Category Archive

It’s nearly a year that we’ve lived in Buenos Aires. A whole hell of a lot has happened and we don’t even know where to begin… But, we’re not going to get into all that right now anyway… Instead, we’d like to shamelessly self-promote a project that we’re involved in.

If you can read Spanish and would like to know what’s going on in Latin American and world financial markets then be sure to check out this free daily email newsletter at: http://moneyweekes.com/

Here are some of the latest articles:

Baja de Tasas, Sólo un Remiendo

Más Acerca de por qué el Sector Inmobiliario Mexicano es Prometedor

¿Cuál Será la Suerte del Dólar?

Semana Negra…¿Hay una Luz al Final del Túnel?

Saludos!

Much more to come as we approach our one-year in Argentina anniversary…

Despite the high profile robbery of Francis Ford Coppola’s petit-hotel in Palermo Viejo (Soho) two weeks ago, the area is nevertheless booming…

This weekend the weather was absolutely gorgeous and the streets of this small area of Palermo were packed with tourists, hipsters, regular ol’ Portenos, your editor, and his beautiful wife. The area has it’s detractors, but we’re not drinking the haterade…

No, Palermo Viejo is probably the most appealing neighborhood in Buenos Aires. Plaza Serrano, the hub of this little sub-barrio, can get old quickly, as it tends to get too busy, too touristy. But you can easily avoid it and enjoy the boutiques, the wares of the street-vendors, the bars, restaurants, and charm of the surrounding streets.

With the lower building heights, usually no more than three stories, the place just gets more light… it also allows for car pollution to escape more easily…

We’ve sometimes hesitated to give Palermo Viejo much acknowledgement in this blog because it feels like kind of a cop-out… The neighborhood has too many foreigners… It’s too gentrified… That may be true, but, those factors can also make the place more appealing. To each his own we say.

But if I were to place a bet on a neighborhood, we’d put our money there… but it can be tricky as there’s little for sale, plenty for rent, but little for sale… But we’ve seen some deals around.

Especially if there’s a dip in the economy here after the election, we’d watch this area like a hawk for any good deals…

If you’ve been thinking about visiting Argentina… If you want to experience the vibrant culture, the friendly people, the opportunities, the beautiful and diverse landscapes… then you won’t want to miss this tour organized by my friends at Agora Travel this November 3rd-16th.

This tour is unique and exclusive (only 16 people) as it is done with a private chartered plane, so, you can travel quickly, comfortably, and hassle-free around Argentina, covering more destinations than you could with traditional airlines (especially Aerolinas Argentinas!).

The tour is also interesting in that it is oriented towards investment opportunities around the country: apartments in Buenos Aires, developments, vineyard and forestry projects, and rural estancias …

Over the years Agora Travel has established some excellent contacts in Argentina. This tour gives you access to those trustworthy and knowledgeable professionals, which is extremely important for you to be able to invest with confidence…

The investment aspects aside, the tour covers some of the most enchanting locations in Argentina: Buenos Aires… Bariloche… Mendoza… Salta (pictured above)… Misiones… the Iguazu Falls…

Basically this is a trip of a lifetime, a chance to explore the best that a beautiful country has to offer…

Click here to get all the details: http://www.agoratravel.com/investsouthamerica/wb/

FYI: We’ll be speaking to the people on this tour in Buenos Aires. We don’t know what we’ll say but, we’ll do our best to offer some interesting “off-the-blog” insights to Buenos Aires and Argentina, what we don’t want everyone to know about…

We’ve been working and traveling heavily of late… which has cut down significantly on our posting… But we’re going to fight this trend and do our best to start posting regularly again.

We enjoyed our trip to North Carolina, it was familiar, easy, and relaxing… plus great to see friends…

But we’re happy to be back in Buenos Aires… where we have to stay on our toes in terms of the language, of course, but also in terms of opportunity… We met a guy at the wedding in North Carolina who had just returned from Argentina. He was extremely bullish and excited about our new home country… Evidently his business mentor told him, “if I were a young man, I’d move down here immediately”. He was trying to figure out how to persuade his wife to move the family (three kids) down… We, of course, identify with his enthusiasm. But we didn’t do him any favors when we accidently dropped the bomb on his wife by saying, “So, you’re planning to move to Buenos Aires?” “No.” was the abrupt reply… That little faux pas probably set him back a couple weeks in his plans, but, he still seemed confident that he could persuade her…

There are opportunities out-the-whazoo here. A couple of Americans recently opened The California Burrito Company on Lavalle in el Centro. When we went there the place was packed, business looked brisk, and the burritos were tasty… We’ve met a number of foreigners and Argentines involved in real estate, and the opportunities in this arena are virtually endless. There are places in Argentina where land is selling for less than $5 an acre…

We must admit to you dear reader, that we’ve been a bit tight-lipped about some things because we don’t want everyone to know about these opportunities… For that we apologize, but we’ll reveal all, or nearly all, in due course… Also, we don’t want to mislead you. As one Argentine friend said, “Argentina has opportunities, but it’s opportunity from crisis. Don’t forget that.”

