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Ecuador Real Estate - Property Listings

Value in Ecuador: Cash in on the sucre’s slide US$1 equals 11,200 sucre (date of issue)
29 July: 1 US Dollar = 11,565.0 Ecuador Sucre 
1 Ecuador Sucre (ECS) = 0.00008647 US Dollar (USD) 

A further slide in the Ecuadorian sucre has created fertile grounds for even greater profits here. When I wrote in IL last month about owning real estate, I explained how the local currency (the sucre) had dropped from 7,000 sucres per dollar to 8,500 and how the slide had created real-estate bargains. 

During the two weeks after I wrote that article, the sucre plummeted even further. At one point, it fell as low as 19,000 to the dollar before settling at about 9,500 right now. 
Real-estate prices seemed to be at rock-bottom levels by any measure before the crash. El Nino, La Nina, problems in exporting bananas to Europe (Ecuador is the world's largest banana exporter), and crashing oil prices (Ecuador is the second-largest exporter of oil in South America) had combined to create a deep depression in the country that made the sucre fall. 

The weak currency, a lack of investors, and the emerging-market slump have pushed interest rates sky-high (75% to borrow sucres, 20% to borrow U.S. dollars).  Many pinched businessmen have been dumping real estate to raise cash. 

Embarrassingly low prices
Now, after the crash, prices are so low that making offers is almost embarrassing. 
What's more, opportunities may get even better! The sucre crash forced all Ecuadorian banks to close for a week. When they reopened, all the bank accounts were under new regulations based on the type of account: checking, savings, or investment.  Holders of checking accounts were able to withdraw only up to 1 million sucres (about $100) plus half the balance of the account. The remaining balance was frozen for one year.  Holders of savings accounts were able to withdraw 5 million sucres ($500) plus half the balance of the account (with the remaining balance frozen for one year). Investment accounts were completely frozen for a year. 

Most Ecuadorian property owners are not able to understand what's going on or to keep track of the sudden currency shifts. There is a severe shortage of cash, and the banking firm Lehman Brothers (which is a consultant to Ecuador's Fondo Monetario Internacional, or FMI—the country’s international monetary fund) predicts that the government's handling of this crisis will create an even deeper recession. Together, these events have created such bargains that an agile investor is almost certain to succeed. 

Extra value in Quito
For example, one reader (at our suggestion) had already decided to buy a condo in the capital city of Quito for $21,000. This was a bargain of a lifetime: a tidy and comfortable little 700-square-foot, two-bedroom apartment in the center of town. It sits amid luxury shopping and fabulous restaurants and is near the best hotels and all the downtown businesses. In fact, it’s in the very heart of the business district and was worth perhaps double (or even triple) the price, but the owner desperately needed cash and was willing to sell cheaply. Yet the buyer got an even better deal! 

This reader had contracted to buy the property in sucres (worth 7,000 to the dollar). He put $3,000 down and owed a balance of $18,000 (or 126 million sucres), due in a month.  Then the sucre crashed! When the reader exchanged his dollars for 126 million sucres, it cost him only $15,000 (instead of $18,000).  He reduced his extremely low buying price by another $3,000 in just over a week! 

Does $21,000 for a city-center condo sound cheap? Believe it or not, there are even better deals. Consider, for example, a two-story, two-bedroom, two-bath house just 30 yards from the Pacific Ocean and listed by broker Gustavo Hernandez. The 2,200-square-foot house is a fixer-upper and sits on a 3,300-square-foot lot 20 minutes from the city of Portoviejo (capital of the province of Manabi) and also just 20 minutes from the quaint fishing village of Bahia. The house has water, electricity, and telephone service. The list price was only $12,000, but when we asked if this was a “good price,” the owner dropped it to $9,000. We didn’t bargain at all. 

Affordable coastal finds
We have just started exploring coastal real estate again, but we’ve found very low prices on all varieties of properties. If, for example, you’d prefer building a new house (instead of fixing up an old one), you might consider the Le Jardin development in the Bahia area, which is offered by Bahia de Caraquez and has 18 lots right on the beach. This is a fully completed, gated community with cobblestone roads (all the way to the beach), a water treatment plant, footpaths, and security.  The community center has a swimming pool, tennis courts, sauna, and gardens overlooking the sea.  All facilities are in place including water, telephone, and cable TV hookups, yet lots are only about $30,000 (and that’s the asking price). 

On previous expeditions to hunt for coastal land, we’ve found individual beachfront lots for much less (as low $3,000 for small, privately owned, undeveloped ones). 

