, like its premier resort offering Buenaventura, even with as far as she's come, is still just getting started. You get the feeling that there's still big upside to be seen...and that this is a place where you'd do well to take a little stake, for the coming decade and beyond.

Kathleen Peddicord

P.S. What else this week?

  • Penonomé's riotous Carnaval (which I experienced firsthand earlier this month and survived to report on in this month's issue of the Panama Letter) has put the town on the map, but the people of Penonomé also host annual orange, tomato, and sugar cane festivals.

When it's not celebrating and putting on a show for visitors, Penonomé is, at heart, a humble country town--family-oriented, quiet, safe, peaceful, friendly, and traditional.

But don't mistake humble for poor. The agricultural festivals bespeak the town's long-established agriculture-based economy. As a commercial and banking hub for the big-time farmers and ranchers from the fertile hills and open pastures just outside town, significant agri-business profits pass through Penonomé.

And don't mistake traditional for backward. The town is served by high-speed Internet, six banks, open-air produce and meat markets, fully equipped pharmacies, athletic fields, a university, a hospital, clinics, and loads of restaurants, bars, and casinos. Modern shopping centers, including chain restaurants and a 24-hour grocer, have sprung up along the Pan-American Highway, the main route into town from the east or west (or the north or south, depending on how confused you are by Panama's unique geography)...

  • "Ms. Peddicord, would you mind sharing where you live throughout the year and why you chose each individual location?"

--Question from a reader on Huffington Post

I write today from Panama City. My family and I moved here it will be five years ago this July from Paris.

From Paris to Panama City?

Before I answer that question, I'll back up a little and start from the beginning...

  • Surf, sand, scuba diving, lazing on the beach, watching sunsets while sipping aperitifs...that all sounds like the perfect vacation destination, doesn't it? But here's some really good news: It could also be a description of your new retirement home.

As the Northern Hemisphere slowly creeps its way out of winter, we went on a virtual tour to find you properties located within a stone's throw of five of the world's best beaches...with sunshine and beautiful sunsets aplenty...

  • Most folks considering the idea of retiring overseas focus on options in Latin America. If your base is North America, this makes sense. Countries south of the border are, first, nearby and, generally, easily accessible. In addition, they can also offer two things that most retirees actively seek: a low cost of living and an abundance of sunshine.

But there's a world beyond these Americas that can also offer good weather and a low cost of living...plus, in some cases, some things you won't find here. In fact, the world's most affordable overseas retirement havens today are not to be found in Latin America, but in Asia. As a friend who has been retired in Asia for many years puts it, "Everywhere in Asia is more affordable than the cheapest places in Latin America right now." That may be a stretch, but pockets of Thailand, Malaysia, the Philippines, China, Vietnam, and India, for example, can be absurdly cheap. You could live a modest but comfortable life in this part of the world on a budget of $700 or $800 a month, even less...

PLUS--From resident global real estate investing expert Lief Simon:

I've written this week to readers of my Offshore Living Letter about the objective of organizing your life so that your passive income is greater than your living expenses. It's an ideal situation that we all can strive for...understanding, of course, that achieving it requires time, planning, and, I'd say more than anything else, diversification.

My preferred way to generate passive income is from real estate--specifically from rental income, from residential, commercial, or agricultural property, all of which qualifies as passive income (although I know some people with rental properties who would say they work hard for that passive income).

Much better, whenever possible, to invest in solid turn-key opportunities for generating rental income. One such turn-key revenue-generation property option would be a condo hotel.

Condo hotels give you built-in management while offering diversification offshore. You don't find these in the United States, because most condo hotels pool revenue and disburse profits to unit owners rather than tracking the nightly rental for each unit individually. Therefore, these would be highly regulated in the United States.

The benefit of pooling is that you don't run the risk of the management company playing favorites with any specific units. The downside is that you can't differentiate your unit to try to get better occupancy. However, most condo hotels are professionally run hotels that offer management and branding that help you achieve good returns.

Depending on the type of condo hotel structure in place and the location, the returns for a condo hotel investment can range from okay to excellent. For example, leaseback investments in France, which are essentially condo hotel investments where the management company pays you a fixed return no matter what level of profits the hotel actually manages to achieve, historically offer 3% to 6% net yields. Resale units in Medellin, Colombia, that I've written about in the past can return net yields between 6% and 7%.

Investing in a condo hotel unit pre-construction brings some additional risk (you're taking the risk that the hotel will, in fact, be built), but it also comes with more potential upside; the projected net yields based on the original purchase price are typically much better than even the 7% you might get from, say, a resale unit in Medellin. Investing in a condo hotel pre-construction also has the advantage of not requiring all the cash up front; typically, you make staged payments during the period of construction.

Right now in Panama City I know of a condo hotel investment still available "pre-construction," even though construction is, in fact, under way. Unicorn is expected to be delivered by the end of 2014.

Unicorn is an all-suites hotel whose target market is businessmen traveling to Panama. In addition to flagging the hotel as a Park Inn (Carlson Group's mid- to upper-market brand), the developer also has an agreement in place with an Italian designer that puts Unicorn as the center piece for fashion events in Panama.

With affordable suites (expected to charge an average daily rate that is about 70% of the rates for a suite in the same category of hotels that aren't all-suite), Unicorn expects to gain loyalty from frequent business travelers. The key metrics for any hotel are the average daily room rate and the occupancy rate. These tend to move hand in hand throughout whatever seasons a market sees, moving lower during the slow season and moving up during tourist season, to help keep occupancy as high as possible.