We’re working with our Argentine financial writers, as that’s our biz, to prepare a report about what to expect in the markets around here in the short, mid, and long term. There’s anxiety here on the eve of the presidential elections, and certainly some pessimism. There’s inflation no doubt. Will it expand? Contract? What’s going to happen…? We don’t know any better than anyone else. But we won’t let that stop us from making some predictions…

Hasta la proxima.

One of our contacts here is a New Zealander involved in real estate. He reports to us that there is a phenomenon of Kiwi farmers selling off their farms in New Zealand and relocating to take-up farming in South America where the costs of land, labor, and expenses are lower.

One favored location is Uruguay. There are evidently quite a few farms for sale in Uruguay for reasonable prices. So, these Kiwi farmers relocate with their families, selling off the pricey New Zealand land and buying a functioning farm down here.

New Zealand agriculture is highly sophisticated, primarily because the government lifted all subsidies for farming and agricultural products, so Kiwi farmers were forced to compete on the world market. What happened was that they did exactly what people have to do when competing in a free-market… they worked hard, they innovated, they were efficient… or they went out of business. The result was, predictably, that New Zealand is now a world leader in agriculture, having pioneered some highly successful methods of farming…

Could there be a lesson here for other countries? In the United States big-farm subsidies have lowered prices for junk food and for food additives like high-fruitose corn syrup, which have made these items ubiquitous in the American food supply… And we would wager that this is a major contributing factor for the expanding waist-lines of the American public. A big conspiracy no doubt, no pun intended… But, this is all fodder for another post, let me get back to those innovative Kiwis and their new farms in Uruguay…

So, when the New Zealanders relocate to South America they find themselves in the midst of a new and different culture of course. One issue that our acquaintance had noted was that if a Kiwi woman worked on the farm as Kiwi women are prone to do, they find themselves sometimes ostracized by Uruguayan women who wouldn’t be caught dead socializing with someone who does manual labor, let alone do manual labor themselves…

So, this culture clash can sometimes be an issue for these immigrants from down under. One could cry foul at the lack of ‘progressiveness’ amongst these Uruguayans, but that would be a waste of time… Instead these Kiwis have opted not to stray too far from the major cities, Montevideo, Colonia, Punta del Este etc so that they can go into these cities to satisfy their social inclinations… and as long as they get a good manicure before going to any parties… no one will be the wiser that they may have sweated during the week.

Anyway, we hear that the fancy farming techniques of the New Zealanders are paying off. They are grabbing market share for certain agricultural products. This spells trouble for inefficient and mismanaged farms in the area… and could create some resentment. We, on the other hand, praise these innovations and efficiencies born of the free-market and hope that this wacky idea spreads in South America and the rest of the world.

We’ve written before about the perplexities of San Telmo… and during our time in BA we’ve visited there quite a few times, and we’ve talked to quite a few who’ve lived there… (we’re by no means experts, and as always, we won’t let that stop us from pontificating) but we still have no resolution on our feelings about the place.

Readers have asked about the barrio, and because of our own secret fascination, we feel compelled to continue ruminating about it…

What we can say is that it feels on the verge of gentrification, but it’s certainly not there yet for better or worse. It’s rumored to have the largest expat community in Buenos Aires, but we have no confirmation of that theory. We believe Palmero Viejo may out-edge San Telmo in density if not number of foreigners, but we have no evidence for that estimate either.

Real estate prices, though lower than the more established barrios of Palermo, Recoleta, Puerto Madera etc, do take into account the interest of expat investors. So it ain’t dirt cheap for BA, as it once was, but certainly cheap by world standards…

Now most Argentines we’ve talked to about San Telmo practically despise the place… they wouldn’t touch it with a ten-foot pole… “It’s dangerous.” “It’s a good couple degrees colder than the other barrios.” “It’s dirty and full of poor people.” etc. Now, we’re doubtful of the temperature claim, but, in general it is pretty dirty, the people are poorer than the more upper-crust sides of town, and it does seem more dangerous, (yet we rarely hear of much happening there)…

We’ve gone there a couple times when we’ve looked around and just wanted to get the hell out. It looks really dingy. There are a bunch of sketchy looking dirt-bags hanging around… The ugly buildings that are unfortunately ubiquitous amongst the nicer ones seem to stick out to us. The shops only seem to have a bunch of useless junk. “Ugh. Take me back to Recoleta!”

But, other times we go there (the Sunday market is nice, when not too crowded) and we are really impressed. The architecture of the nice buildings just seems to stick-out to us. All the funky little shops seem so authentic, yet hip. There’s art and bohemian flavor in the air.  “This is the real Buenos Aires!” we think.

The Dr. Jekyl and Mr. Hyde phenomenon in San Telmo is pervasive for us. We never know what we’re going to get when we go…

So dear readers we leave it to you. It depends on your taste. We’re not making a move to San Telmo any time soon. But we may well be jealous if you do…

We recently gave you a list of online resources for finding property in Buenos Aires. One of those resources is the Argentine MLS website. There’s a trick you can do to use that MLS website to quickly find additional information on any property that you might see elsewhere… This is simple but it might not be obvious.