Prices for new beach houses have also plummeted. I talked to Alfredo Baquerizo of Corporacion Olimpus—a large developer, referred to me by my banker—about what his firm has on offer. He offered some attractive options: There are four brand-new houses in the area of Punta Blanca (a popular new beach resort in the state of Guayas) offered at only $40,000. 

Alfredo says that even better prices exist for people willing to risk buying houses from plans. His firm has several developments prepared for construction to begin or already partially complete, but because of increased financing costs, the firm cannot move forward without preselling the homes.

One example of that is the Las Arenas community residence in Salinas. This is Ecuador’s premier seaside resort. The Salinas Yacht Club is one of the poshest clubs of its type in the Pacific. The Las Arenas condos are in an exclusive park where there are nice green areas with swimming pools for adults and children, green areas, a bar, a barbecue, a Jacuzzi, and a volleyball court. Each 1,100-square-foot unit has a master bedroom with a private bath, a second bedroom and second bath, a fully equipped kitchen, a dining area, a large covered porch, closets, and a storage area for an asking price of only $39,550. Just $11,865 down is required, and financing is available up to 10 years. The semiannual payments are $2,613.27, but the 14 percent per annum due is not a good deal if you have cash. 

Big hotel opportunities
Big real-estate projects are even better. Olimpus has numerous opportunities, including one of the few hotel sites licensed for the Galapagos. It is looking for investors to partner in a joint venture for this hotel. At this time of economic crunch, such hotel projects offer enormous opportunity.  One reader who visited us last month was offered an outstanding deal to take part ownership in one of the nicest small hotels we’ve stayed in in Quito. The owner has been successfully running the hotel for years and had started adding a second wing. Basic construction is complete; just walls and interiors are lacking.  But the sucre crash ran the owner out of cash, so the offering price for the partnership was ridiculously low. (Gus Hernandez is the broker.)

Whether you are looking for a business deal, a city condo, a large farm, or just a house on the beach, you'll rarely find lower prices. There are, of course, risks and other considerations to take into account. The recession could become so severe that civil unrest develops, and money could be tied up in banks even longer than a year. (Another crunch could arise when the frozen accounts become available next year.) 

In addition, finding real estate is not as easy in Ecuador as in more developed nations. There are no multiple listings. Many properties for sale are not listed. Almost everything that is listed is described in Spanish. And the prices start to rise when North Americans show up. 

There is a multitude of red tape. And the buying system here is based on the civil code, which makes it considerably different than the system you find in North America. Buyers have to be persistent, patient, and tough. Remember, when the great opportunities are available, circumstances often look bleak. The weakhearted and the worriers should look elsewhere.

Legal advice
You should also have a good attorney to look after you.  On this subject, we just concluded a tour through the South here and met with Elena Arias, who gave one of the clearest explanations (in English) of how to live, buy real estate, and do business in Ecuador I have heard yet. She lives in Guayaquil near the coast and can help on the legal end for those interested in buying coastal property. 

In my opinion, the opportunities right now in Ecuador are great. Here, just four hours from Miami, is a paradise of wonderfully fresh foods, a delightful climate, low crime, exotic varieties of sights and sounds, and warm, friendly, tolerant people. These factors will hold Ecuador's society together. I believe that the country will peacefully work through its problems and that the economy will improve once again. For now, however, this paradise is available at prices we have not seen in years.  Ecuador offers value for money we may never see again. 

Contacts

l Gustavo Hernandez; tel. (593)2-540-702
l Bahia de Caraquez; tel. (593)2-691-131 or 2-690-215
l Alfredo Baquerizo, Corporacion Olimpus; tel. (593)4-680-900, fax 4-680-696, E-mail: alfredo@corpolimpus.com, Web site:  www.corpolimpus 
l Elena Arias, Attorney at Law; tel. (593)4-830-767, fax: 4-834-068, E -mail: earias@gu.pro.ec

While we were looking for investment opportunities in Ecuador, Merri and I learned that the healing ways of the indigenous people, born of an ancient Incan culture, created extraordinary longevity. One researcher found that nine residents per hundred lived to be 100 years old or older in one of Ecuador’s valleys. (In the United States, by comparison, three residents per 100,000 live to be 100 years old.) 

Foundations of wealth
I believe good health and longevity to be the foundations of solid wealth. That’s why Merri and I started to explore this culture in more detail. We met and have become close friends with Don Alberto Taxco, the well-respected leader of the Andeans (a lecturer at the United Nations, a holder of the Shamanic Council’s Force of Great Light, the subject of a Paramount Pictures documentary, and a well-known author and philosopher). You’ll meet him if you travel with me on IL’s Discovery Tour to Ecuador this summer.

