An Interview with Author Jeffrey Hickcox

How did you get started in real estate?

When the burst of the dot com occurred in the stock market, and respected companies like Tyco, WorldCom, Enron and others lied on their balance sheets about their financial strength, I began to lose trust in the equities markets. After all, what good is learning to read a balance sheet if the companies are reporting false numbers? During this time I realized that it was safer to invest in more tangible assets where direct value added can contribute to the success of the investment. Coincidentally, the real estate market in the United States was just beginning to heat up.

Why did you pick Costa Rica for your next real estate market?

The real estate market in the United States is primarily driven by lending capital and the job market. In 2005 I began to notice both of these fundamentals were beginning to weaken, and as a result I realized that the real estate market would face a downturn. I immediately stopped purchasing real estate in the United States and began to look for a more stable market to apply my knowledge. Furthermore, my family and I were looking to experience a more fulfilling lifestyle than the suburban rat race in the U.S.

Most importantly, Costa Rica offered all of the benefits that we were looking for as a family: a great year-round climate, political and economic stability, lower cost of living, high-quality healthcare, close proximity to the United States, stunning natural beauty, and a warm inviting culture. These unique benefits made me realize that many more people would also be attracted to Costa Rica.

Why is Costa Rica a great place for real estate investing?

The real estate market in Costa Rica is primarily driven by private capital and therefore does not rely on institutional banks. An estimated 90% of real estate purchases are made with cash or private financing. Furthermore, the cost of land and construction is substantially lower than the United States, which translates into higher profits and safer projects. Ultimately, though, it is the relationship between the high demand created by the marvelous appeal of Costa Rica and the relatively low supply of quality homes that continues to give strength to the real estate market.

What research did you do to compile the information in your book?

Before I moved to Costa Rica, I spent two years reading every book I could find about Costa Rica, from legal guides to real estate books to books on the culture. Once on the ground, I immediately partnered with a real estate firm in order to intimately learn values and the real estate purchase process. There is nothing more important to a real estate investor than learning real values and the desires of buyers.

Only when I began to establish a true sense of values did the real learning process begin in the form of hands-on development projects. There had to be market studies, planning, permitting, surveying, contracting, building, networking and selling that had to be mastered in order to complete a successful project. This gathered knowledge, combined with the expertise of the brilliant contributors, makes the book a comprehensive step-by-step guide to investing in Costa Rica.

Who do you think will benefit most from your book?

Anyone who is interested in purchasing property in Costa Rica will benefit from this book. The book has a general description of Costa Rica and the basic details of the real estate market, laws, and the purchase process, which is of great value to the common buyer. However, the majority of the content is geared toward investing in, and the development of, Costa Rica real estate. Ultimately, the person who will benefit the most from reading this book are readers who want to make money investing in a desirable real estate market.

How long did it take for you to develop your network of partners, and how did you select the people or companies that you did?

That process began on day one, and we are continuing to add network partners still today. In Costa Rica, clients expect you to be able to coordinate the entire country for them, which is impossible to do without qualified network partners. Finding a good team of professionals can be quite difficult in a foreign country with loose regulations. First, I look for a true professional who runs a full-time business in a needed field. Then I verify the quality of their work and the content of their character. When I find a person that fits my criteria, we then develop a professional relationship.

How do you think this current economic market will affect the Costa Rican real estate market?

When I arrived in 2006, development was booming and capital was everywhere. Certainly, the collapse of the global financial system has slowed some of the speculation in Costa Rica. However, due to the expected explosion of foreign retirees seeking a less expensive and more tranquil lifestyle, prices and end-user demand continue to remain stable. Since there is currently an inadequate supply of quality homes, and construction costs remain much lower than in North America, Costa Rica offers a tremendous opportunity for short-term profits and long-term appreciation despite the growing economic problems around the world.

What investment decisions should people make with this current economic market?

It is precisely because of the global economic downturn that it is more important than ever for investors to do their due diligence and to choose their assets and locations wisely. By definition, a developing country is one of growth and opportunity. The key is to invest in a developing country that is economically and politically stable-like Costa Rica. Costa Rica has the largest middle class in Latin America, some of the best social structures on the planet, and is a very welcoming culture to foreigners. Whether an investor chooses Costa Rica or not, they should look for foreign assets in stable, developing countries.

What investment strategies would you recommend in a down-cycle real estate market?

Pure real estate speculation is all but over in this economic climate. One must carefully choose an investment area that will have appeal to their targeted end users. Once the area is chosen, value-added strategies like building or remodeling homes or beautifying and bringing infrastructure to raw land will provide the safest strategies for investors.

What advice would you give to someone who is uncomfortable investing in the stock market?

Invest in tangible assets. Whether that is precious metals, commodities, currencies, or real estate is up to the individual investor's tastes. I like all of the above, but real estate is the only vehicle where one can directly add value to their investment.

What advice would you give to someone who was thinking of retiring abroad?

Planning for retirement begins with the individual visualizing the type of lifestyle they wish to lead in retirement. When retirees determine that they desire a lifestyle of new experiences on a more comfortable budget, then retiring abroad will appear to be the obvious option for them. Next, they should rank what they value in a prospective country: climate, healthcare services, cost of living, shopping and recreation, access to their families, etc. From there, I advise that they engage in extensive research to educate themselves about what foreign opportunities are available.

What sources of information exist on Costa Rican real estate and why is your book a better source of information?

There are a number of resources with Costa Rica real estate information, from Web sites to other books. I would never suggest that my book is better than anything else on the market because I believe anyone interested in making the leap to a foreign country must learn all they can from as many sources as possible. I would suggest, however, that my book is unique because of its focus on the financing of, investing in, and development of real estate in Costa Rica. I wholeheartedly recommend that my readers also read The Legal Guide to Costa Rica, How to Buy Costa Rica Real Estate Without Losing Your Camisa, and any of the cultural books on Costa Rica. These other books will only help them when they begin to tackle the intricacies of investing in Costa Rica real estate.

How do people typically find out more information on real estate investing in Costa Rica? What channels already exist, and what do you offer to make this simpler?

The Internet is overflowing with Costa Rica real estate information-and that is the problem. Most Web sites contain solid information and most professionals are honest operators, but one must be careful to avoid the many faulty claims and real estate scams that do exist. Our goal, through our book and Web site www.ParadiseProfits.com, is to educate people about investing in Costa Rica, and to guide our readers through the process of due diligence.