Any listing that’s in the Argentine MLS has a code, a ‘codigo’. All of the Argentine MLS listings URLs are, for example, as follows: http://www.topinmobiliario.com/detalle.aspx?findcod=LLC797 

 What you can do is slap on the ‘codigo’ that you find on any other website for a property that you’re interested in and add it to the end of the typical listing URL: http://www.topinmobiliario.com/detalle.aspx?findcod=(put code here)

So if you find something on this list for instance: http://www.leporepropiedades.com.ar/SOM/vta_casas.htm

They all have a codigo (to the far right of the list), so you can plug that codigo on the end of the typical MLS URL to find more info on the listing (you can do this more conventially on the MLS website, but I prefer doing it this way) for example: SH11207

http://www.topinmobiliario.com/detalle.aspx?findcod=SH11207

Then you go straight to the listing and can get all the details on it and usually pictures as well… You can do the same thing for any ‘codigos’ that you find on any real estate websites… Doing this you can move quickly and easily through the listings.

Hope you find this helpful…

Cheers!

For those of you readers interested in BA property we decided it would be a good idea to put together a quick reference ‘cheat-sheet’ for how to find properties in the city… so here are some of the best links for doing that…

To orientate yourself, this is great map of the city (you can plug in any address to find the location): http://mapa.buenosaires.gov.ar/sig/index.phtml

This website features the Multi-Listing Service (MLS) of Argentine property: http://www.topinmobiliario.com/

The problem is that many properties are not added to the MLS. So here are some of the top sites and agencies for the more popular areas (most have listings across the city):

Recoleta
http://www.realestate.com.ar (Probably the best agency in BA)
http://www.toribioachaval.com.ar/

Palermo
http://ojopropiedades.com.ar/
http://www.shenk.com.ar/
http://fastpropiedades.com/
http://www.enbuenosaires.com/

San Telmo
http://www.leticiafirpo.com/venta.php?criterio=precio

This is a good list of available ‘casas’ across the city: http://www.leporepropiedades.com.ar/SOM/vta_casas.htm

Buenos Aires Craigslist has many interesting and new listings. If you have some Spanish language knowledge La Nacion classifieds  and the Clarin classifieds are good.

A recommended resource is the Argentina: Owner’s Manual from International Living. 

Good luck!

An American friend who’s been living down here for three years was telling us some investor horror stories the other day…

One was about a new apartment building in Belgrano where the developers sold each apartment twice pre-construction, then skipped town… That was a year ago and the place is tied up in intense litigation and probably will never be finished…

While Argentina has great value in real estate, like any place, there is risk involved. You’ve got to do your homework. Make sure you’re dealing with reputable people…

I’ve recommended the Argentina Owner’s Manual in the past and continue to do so, as it’s a great way to instantly get reputable contacts in the country… Just because people speak good english does not mean that they necessarily share your business values…

 That said, our experience here has been a very good one. The more time we spend in Argentina the more we like it.

Yesterday we got to tag-along with a friend to visit a farm just outside Buenos Aires. It was about an hour and half from downtown, north of Pilar in an area called Cordales. This is farm country that is unfortunately being developed into gated communities. But, for it’s proximity to BA, it was surprising rural, with one attractive horse farm after another and few developments. Our friend, who had business there, invited us, as he knew we were curious about the land out of the city.

It was a lot like parts of northern Texas… pretty country…

We saw a lot of ‘for sale’ signs in the area. Evidently, land there goes for about $20,000-$25,000 per hectare. A hectare is about two and a half acres…. So, it’s not dirt-cheap. But, it was nice and the proximity to the big city is a real plus.

When we first left Florida for Buenos Aires the real estate bubble had just burst… or, maybe it had popped months earlier, but people were only then realizing it… Now it continues to slide. Many of the bright red ‘for sale’ signs have faded to a pink in the Florida sun…

Most people we know are pretty savvy real estate investors (or savvy enough not to be real estate investors at that time). They weren’t really effected too much by this, but we’ve heard of some people in serious trouble… who bought way more than they could possibly afford. When the market went south, these people were caught with massive mortgage payments and negative equity.

The Buenos Aires market is humming with little or no credit. That was the problem with much of the US boom is that it was funded by creative and risky mortgages. So, there’s a theory among real estate speculators in BA, that when the Argentine banks do offer mortgages (and they’re supposed to in the near future) that BA real estate will really take off.

The BA market is still cheap relative to other major world cities… It’s this perceived value that’s driving the market. However, as prices continue to rise, they’ll reach a point when this value no longer exists in the eyes of buyers (other than the speculators) then price increases will slow, stop, or fall… As we expats and Portenos enjoy this boom, we need to keep our eyes out for that time. It may well be a long way off, but you never know…

We have a friend who’s buying an apartment here in BA. He let us tag along throughout the process… which allows us to give you a simplified overview of how it works…

We learned about the three main stages in the buying process… the Reserva, the Boleto, and the Title Deed.

