Momentum is rising for sustainable development.  There was a record turnout for the three-day Greenbuild Expo, 2008 this past November at The Boston Convention Center in Massachusetts, U.S.A.  Since its 2002 inauguration in Austin, TX, overall attendance has grown exponentially from 4,000 visitors, to 30,000+ at this year’s event.

The world-wide interest in sustainable development was evident in the diversity of visitors (over 85 countries represented), but perhaps more striking was the variety of exhibitors who comprised architects, building owners, code officials, contractors, developers, educators, engineers, government agencies, green power providers, home builders, interior designers, landscape architects, nonprofit organizations, product manufacturers, universities, and urban planners.  Clearly, this is more than general interest—this is a movement.

These innovators are leading the charge to a sustainable future.  Their timing could not be better; population growth and irresponsible development are contributing to the rapid destruction of our ecosystem.  There is increasing awareness of this destabilization, and developers are now successfully creating new models built in harmony with nature while producing economic benefits for their investors.

The Green Building Resource Center (www.globalgreen.org) correctly highlights why a large-scale movement is required to combat the traditional methods of construction:  Typical building construction, use, and demolition, as well as the manufacturing of building materials, contribute significantly to environmental problems. In the United States, buildings account for 36% of total energy use, 65% of electricity consumption, 30% of greenhouse gas emissions, 30% of raw materials use, 30% of waste output, 12% of potable water consumption, and a typical 1,700 sq. ft. wood-frame home requires the equivalent of clear cutting one-acre (4,040 m2) of forest. 

Most of the world is burdened by severe climates requiring developers to face construction challenges. Costa Rica, however, is well positioned for sustainable development by being blessed with a pleasant year-round climate allowing for ultra-green building at much lower costs.  Furthermore, the Costa Rican government is proactive on environmental issues with a goal of achieving carbon neutrality by 2021.  Costa Rica is the world leader protecting over 25% of its land and producing over 90% of its electricity from renewable resources. 

There are several green developers and sustainable communities already in Costa Rica that are displaying a new model to emulate.  “Costa Rica’s strategic location, tropical climate and supportive government give us the opportunity to create the most eco-friendly communities in the world,” proclaimed Charles Gohmann of GreenTowns Latin America (www.GreenTownsLA.com).

Costa Rica uniquely offers political and economic stability, a perfect climate, modern infrastructure, lower construction costs, quality health care, and stunning natural beauty, making it an eco-paradise for sustainable developers, investors, and environmentally-conscious retirees.  Due to the struggling global economy, buying sustainable assets in a country like Costa Rica may prove to be safer than assets in the declining economies of the developed world.  The enthusiasm on display at 2008’s Greenbuild Expo proves that if Costa Rica offers a sustainable model, the world is ready to buy it.  

Investors/Developers/Homebuyers

Real estate investing has become an enormous business all across the world. Millions of people have built small and large fortunes investing and developing real estate. Although most people do not consider themselves to be real estate investors, they still consider their personal residence or vacation home to be an investment. Therefore, it is of utmost importance for all buyers of real estate to understand investment fundamentals of their markets in order to help determine the true value of their purchase.

The recent credit crisis in North America has affected the fundamentals of real estate investing in the United States and elsewhere. The majority of the United States market is plagued by high inventory of homes for sale (high supply), while at the same time lending capital has been drying up (low demand). This supply-and-demand relationship between housing inventory and capital is the primary force behind market cycles. When it comes to real estate markets, the job market is also a powerful force that affects cycles. It has become painfully obvious to everyone in America that they are riding a down-cycle market and many investors have been looking for a destination that offers solid up-cycle market conditions.

Costa Rica offers a prosperous future for savvy real estate investors and regular homebuyers alike. Costa Rica has the perfect fundamentals of an up cycle. Capital is being invested at a blinding pace, demand is exploding, and supply in most areas remains low. The Costa Rican market was once primarily driven by private capital, but recently many institutional lenders have set up shop. Large banks like HSBC and Citibank are now lending to foreigners with competitive terms.

These lenders, and others, have made it possible for demand to grow. As nearly 80 million U.S. baby boomers begin to seek out retirement areas, they quickly realize that the benefits of Costa Rica are unmatched: political and economic stability, wonderful people, perfect climate, low cost of living, quality healthcare, and stunning natural beauty. Furthermore, many Canadians, Europeans, and others are also considering off-shore retirement. They, too, are seeking out foreign locations in less expensive areas like Costa Rica.

