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We’ve been off the radar for a while… that’s because we’ve been working away at the business that was the purpose of our move to Argentina.
We’ve finally gotten our website up, you can see it here: Stock Market Investing News
It’s been a long uphill battle, but we’re pretty happy with the results so far… Now all we have to do is get a ton of traffic there… 
The website pulls together some of the best articles from the world of contrarian stock market investing. If that sounds interesting to you, please take a look and let me know what you think.
http://www.contrarianprofits.com
Cheers,
Will
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…
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!
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.
We arrived back in BA this morning… It feels great to be back!
Here’s some of what we missed in the US:
- The coffee. (This is going to sound very snobby, but, the French have a name for American coffee which translates to ’sock juice’. After enjoying Argentine coffee for months, cafe americana tasted awful… even in nice restaurants, you order espresso and they give you some diesel fuel in a small cup…)
- The food. (We went to some of our favorite restaurants back in Florida, and despite a few exceptions it was disappointing…)
- The excitement. (We missed the daily adventure that comes with the language, cultural, and geographical complications we face in BA.)
- The prices. (It’s tacky to talk about prices, but, we were shocked to find how fast money disappears in the US comparitively…)
We could go on, but you get the idea. We enjoy life down here…
But it’s not for everyone… We talked to a couple of Latin Americans in south Florida, who had been to BA, loved it, but had absolutely no desire to live here. They appreciate the lifestyle, the culture, and the many things that the city has to offer… but their main complaint was the business environment. They say there’s a different set of values in business. What people say and what they do can be entirely different things…
We have not experienced this ourselves. People have kept their word in our dealings… That’s because these people understand how important ethics are to a lasting and successful business. Sure, you can screw someone once or twice, but that’s it… Then you’ll no longer have the opportunity to do business with them, or their contacts, again… Especially in this internet age, word gets around, fast… Reputation is important in South America. If you’re careful and deal with the right people you can reap the substantial opportunities that exist down here.
To find some good contacts, I recommend the Argentina Owner’s Manual from International Living. It doesn’t cost a lot, but could save and make you a lot of money if you’re thinking about doing business in Argentina.
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…
We set-off on Sunday to take the fast-ferry, that runs hourly, from Buenos Aires to Colonia, Uruguay. But we were late getting over there and the seats were sold-out on the next two boats… So, we strolled along the banks of Puerto Madera, then we just kept strolling all the way to the antique market in San Telmo… a place that continues to seduce us…
San Telmo is like an older, yet attractive, forbidden seductress… We at first baulked at her overtures. “It’s too dangerous there”, we thought. But over time we’ve found that the architecture, those beautiful buildings, the authenticity of (most of) it… it’s the ‘real Buenos Aires’ as one reader recently put it… is indeed desirable. And it’s still very cheap.
We’ll get you some pictures and a more thorough report on the place soon…
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…
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!
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.
A recent Economist poll named Buenos Aires as among the cheapest of the world’s major cities. Tourism and GDP growth are both at record levels. For the 4th straight year the economy grew by more than 9%…
I could live anywhere in the world. But I choose to live here because I love value… getting a good quality of life for my money… And I enjoy being in the midst of so much opportunity and potential…
Even if you aren’t considering moving here. If you might invest in Argentine stocks, real estate, or business, you’ll want to review this crucial report about a country that undoubtedly holds the world’s best values: Argentina: The Owner’s Manual
The peso will only stay devalued against the dollar for so long. Don’t kick yourself after this window of opportunity closes… Check out the Owner’s Manual and see what this country has to offer while the time is still right.
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…
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