The Reserva is pretty much like going under contract in the US. It’s making an offer and putting a token amount down to engage the seller.

Next is the Boleto, which is typically a few weeks after the Reserva is signed. At this stage the buyer forks over around 30% of the purchase price. And the Seller hands over all the title documents to the buyer’s Notary.

Now, there really isn’t any title insurance here in Argentina, like we have in the US. The Notary is your title insurance, so, you want someone with a great reputation.

The Boleto itself is a bill of sale, that outlines the specific terms of the transaction. Once signed it binds the buyer legally to the property. The seller can’t back-out at this point.

Then, at the Title Deed stage, the buyer pays the balance of the sale price and the seller signs the deed over to the buyer…

Now, as a foreign buyer, the trickiest part is getting the money for each of these stages.

As we understand it, there are three main ways of doing this and many variations… You can:

• Make a wire transfer from your bank to a bank in Argentina (or sometimes via Uruguay) then the bank gives you cash, that you give to the seller. This is done in a secure location, and you basically push the cash across the table and the seller counts it… (costs about 2.5%)
• Buy Argentine bonds and then turn them into cash, or transfer ownership to the seller. (costs about 1%)
• Transfer money from your account in the US, to the seller’s account in the US. (costs about 1%)

The first method is the most common. The last two are more sophisticated and require a more sophisticated and cooperative seller. Also, these methods are not necessarily recognized by the Argentine government.

Tax-avoidance is much more commonplace here than what we’re used to. When you buy, there’s typically a difference between the actual sale price and the reported sale price, so that the seller can avoid some tax. And as the buyer you can avoid some too. 

There’s some ‘black money’ in the transaction when this is the case, which complicates matters slightly. This practice, while still common, is being increasingly scrutinzed by Argentine tax authorities…

Above all, the most important thing is to have good people helping you through this. A good lawyer to represent you and help you get the money together, and a good real estate agent to deal with the seller.

We’ve glossed over a lot, but hopefully have given you a some-what accurate overview of the buying process. But we’ll probably have some actual experts on this topic write in to tell us, that we are mis-representing the process entirely. If they do, we’ll be sure and share that and whatever else we learn with you dear reader…

Trolling the internet for BA property, as we like to do, we found this stunning italian-style palace, Palacio Estrugamou, that was recently sold: http://www.leticiafirpo.com/fichaventa.php?codigo=73

Here’s more: http://estrugamou.blog.com/

They were asking for $1.2M in late 2006. I think someone got a screaming bargain…

We went to a dinner party last night in the San Telmo neighborhood, hosted by an American couple who have lived here for 3 years, a friend of a friend (we hadn’t met before)…

When we were given the directions we were told that the taxi driver might advise us against going there, that it’s dangerous, but to ignore him…

Sure enough, the neighborhood did feel sketchy. (We’ve been there during the day, but this was our first time at night.) The lights are dim. The buildings are dark.

When we arrived at the address of the party we thought we must be in the wrong place… no lights seemed to be on… We looked up and down the desolate streets, looking for signs of life…

 But then a head popped out of the next door over and said in a slight New York accent, “The doorbell’s there, but this is the entrance. Come on in.”

The house was in a grand colonial style with a  lot of outdoor living space. The outside was lit with candles and some dim lighting. There were plants and waterfountains. It was nice.

We met the other guests. All accept one Argentine wife were Americans…

For the most part everyone was very well travelled and interesting, which was good, because earlier in the day at an outdoor bistro near the Recoleta cemetary we found ourselves within earshot of some very loud American tourists sharing intimate details of their lives to some other American tourists they had just met… ughh…

At the dinner party we never really got a good look at the house. The lights were always too dim and we didn’t want to be too nosey…We understood that it was under construction. And all the background that we got on it was that they had bought it from an African friend who was divorcing his third Argentine wife (he had two at the time evidently) and that they promised him they wouldn’t tear it down… There was apparently little in the way of electricity, little plumbing, and no heat when they bought it. But the part that we went into for drinks had evolved far from there and was quite comfortable…

Our burning question that never got answered was, “Why San Telmo?!”

Every Argentine we talk to says to steer clear of the place… It’s dangerous…

But we really do know why… the buildings are beautiful. San Telmo used to be rich. But in the late 1800s the place was over-run by yellow fever. The rich people fled to the north and their houses were taken over by the poor people and it’s been that way ever since.

You can get a lot for your money. I don’t know how much these people paid, but I’m guessing not a lot, and the place was huge… and they had another empty lot that they were turning into their garden. It was going to be nice.

San Telmo as we understand it has a lot of artists and musicians, a rapidly growing bohemian culture. It’s also home to Buenos Aires’ famous tango houses. So, culturally San Telmo may well be rich and vibrant. We’ll have to spend some more time in the area to find out… 

What gets me though is that you go out your door at night and you feel like you’re on the set of Blade-Runner… that’s a little hard to swallow… Especially in a city that’s cheap even in the nicest areas, you can be somewhere nice and safe. But who knows, maybe we’re missing the boat in San Telmo…

We’ll continue to report to you, dear reader, about the happenings here in BA, where it’s almost always an adventure…

Buenos Aires is a big bustling city. There’s a lot of noise and people out and about almost around-the-clock.