Costa Rica is the world leader in land preservation with around 25% of its landmass in reserves. It is also estimated that around 40% of land is not titled, or has clouded title. This essentially leaves only 35% of the country’s landmass available for title ownership. The country’s current population is around 4.5 million people and Costa Rica averages around 2 million visitors each year. These numbers, combined with the staggering number of expected retirees around the globe, make it clear that Costa Rica offers an attractive supply-to-demand ratio for the foreseeable future. In addition, although Costa Rica boasts one of the largest middle classes in Latin America, the local job market has little to do with the overall real estate market because new development is mainly fueled by foreign retirees.

Clearly the most important aspect for an investor is finding the right location. As previously described, location is much more than the street address of the property. Location not only consists of broad market conditions of a country, but also countless details of specific areas. Costa Rica has many beautiful areas to consider; however, they may differ dramatically within the same town! Before investing anywhere, I recommend that you visit the area for at least one week to walk the streets, shop at the stores, and talk to other foreigners. If you can envision yourself retiring to that area, then move forward with finding the right location for your investment.

The preeminent benefit for an experienced real estate investor is that many creative financing techniques also work in Costa Rica. Using options, lease options, seller financing, land splits, joint ventures, coupled with institutional financing can increase leverage and profit potential for investors and developers. Costa Rica also offers such high profit potential because of the lower cost of raw land and construction. Building costs can be as low as $80/sq. ft. for a luxury construction.

There are many profitable investment strategies in Costa Rica, although development and value-added projects are viewed as the most profitable. Building spec homes in predesigned communities or renovating older homes are terrific entry-level investment strategies. It is possible to find wholesale deals on land or older homes for very good prices. The low cost of construction and the high retail value of your finished product to foreign retirees will provide a handsome profit. Although it is a far more complicated value-added strategy, urbanization of raw land can be the most profitable.

Many retirees and casual visitors to Costa Rica prefer more passive investments. To buy-and-hold a premium building lot or an American-style vacation home can also yield a very nice return. There are some who are not quite ready to retire, but they are purchasing a vacation/retirement home. They hire a property manager and rent it out. Buying a home and leasing it out gives the investor title to the home and a safe and relatively headache-free return. Also, some developers will pay up to 15% interest to passive investors. These investment funds are typically secured by a mortgage registered to the property and can be structured a variety of ways.

Costa Rica has been blessed with spectacular natural beauty, and the government works progressively to protect the environment. Responsible developers should always respect the environment when working in Costa Rica, and around the world for that matter. After all, we only have one ecosystem. Whether the development strategy is to build a home or an entire community, there are many “green” techniques that can be implemented for very little extra cost, if any at all. In fact, a “green” approach often can save you money that you never knew you were losing.

Keeping in mind that real estate is still the safest and most profitable investment vehicle, it is essential to invest your capital in up-cycle markets–such as Costa Rica. Although ownership rights in Costa Rica are similar to those you are used to, the laws and bureaucracy create a labyrinth of red tape that must be navigated during a transaction. It is vital to do your due diligence and learn as much as you can before investing in this tropical paradise. Even more important is to have a trustworthy team of professionals assisting you on your deals. Having a good team is important to success anywhere. However, in a foreign country with different laws, a different language, and a different culture, your team can make or break you.

Real estate is a wonderful investment vehicle for many reasons, but using financing, especially creative financing is one of the main reasons for generating eye-popping returns on real estate investments.

Although creative financing is used every day by investors, many home buyers don’t understand the full range of their financing options.

Atenas Home Available - Lease option with 15% down, $1,200 per month $270K

Institutional (bank) financing is rapidly expanding mortgage products to foreigners in Costa Rica. This added capital is a true sign of an up-cycle real estate market, as opposed to the U.S. where housing capital is quickly evaporating. However, the costs of obtaining financing from Costa Rica mortgage lenders can be more expensive.

The more common way buyers find bank financing for a property in Costa Rica is through a low cost HELOC (Home Equity Line of Credit) leveraged to their U.S. property. This is a nice option for some people who wish to split time between Costa Rica and the States. Even real estate investors use the HELOC financing method because appreciation in many parts of Costa Rica outpaces their low financing costs.

