I feel sorry for the people that get taken by the unscrupulous people in the world that actually plan to swindle people right from the start. It’s one thing for a development to be hit by the financial woes of the rest of the world and fail, while it is quite another to be swindled by people that had that intention from the moment you entered conversation with them. Last year we read about Costa Rica real estate fraud with Paragon Properties out of Florida and the millions of dollars they stole from Costa Rica property investors and now this year we hear about more Costa Rica real estate fraud with Hacienda Matapalo just a few minutes north of Dominical.
As I sit here writing this post I can’t help but wonder what happened to 65 million dollars in “pre-sale” money. The parent company of the project claims they had 65 million in pre-sales as of December 2011 and that construction was moving forward at a brisk pace. They posted a video of the supposed progress they were making on infrastructure for the 600+ acre development about the same time, but shortly thereafter the parent company filed a chapter 11 bankruptcy in Florida and then withdrew it. So what is going on? I assume that the buyers that make up that 65 million in sales (if it is a true number) didn’t put down the full amounts on their purchase but maybe 10% or 20% is a realistic figure. That would make the total amount they took in somewhere between 6.5 and 13 million in deposit money by my estimation. That’s a lot of money!
So where did it all go? It’s pretty obvious they didn’t spend much money on infrastructure as they claim in their video. A quick drive by the place will confirm that. In contrast, we’ve had around 7 million in sales here at Osa Mountain Village in a little less time than Hacienda Matapalo has been on the scene… they started marketing about 1 year earlier than we did. Of that 7 million, a considerable amount is still to be paid by our buyers as we reach certain milestones in the construction of their villa(s). That means we’ve taken in about the same amount of money as Hacienda Matapalo if the 10% figure is accurate.
And what have we accomplished so far?
Well, we’ve completed 22 villas and have another 20 villas under construction, a community center, rancho and bar, a chemical free swimming pool, internal roads and massive drainage systems to steer water away from homes, installed high speed internet, planted acres of food for the community including building goat houses, chicken coops, 2 tilapia ponds, and a large greenhouse. We’ve obtained our license to open as a hotel and our restaurant is open for business and serving up great food.
The point I am making is that a lot can be done with 6.5 million dollars if the intentions of the developers is honest from the onset.
We’ve also finalized the plans for the next phase of the Osa Mountain Village Eco Resort development called Eagle’s Crest which will feature 70 condos with massive views of the Pacific Ocean and Terraba River valley. Deposits are being taken now. $1,000 buys you a place in line to purchase when we release them for sale around Thanksgiving of this year. And get this, the $1,000 deposit can be used immediately towards staying at Osa Mountain Village, tours or anything offered on our websites reservation system. In other words, you can come down to visit next week after making your deposit and spend the entire amount on a vacation stay here and still keep your place in line. It’s absolutely a no-brainer if you plan to visit Costa Rica anytime soon.
If you are looking for property in Costa Rica we have a few suggestions for you to keep you from being swindled by unscrupulous people out to take your money from you.
1) Make sure you see the permits for the project. You would be blown away to know how many developments in Costa Rica start making sales for projects that have not been fully approved yet. The reason being that large projects can take a year or more to get approved. There are approximately 14 different agencies that get involved with approving a project so the process is arduous to say the least and just because one agency has approved the project does not mean they all will.
2) Make sure the development is debt free if you are buying into a future build out. This will limit the number of developments that you can look at, but in the end it will mean that no bank can come along and take the development away from you and the rest of the investors. At worst, you will own land along with other people and can work together to complete the development.
3) Get a lawyer to review all documents, which are often written in Spanish, before you sign them. You might even go so far as to have the documents translated so you can read them yourself. Not all lawyers are honest in Costa Rica either, so being able to personally review final documents in english will make you sleep better at night… and if you read spanish that’s better yet.
These suggestions should help to protect you from real estate fraud in Costa Rica and the thieves whose one goal is to separate you from as much of your hard earned money as they can for as little expense on their part as possible. And lastly, if something doesn’t feel right about the project, listen to your gut instinct and get the hell out of Dodge as the old saying goes. There have been more unscrupulous people start projects in Costa Rica selling the dream lifestyle with no intentions of finishing the development than I care to think about. Some people estimate 30% of the projects in the country are shady… so do your homework, stay alert and visit us at Osa Mountain Village to see how a debt free development is built from the ground up.