When we first got here, we were, admittedly, uptight about the place…

But when you get used to it, when the daily scenes become more familiar, it’s surprisingly easy to relax here…

Today, the sun came out. It was cool and crisp yet warm in the sun, as autumn sets in for us here in the southern hemisphere. The weather put everyone in a good mood. It was a pleasure just to be out in the streets.

We talked to a friend today about the appeal of Palermo Viejo… that it’s a relaxed place… The buildings are low. The narrow cobblestone streets slow the cars down (sort of). The people are young and carefree. It’s like a small town in a big city… When we had lunch there the other day we heard English from nearly half of the surrounding lunch tables… some of it a lispy sort of English…

The area has a lot of gay English and American men… which we take as a bullish sign for real estate in the neighborhood. As in New York, San Francisco, London, and probably in many other cities we’re not aware of, gay men have pioneered once downtrodden areas into hip and desirable neighborhoods…  

Anyway, we think that Palermo Viejo, and especially Soho, is still a viable and sustainable real estate hot spot. We’re going back to the area tomorrow to scout out some more properties…

But, Palermo Viejo has some definite negatives that we should also point out…

First, a lot of it is ugly and rundown. It’s still an “emerging neighborhood”. You can be on a very attractive street, walk over a couple blocks and… uugghh, it looks like hell…

Second, it was a poor neighborhood so many of the houses’ interiors have been hacked up to accommodate poorer families, as I wrote about in my post ‘Sausage Houses — The Problem With Soho’ 

The last drawback is that it is arguably less safe than other areas like Recoleta and Puerto Madera. There are less people in the streets, which implies slightly less security. But we’d wager that the real security difference is negligible, as the place is home to loads of foreigners, but it’s something to consider.

We’ll spare you further ramblings about Palermo, dear reader, but we’ll undoubtedly come up with something else to bore you with tomorrow… till then…

We’ve pointed out how the BA real estate market may be getting over-heated… but as we’ve recently stumbled on some interesting properties we’re going to hedge those comments… :) and say that it really depends on the neighborhood and the individual property.

Good deals are definitely still out there, but they’re not everywhere…

Some of the pre-construction deals look pretty good in Palermo Viejo/Hollywood, a new loft-style apartment for $60-$100k… My clients are not on the market for that kind of thing, but might be good for someone. Though we’ve noted the rental market is getting more staturated. It won’t be as easy as it used to be to rent the place out.

 By the way, the agencies with the most listings for the Palermo area are:

http://ojopropiedades.com.ar/
http://www.shenk.com.ar/
http://fastpropiedades.com/

To find a special place, you really have to look diligently, on foot in the neighborhood and online. Many agencies do not put things on the Argentine MLS… and for some reason sellers will use small agencies where it’s impossible to find the listing, except for seeing the sign outside the property… That’s been our experience anyway…

It’s all worth it when you find a fantastic apartment/house in the best part of a great area… for a fraction of what it would cost in the US or Europe…

We’ve commented recently on the BA real estate market, wondering if there might be a bubble… While we do think there is a short-term bubble, our general feeling is that Argentina has nowhere to go but up. We’re bullish on the country. But rest assured it will be a bumpy ride…

The Argentine economy is an enigma. We’ve read numerous commentaries and analyse-es which can be summed-up to the following… strong recovery, peso will go up, as will inflation, price-control policies will create problems, Argentina will probably prosper, but anything can happen…

The more we learn about the country, the more time we spend here, the less we seem to know about it…

Crime is an enigma here. While we feel perfectly safe all the time. We do read in the paper about the occasional kidnapping attempt, or armed home-invasion on locals or foreign nationals somewhere in the country… As much as we’d rather not think about it, it does happen. While all the expats and Argentines we’ve talked to have hardly ever had any kind of problem… We’re not afraid, though maybe we should be… (Of course, the biggest danger for tourists/foreigners is getting hit by a car.)

Even poverty is an enigma. We see a lot of the same people out begging each day… We’ve been told that most of them are gypsies and it’s a way of life for them. We first thought that that was nonsense. But the more we’ve observed these people the more it seems to be true.

We live in one of the nicest areas of the city… but there’s a shanty-town not even ten blocks away (that we never see, except from a nearby over-pass)…

The weather is great most of the time… but the g*ddamn mosquitoes are enough to drive a man insane… (We’ve been told that this is a very unusual invasion… the stores have sold-out of repellent.)

In the streets, except for extreme examples, you can’t tell if people are rich or poor. How much of the famed Argentine middle-class has bounced back after the 2001 crisis? No one seems to know.