The ancient knowledge of the Incas has been passed down for centuries through word-of-mouth and is rich in mythology, wisdom, and mysticism. Today, the yachaks (philosophers and healers) are revealing secrets that had been kept hidden for 500 years. There are sacred valleys where no commoner (European or Ecuadorian) had until recently been invited. They have been protected by ancient legends of curses and mystery. My wife and I were honored to be in the first small group of outsiders invited by Don Alberto to visit one such valley, hidden deep in the Amazon Basin. The experience was an adventurous but quiet, peaceful, and deeply spiritual one. 

An Andean retreat
It has led to our developing with Don Alberto an Andean educational and cultural center on our 850-acre plantation five miles north of the equator, deep in the Andes. The center will provide simple living where both the air and the water are pure. We’ll have a plantation on the property to grow organic produce, and you’ll have the opportunity to enjoy Incan purification and rejuvenation treatments. 

We’re also developing conference facilities so seminars can be conducted in this stress-free, relaxing environment. Those interested in visiting, living there, conducting seminars, celebrating the beginning of the new millennium with us, or taking rejuvenation treatments at the center, should contact Gary and Merri Scott, International Service Center, 3106 Tamiami Trail North, Naples, FL 34103. 

For information about exploring Ecuador with me on IL’s Discovery Tour there August 14-21, call IL Discovery Tours; tel. (800)926-6575 or (561)243-6276.
 

During the last two weeks, we’ve been getting an exercise in what the first months of a Y2K crisis might be like. In the wake of the collapse of the sucre, the president declared a state of emergency. Banks were closed and there was no gas. Our monastery project with Don Alberto took a bite on this one, but I think we'll make it up having money here because opportunities are popping up everywhere. 
Now demonstrations have begun. Peaceful, but creating a bit of a mess. The Ecuadorans are like the French. When they are upset, they block all the roads. We needed to get to our hotel in Quito, so we left Quilajalo at 5:00 a.m. this morning, hoping to catch the blockaders asleep. No such luck. The hour-and-a-half trip took over five-and-a-half hours. 

Smiling, cajoling, and 50 cents
Don Alberto knows all the back roads, but even before we were a mile from his village, there were bad signs. First, large rocks in the middle of the road. Then,  smoldering stumps. In Salcedo, we encountered our first roadblock. Flames and smoke were rising through the mist. Men huddled in the dark, their unshaven faces flickering in the smoky flames sent up from burning tires. Today it was the taxi drivers protesting over gas prices that had risen to two-and-a-half times their normal level. Tomorrow the farmers will be out. 
But Ecuador is such a peaceful place, we never felt a threat. There simply is no aggression. The blockades were totally benign. The drivers did not try to force the blockades, and those blocking the roads showed no ill will or animosity. 

Don Alberto was a miracle. He stopped at each roadblock. In many places he was recognized, and we passed right through. At other spots he talked and cajoled, and we were let through. At still other places we paid off the blockers, and we were let through. (There were two types of blockers: the serious taxi drivers who would not budge, and the others. For 5,000 sucres (about 50 cents) they let us through.) 

Crisis or party
To all, the scene was more like a party than a crisis—people were laughing, waving, and having lots of fun. There was nothing ugly except the Pan American highway, which was closed down completely. That road was littered with trees, stumps, wire, burning tires, and huge stones. 

The highway was eerily deserted, and we felt like the first ones out after Armagedon. The only reason we were on the road at all is because of Don Alberto's skill in handling people and his deep knowledge of the area. Mostly we rode on the old Incan Trail, all dirt, mud and full of potholes...long neglected but perfectly good, a road build centuries ago. Little more than a cobblestone trail, it allowed us to slip through. We were on back streets, weaving, twisting, turning and a couple of times cutting through gardens and football fields. At one point we drove wrong way down the major freeway in Quito, twice passed the police, but they only waved. 
This is many ways was one of our most revealing trips. We saw places we'd never seen and uncovered the inner city, seeing the guts of what makes this place: green, fruit-laden back gardens and everywhere, happy, smiling people—even though today they walked. Pickups were loaded with dozens of residents. No driver passed a walker by if he had space. Amigos everywhere, ready to direct, guide, and give little clues about how to carry on. A national emergency played in the atmosphere of a fiesta.