Fire Sale

Fire Sale

In the current global climate, crisis real estate investment opportunities are crossing my desk regularly. One forwarded yesterday by a colleague in Nicaragua got my attention.

My colleague has a friend. The friend owns some lots in Nicaragua that he wants to sell. Quick. He’s offering a cash buyer such a tremendous discount from his original purchase price for the lots that, in fact, I am tempted to jump myself.

The deal is simple. The owner has six lots. Five are about 3/4 acre each; the sixth is about 2 1/2 acres. He paid a total of US$540,000 for the six lots about three years ago. Right now, he’s willing to sell them as a package for US$245,000. Less than half what he paid.

Why would someone do this? It’s no big mystery. The seller needs cash. We can all sympathize, I’d say. We all find ourselves in this position from time to time. It’s not that he wants out of the market. In fact, he’d rather not sell, as he had development plans. His idea was to develop the large lot into 8 to 12 condos.

The properties are on the rim of the Laguna de Apoyo near Granada. They sit about 2 miles from the main Granada-Masaya paved highway and can be accessed easily from the highway, from Granada, and from the road that leads to the lakeshore on the south side of Lake Apoyo.

Water and electricity run by the property and are ready to be connected. The seller has a title insurance policy already in place for all the lots.

I’m not going to try to sell you on Nicaragua or on Granada or on Lake Apoyo. If you’re interested in the market in this part of the world, you already know the selling points. I’m simply going to state the obvious: A 55% discount off purchase price for this land is a great buy. This qualifies as a legitimate crisis investing opportunity.

This works out to approximately US$9 per square meter. This is an excellent price compared both with serviced lots in other parts of Nicaragua and with the price of raw land in other expat destinations in Central America.

The upside is there. As is the country risk of Nicaragua. I believe the current down situation in this country will pass. Take advantage of this opportunity, which amounts to a crisis investing fire sale, and, when the local political risks have subsided, you’ll be positioned to benefit from the appreciation that should follow.

Lief Simon

P.S. This qualifies in my mind as an “in the market” opportunity–a great deal for someone paying attention to a particular market and ready to act.

Being “in the market” means, simply, that you’ve built a network of in-country contacts and resources who know to send you details of opportunities when they arise.

Not every one will appeal or make sense within the context of your current circumstances or overall investment portfolio. But every now and then, the right opportunity will come knocking. It doesn’t take that many…


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