And we’re well aware that our vision is blurry. We’re foreigners in a foreign land. Our world in Argentina is an insulated one. We try to break-out, but we never truly will, or maybe even want to…

Argentina does this to you. It regularly stimulates some strange unknown part of the brain… making you wonder about things you wouldn’t usually consider in Anytown USA. This is a kind of stimulation that many could probably do without. But for us, it’s a natural high that we enjoy and it makes us call Argentina home…

We try not to sugar-coat at Discovering Buenos Aires. We want to give you the straight dope on what we see on the ground here in BA…

One unlikely outcome from our trip to Salta, where we could reflect with a clearer head about the big city, was that we now think the property market here may be getting tapped-out.

We think we’re seeing some signs of a possible real estate bubble, at least short-term…

The market is hot no-doubt. Too hot. It smells of the bubble we just bounced from in southern Florida…

Of course, it’s very different from the creative-mortgage fueled bubble in the US… there are no mortgages here…

But, the symptoms are the same, for sale signs are sprouting up like weeds. Another BA blogger recently remarked on the proliferation of such signs in San Telmo…

This doesn’t mean that you still can’t find good deals, you can… but they are getting further and further between. Also, many sellers have greater expectations about how much money they can make…

If you look at the Buenos Aires Craigslist Rentals, they are saturated with foreigners (or others on their behalf) trying to rent out investment apartments they bought.

In Salta we spoke with yet another well-informed Argentine architect, a Porteno (from BA), who again confirmed our instincts regarding the market, that it’s probably due for a short-term slip… things have risen too fast in too short a time.

Also, the general economy could be due for a check in the near future. It’s pretty much fact that the old specter, inflation, in Argentina is creeping up briskly. And the government’s efforts to hold it down will only aggravate the situation.

We still think Argentina is a great long-term bet for numerous reasons…

But we wouldn’t pursue real estate here in the city as aggressively, as one would’ve wanted to maybe a year ago. We’re on the tail end of a good run.

That doesn’t go for all of Argentina. By all accounts, good buys can still be had around the country…

We could be entirely wrong about this. We have some clients coming into town this week, so we’ll get their opinion… but we’re  going to give them the same advice we’re giving you dear reader… Let’s be selective, look around, and bide our time. There’ll be some better deals for us down the road…

We are going to be back out on the real estate hunt sooner than we expected. Our offer on behalf of our clients for office space was passed up in favor of another one…

“Was it something we said?”

We waded through the real estate drama I told you about in a previous post… Of course everything is negotiable, so the commission issue was resolved relatively easily… But it was all for naught anyway.

“Could we have done something differently?” we thought. Though we know we did what we could within the best interest of our client…

 The seller: “It’s not you, it’s me… I’ve changed. And this other buyer, well, he’s willing to come up to the price we want. I’m sorry. It’s just not going to work between you and me…”

Sniff, sniff… Well, we’re on the rebound now, and back into the market…

So, if you like architecture and real estate, then you’re in luck my friend because we are going to be looking at some exciting new, well actually old, places for your viewing pleasure…

That is if we’re allowed to show you. We were scolded for posting pictures of non-public listings. Some sellers like their privacy… Anyway, we’ll show you what we can…

Here are two properties that we found interesting, but because both of them were located a little further out from downtown than we wanted to go, we decided not to pursue them (on behalf of our clients, of course)…

This one (I’ve shown the exterior before in this blog), in a sort of Venetian style, is in Belgrano on a historic street, where all the houses look like this or a colonial style…

Here’s the street, which doesn’t really do it justice as you can’t see how nice the houses are…

The one next door is for sale too a mirror image of this one… It’s priced a little cheaper than this one at $360k…

The next house I’d like to show you is a large, former mansion that is currently being used as a church mission house for boys… This is in an up-and-coming area northwest of Palermo Viejo, which is starting to be called Palermo Queen.

Honestly, we’re not crazy about the Tudor style, but this one had enough details to make it worthwhile…

There’s a lot of potential and a lot of space to work with, but a lot of work too… And it would have to come down quite a bit from the list price of $500k to make it work out with all the renovation needed to get the place where it should be…

Anyway, I don’t know if you’d want to rush down and buy these… but thought they might be interesting to look at. I always enjoy all the period details, details that would cost you mucho dinero to replicate in the US…

We managed to get ourselves in a sort of real estate drama situation… partly because we are ignorant of local customs in the property trade and partly because everyone wants to keep their hand in the pot…

Here’s what happened… we were scouting for office space on behalf of our employer, we went to the property in question just to have a look at the outside. An agent was there waiting for another client and he obliged us to have a quick look around. He opened the door, we went in and had a look for less than 5 minutes…

We’ve since expressed interest in this property. And now the agent who opened the door for us on that occasion, he turned out to be the seller’s agent, thinks he’s entitled to the full commission including the buyer’s agent’s commission… which cuts out our agent who has shown us loads of properties… who we want to represent us in the transaction…

Our agent for some reason seems to have relented to this, which we don’t understand… We haven’t made a fuss about it. But I think we will because we won’t pay extra to compensate our agent so this guy gets double commission for doing basically nothing…

His argument is that he showed us the place first… But we told him then that we already had an agent going in… He doesn’t speak English, so, our poor Spanish skills are partly to blame here.