Panama hotels saw a small dip in occupancy rates last year. The figures I saw were something like a 10% drop in occupancy rates in 2012 across all hotels in the city. However, that decrease came in a year that saw an increase in the number of available hotel rooms along the lines of 62%. (The biggest surge in new hotel rooms in Panama City in 2012 came from the Hard Rock Hotel, which has 1,500 rooms.) The fact that occupancy rates remained as high as they did in the face of this dramatic increase in inventory is a testament to the continued growth in both business and tourism travel to this city. And is an important part of the reason why the developer behind Unicorn, Bruno Carnasella, returned to Panama.

Bruno, originally from Italy, developed some projects in Panama in the early 1970s before turning to south Florida, where he went on to develop high-rise residential projects for decades. Then, about four years ago, Bruno returned his attention to Panama, specifically to Panama City. He was attracted not only by the potential he perceived in the hotel industry in this city, but also by the big potential he sees in the country in general over the coming 10-plus years.

Despite his bullishness on Panama, Bruno's projections for the returns on an investment in Unicorn are conservative. He's projecting just 60% occupancy and a room rate of US$229 for year one. You can pay more than US$229 today for a regular room in some of the finer hotels in Panama City during high season.

Regardless, using Bruno's figures, investors are projected to return 8% during the first year of operations, increasing to 13.3% by year five, assuming reasonable increases in occupancy and room rates.

Particular positive factors for the hotel industry in Panama City include further airport expansion at Tocumen International Airport and the planned construction of a new convention center. Meantime, Panama's GDP growth is back in double-digit range (10.6% for 2011 and projected to be more than 11% for 2012). I believe it is very reasonable to anticipate demand for hotel rooms in this city growing rapidly over the next several years.

Unicorn offers three different sized units: 47 square meter, 51 square meters, and 61 square meters. Each size equates to a slightly different split of the profits – 68%, 70%, and 75%, respectively – allowing for the differences in size, room rates, and capital investment. Unit prices start at US$268,537 for a 47-square-meter suite. On a per-square-meter basis, that's expensive for an apartment...but not for a hotel room. You have to remember that your hotel room is furnished with high-end furniture, hotel-quality linens (it is a hotel, after all), televisions, and the requisite mini-bar. Also, the hotel itself comes "furnished," as it were, as well, with the lobby, front desk area, phone system, and all the necessary back of house areas for maids and maintenance.

The payment plan of 30% down at signing (remember construction is already under way) and the balance due at completion couldn't be more straightforward. No regular progress payments to have to keep up with.

Once the hotel is up and running, your revenue payments will be made every quarter. It could be the perfect cornerstone for your passive income portfolio. To learn more about the opportunity available at Unicorn, you can inquire here.

***

Kathleen Peddicord's New Book "How To Buy Real Estate Overseas" Available Now Pre-Release!

Kathleen Peddicord's latest book, published by Wiley & Sons, hits bookstores April 8. Starting now, though, you can buy a copy pre-release and save 36% off the release price!

Go here now to place your order for "How To Buy Real Estate Overseas"!

Image credit: Roger Schultz

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What if you didn't get your offshore life organized before the end of 2012? It's not the end of the world for you either.

Setting up a diversified international life isn't a sprint. You don't have to complete it in a few weeks or by a specific date...although some dates are more important than others for specific things.

If you haven't taken your first step offshore yet, let 2013 be your starting point. As I recommended almost a year ago when launching this e-letter service, a bank account is the easiest place to begin. Even though many banks worldwide won't work with Americans any longer and it's harder all the time everywhere for an American to open a bank account, it is still possible. On this front, I do recommend you get moving.

Establishing that first bank account overseas will bring you piece of mind, because it will bring you options. Your bank account overseas could be a place to store some emergency cash, maybe in a different currency, for example.

Opening that first bank account offshore will do something else, as well. It will give you experience and the confidence to take your next steps.

My standby banking jurisdiction for simple and quick is Belize, as it is still possible to open an account in this country without a personal interview. You can simply fax or e-mail your documents. Another good option is First Caribbean, although they've recently implemented a minimum account balance of US$10,000. If your balance falls below that amount, you'll be charged a higher monthly fee. I've given up on Panama banks. If you're persistent, you may be able to open an account at one. Good luck.

Maybe the next step beyond a bank account overseas is a piece of property overseas. Having a place in another country where you could live if you decided you wanted to is a great safety net. Can also be a great vacation option...and an opportunity to generate cash flow. A condo on the beach that can be rented out when you're not using it can fulfill a number of agendas. Or perhaps a 5-acre parcel on a river with a small house fits your plan better. Whatever your ultimate objectives, a piece of property in another country can be a cornerstone to achieving them.

You can find low-cost properties that work for vacation and investment in Belize, Panama, Uruguay, Colombia, the Philippines, to name a few markets I'm focused on. The key is deciding where you personally want to spend time. Don't buy a property somewhere you aren't interested in visiting just because it's cheap. It will end up being the most expensive investment you've ever made.

The other flags--residency, citizenship, investments, asset protection, and, if it applies, business--can follow from there, and they will. Each successive move is easier than the ones before it.

The key is to get started. You have to plant one flag at a time, and each one will take time. So don't worry that you should have done something in 2012 but didn't. Make a move in 2013.

Lief SimonContinue Reading:

  • The Cost Of Living For A Single Retiree In Cuenca, Ecuador
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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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