In addition, more and more people are discovering that they can roll their retirement funds into self-directed IRAs in order to purchase real estate in Cost Rica. This is a relatively new concept to the IRA industry that offers huge potential for many retirees and investors alike.

Using tax deferred IRA funds for real estate in Costa Rica gives investors opportunities to make double digit returns safely. Investing in tangible assets like real estate is considered far safer than securities markets. It is nearly impossible to find a paper investment in the States that can compete with the returns of up-cycle real estate markets.

Land in Atenas – Lots with seller financing for 30% down, $100K

For the buyers who do not have access to any of these traditional financing methods, creative financing techniques can open doors for you in Costa Rica. Using straight options, lease options, seller financing, private financing, and seller partnering can help you find a great property and investment in Costa Rica.

All sellers have certain financial motivations to sell, however it is more relevant to know their needs in order to negotiate a creative deal. Creative financing terms can be shaped many different ways. You must negotiate down payments, interest rates, monthly payments, term lengths, balloon payments, and legal terms.

Creative deals exist all over Costa Rica. In our area alone, many building lots can be bought with seller financing, there are rent-to-own homes available, seller financed homes, and various properties offered on options. Even more sellers are receptive to these types of offers as along as their needs are met.

Atenas Home – SOLD with Lease Option

Negotiating this type of deal is a delicate procedure when dealing with a seller who doesn’t understand these concepts. There is a tendency to make the purchase sound more complicated than necessary. It is imperative to keep the explanation of the terms as simple as possible for an “all cash” seller.

Using the ultimate form of real estate leverage, creative financing, results in huge cash-on-cash ROIs for investors, and opens doors for buyers with less capital for down payments.

At risk of sounding self-promoting, I will say it is crucial to use a real estate professional who is savvy enough to understand, recognize, explain, negotiate, structure, and protect your interests in a creative offer.

New Home For Sale in Atenas – Seller financing, 15% down, 10% interest, 10 year term, $195K

LEARN MORE – http://www.paradiseprofits.com/products.html

This is a one of a kind property available for sale in the traquil town of Atenas Costa Rica.  The property is perfect for your entire family escaping to paradise.  Located ina private community at the peak of a mounain, the views are positively unmatched anywhere; mountain ranges, volcanoes, Central Valley, and Pacific Ocean views are all terrific from this location.

Atenas is a very desirable town for retirees due to its tranquility, convenient location, and perfect climate. Atenas is located about halfway between San Jose and the Central Pacific beaches, and just 30 minutes to the airport. This quaint town is close enough to the city to be convenient, but far enough away from the hustle and bustle to be clean and peaceful.

Located in Atenas, this Stunning Mountain Top Retreat is truly a rare find anywhere in Costa Rica. The manicured four acres of land is situated on the peak of a mountain in a private gated community. You can enjoy breathtaking sunrises slicing through the mountains, incredible sunsets over the Pacific Ocean and a sea of lights at night in the Central Valley.

The property has five furnished homes, a rancho with a full kitchen, a workshop, and a large storage area plumbed for bathrooms. There are 4 telephone lines, high speed internet, and satellite TV. This property is perfect for a family compound, Bed & Breakfast, or a corporate retreat.

Much expense and brilliant engineering has gone into the retaining walls, drainage system, and walkways. They are designed to withstand all of nature’s forces for eternity. The entire property is surrounded by walls and fencing to ensure privacy and safety.

A full-time gardener/caretaker raises orchids and other beautiful plants and has carefully placed them all over the grounds. The great care and detail in the landscaping is unmatched for a property this large.  The custom pool is heated with solar tubing and perfect to enjoy in this cooler mountain climate.

Wonderful sunsets and sunrises…

Costa Rica’s vast wildlife is welcomed as visitors. Monkeys, sloths, toucans, parrots, deer, and much more make appearances. The natural beauty is unending.  The entire property is fenced in with a controlled access gate at the entrance.  There are 4 active phone lines, high speed internet and satelite TV.   

The mountain top location in a gated community, with four acres, with the best climate in the world, offering priceless views, is a rare find and a solid Costa Rica real estate investment at US$1.1 million. Seller financing is available with 20% down, at 5.5% interest, and amortized for 12 years.  The property is in a corporation for an easy transfer and low closing fees.

  FOR MORE  INFO – http://www.property2.realestatecostarican.com/