We are loyal to our agent because that’s the way we feel we should conduct ourselves. I think we can get this guy, the seller’s agent, to relinquish his silly claim on our agent’s commission. But we’ll see what happens… Anyone, Argentine or otherwise have opinions on this?

Saludos!

Note from a reader who knows way more about the city than we do… 

“… Here are a few more ideas regarding areas to look at that you haven’t mentioned in your blog: 1) At some point, it would definitely be worth your while to explore the northern suburban municipalities. One can still find really good value for houses in this area. San Isidro (B.A.’s answer to Bronxville, Brookline, or Evanston) is the nicest and wealthiest of these towns but Vicente Lopez, Olivos and Tigre have nice sections as well.

“A good little day trip is to take the Tren de la Costa (which had just opened in 96) from Olivos up to Tigre. Another interesting area to look into is what the portenos call “countrys”. These are the country clubs that wealthy portenos go to in droves on the weekend to work on their golf and tennis games. I’ve found really good value for houses in various countrys (and there are a multitude of them, typically located north of the
city).

“As for other urban neighborhoods to look into: Congreso, though it can be a bit down and out, is still cheap and it’s obviously a great, central location. A nice little corner of Congreso is a side street called pasaje rivarola, between Bartolome Mitre and Peron - head for the Cemeterio de los Relojes (a watch repair shop) if you go. I’d look for apartments directly around this area of Congreso. The closer you get to Constitucion in Congreso the worse it gets.

“Another intriguing and still cheap although again a bit down and area is Once, which is traditionally a Jewish neighborhood and the old garmet district - it’s where the Iranian/Hezbollah backed bombing of the Jewish community center (AMIA) happened back in the mid 90s. Another little area with good value is Facultad Medicina, which is kind of an outlying chunk of Barrio Norte. It has remained pretty affordable because it’s where a lot of U.B.A. students live.

“Villa Crespo, just to the north of Palermo Viejo, is a solidly middle class neighborhood that’s now gentryfing because of its proximity to P.V., so the closer to Av. Cordoba, the pricier it gets. Chacarita has some real nice sections too and has a lot of charm - it’s one of B.A.’s most traditional neighborhoods, and it’s still almost completely untouched.

“I hope all this was helpful and not too long-winded or redundant vis a vis
what you already know.”…

My email reponse to this person bounced, so I hope he doesn’t mind me posting this… I’m sure others will find it useful as we did…

We’ve recently been scouting out some property in the hot, hip area of Palermo Soho… We like the bohemian flavor of the Soho neighborhood, the shops, the restaurants, the attractive classical buildings… but those buildings are deceiving…

The problem has something to do with meat (as many things do in Argentina)… casas de chorizo…

Palermo Soho used to be a poor neighborhood, filled with large low-income families. So, as the families grew they would further divide up the house to make room for the new family members. They just keep adding walls, like sausage links and viola… sausage houses…

You wouldn’t know it when you look at these houses from the outside, but they can be troublesome inside (I didn’t see inside all these particular ones, so I don’t know)…

It’s certainly not true of all. But many we’ve found have very poor interior layouts… Of course, you can renovate and it can be done cheaply here… but that takes time and money.

Anyway, in the competitive Soho real estate market you’ve got to pay attention and be quick on the draw to find that special property…

By the way, another expat blogger at http://movingtoargentina.typepad.com/ pointed out a segment on NPR’s ‘Marketplace’ radio program today about Soho called Soho on the Cheap.

We love looking at these old Petit Hotels for sale… But we have a hard time justifying, to our clients, the real expenses of buying and owning one.  They cost a pretty penny to start with, then the renovation would realistically cost mucho dinero too… But they sure look good… (Unfortunately, we aren’t allowed to show pictures of the interior. Some of them are breathtaking, but some have breathtaking amounts of work to do…)

We spent most of this weekend hunting for properties. We were directed to the neighborhood of Belgrano where we were told we could get more for our money… And sure enough there are some good deals to be had. This 2,900 sq ft classical spanish-style house is on a quiet tree-lined street…

They’re asking $320k for this. It’s been renovated,  but the interior still has many classic details…

and a new kitchen…

Belgrano is a little off the beaten trail, a 10 to 15 minute cab ride from downtown. It’s not as posh as the other areas, but in terms of value it has a lot going for it. Also, it’s more residential and quiet than many other areas…

This Petit Hotel is in the more middle class part of Recoleta… But the asking price for this beauty… $125k! I’ll be seeing this one very soon… More pictures below, of course it needs a little renovation.

To try to reproduce the iron and woodwork of this place in the States alone would cost you $125k! 

[Correction: Call it irrational exuberance... What's actually for sale is only a portion of the building you see, not the whole thing... So, really not that exciting. Sorry for the screw-up...]

We tried to stay on the straight and narrow… to focus on building the business that we came here to setup. But the fact is that we love international real estate… We can tell you what’s going on in the property markets in Venice, Italy, as well as Amsterdam and the Croatian coast… So being here in the midst of this property boom we’re like a pig in filth…

And we also have a good many contacts here, nearly all of whom know about some hidden super-value property deal… “Are they friends with the owner?” we wonder… “Is it a good idea to buy a national landmark?” “Is this a great value, or a completely over-inflated price?” “Will it cost $50k to fix up this place or $500k?” These are the questions we try to answer everyday. The problem with real estate “investing” is that it’s really all about spending. We need to concentrate on bringing cash in the door to support our “habit”…

This charming little townhouse in Palermo Viejo, just came on the market a few days ago. It’s small, at 900 sq ft with a 250 sq ft terrace, but at only $82k (definitely in our price range) and a good location… it’s tough to beat… We were supposed to see it tomorrow. But the agent just emailed to inform me that the place is already under contract…

“Palermo Soho, Palermo Viejo, that’s all you hear from the Americans moving down here. They don’t seem to realize that the rest of the city exists.”

That was the complaint of an Argentine woman we interviewed for a writing job.

“The Palermos are nice… but they don’t have the charm nor the architecture that Recoleta has…”

We thought it was funny how she was offended by the foreigners’ obsession with one area of her city.

We also met today with an American, an International Living reader, who moved to Buenos Aires two and a half years ago. He’s in real estate in various capacities, and had this to say, “I love living here and have met some wonderful people, but there are some who just want to get whatever they can out of you while they have the chance. It’s a self-fulfilling prophecy, they don’t think they’ll get another chance, so they stick it to you… And of course you won’t do business with them again!

“They have a mindset that wealth is limited. They don’t want money. They want your money! Some people get involved with an Argentine who speaks good English and assume that they also have the same values… that’s not a good assumption to make. But there are a lot of foreigners in the marketplace demanding smooth, secure, and ethical transactions. And I think they’ll be rewarded for their investments.

“Argentine real estate has another doubling to go, at least. The cat’s out of the bag on Argentina. Yes, there’s a deduction for the fact that they speak Spanish and not French or English, and for the distance from Europe and USA. I’d call that 20%-30%. That means $6,000-$8,000 per sq meter, nearly three and four times what places are currently fetching… I want to ride that wave don’t you?!”

We left our new acquaintance feeling a bit woozy… “Triple? Quadruple?” we thought. “Hmmm…” This reminded us of Florida a couple years ago… That could be trouble. But we too want to make hay while the sun is shining…

Today we looked at this Petit Hotel for sale in Palermo Chico for a client… (way out of our price range unfortunately) This is a 7,000 sq ft converted mansion with three floors, a tiny back yard, two large terraces, and a guest house. It can be used for offices and/or residential which is one of the advantages. It had beautiful parque floors, crown mouldings, and doors.

However, it’s currently being used as an assisted living facility, so, our tour was fairly short and gloomy… and we couldn’t take pictures because the residents don’t know that the place is for sale… It’s a little pricey for the work that needs to be done, but this is one of the most expensive areas of BA, and in a major US or European city this place could fetch an easy $3M… I thought it could be a very nice property for someone who can afford it and is bullish on Argentine real estate.

You can still get a nice apartment in a nice part of town for around $250k-$300k here in BA. But, there’s a boom underway and prices have more than doubled since the financial crisis in 2001. That doesn’t mean it’s too late… Let’s take a quick look at some of the different neighborhoods and what they offer…

Palermo- This is the largest area of BA and it breaks down into a number of sub-areas such as Palermo Viejo, Palermo Chico, Palermo Soho etc. all with different flavors of their own. Palermo is where the large parcs of Buenos Aires are (the largest urban parks I’ve seen, like Central Park…). Palermo Chico is an old money area where you’ll find many Embassies. Palermo Soho is redhot with expat money right now. It’s nice, young, hip, and very appealing. But it could be getting maxed out… just too hot…

Recoleta and Retiro- The old money neighborhoods of BA. Safe, but kind of loud depending on where you are. There are still good values to be had here… in old classical buildings that wealthier Argentines are not so interested in…

Puerto Madera- Modern converted port area of BA with new luxury condos. This is just like in an American city. It’s nice and quiet, but doesn’t really appeal to me… Also, it’s expensive. The wealthier Argentines are pouring in here. A good apartment will cost about $400k…

San Telmo- Very touristy area during the day. Not super safe apparently. But you can get better bargains here.

Nunez- Far north part of the city. We haven’t been here yet. But it’s supposed to be similar to Palermo Soho, but cheaper, a new expat hotspot… The drawback is the distance from the goings-on downtown, probably need a car. (I haven’t talked about Argentine driving yet… but I will, in a few words, “be a afraid, be very afraid”)

Of course, it’s a huge city. And there’s still tons for us to see. But I wanted to set the ground work for a real estate search…

The best online tool for BA properties is this one mentioned in my links as a Realtor.com for Argentina: http://www.topinmobiliario.com/ It’s in spanish, but you can figure it out… Of course, http://craigslist.org for BA is good too.