Belize anyone have experince investing in this country?

Question

We just spent the last week here and my client from the states that I fund some of their US based BRRRs' is working on a Private Island development in Belize.. We got to tour the island etc.. Along with some tourist activities.

WE also meet with some locals who got us an audience with the Minister of lands and the Deputy Prime Minister that is working on a housing project called starter houses for Belizian citizens. The government will build small 600 sq ft one bed one bath homes and sell them to under privileged buyers for 100.00 Belize a month with no money down .. the homes are constructed to allow add on bed rooms and another bath. The recipients of these homes have to pay for 10 years ( there is a form of deed restriction) and after 10 years they own it free and clear. Now 100.00 Belize dollars is 50.00 US. so a form of subsidized housing obviously.

The issue and opportunity for us is that in the past Belize government had problems with the contractors getting paid and not finishing.

So to that end we would supply the up front cash to build and the government would pay us upon completion taking away the whole draw process.  It was very interesting dealing in this area.  And meeting these Ministers . our local contacts are the ones who are well known and will be driving the process. Will see how it goes .. Anyone have any experience buying selling or loaning money in Belize ?

Being and X logger and Timberland owner from Oregon I am also interested in plantation hardwood production in Belize we looked into a little bit but that will be the next deep dive.

AS for the Island thats another unique situation and one that we are still looking at if we want to invest or not. For the right folks that like ultra luxury remote vacations next to the big Barrier Reef I can see it. For us Not so sure other than the fishing and snorkling was / is amazing.

Any thoughts anyone ?

Henry Clark · Answer

We have bought 4 properties in Belize.  If you want, call me.  There are so many angles to this.

1. You can’t just take money out of the country.  Easy to get money in.  Risky to park money there in a bank.

2.  The two party government switches every cycle and your deals are totally at the whim of who is in office.

3.  It’s illegal to do bribes overseas if your a U.S. citizen

4.  The country is basically bankrupt.  Would have them do the infrastructure up front versus you building up front.  Only extend yourself to the degree you dont mind losing.

5.  I would say there isn’t enough meat on the bone even with 1,000 units.  Unless doing out of concern.

6.  This is a great program.  One of our workers just bought a house through that program.

7.  Confirm they will wave any import duties.  Otherwise you might get caught on your cost estimates.

8.  Unless your local person is plugged in. Get their guarantee they will expedite all of your legal entity and banking issues.  Otherwise you could be bogged down in red tape for several months.

Teak is another discussion.  There are 3 opportunities on the table currently that I know of.

On the island investing.  If you will have the cash I would wait till the next Covid shutdown, stock market slump, etc.  Buy then  1/2 of the properties will be up for sale.

If you’re looking at San Pedro or Ambergris Caye I would make sure you understand water, sewer and golf carts infrastructure and permitting.

Any deal you do down there you have to do Cash.  Interest rates and loans down there are to prohibitive.  US banks do t know the market and can’t place liens down there.

Exciting times though down there.  Will be down there next week and in and out for the next 4 months if you want me to look at something.

If you go down again, if it is to San Pedro. I can give you a friends name. Pay him $50 for the day and you rent a golf cart. Do a tour of the island with him. He grew up there. Have him talk with you about what he sees. He won’t care what you do. He won’t have any skin in the game.

Jay Hinrichs · Answer

thanks Henry I was hoping you would see this and chime in.  Our locals are G  Juni  Sect etc etc. My main contact there is  a flipper I fund in KC has been investing there for 15 years.. I don't want to do the island deal to me that's a hospitality play..  Totally get the political aspect.. will need to research getting money out..  One of the points of discussions with the minister of lands and development was they would provide infrastructure at their cost and would waive import duties. The lawyer we are going to hire is the president of the BAR in Belize so hopefully we get proper legal representation that will survive administrations.. Also 10 4 on the bribes this was also covered very frankly in our meetings. I have no interest in personally owning anything there and I would never live or retire there too many bugs and healthcare etc would be of great concern along with there are simply too many sneaky speed bumps on the highways :) For me if I was going out of country, I would go to Portugal personally. But anyway, my main goal is to support my KC client's interest there we will do fine on return on dollars, and we won't risk but a hundred grand at any one time so if we get stung it will not be life altering. However, my client is one that does one heck of a job in his market and is a one of my top producers so I look at this from that angle he needs the US income so he can build his resort or resorts on those islands. he has a play on the Islands I can't really go into on open forum but it seems pretty unique but nothing like I said I have an interest in personally at our age. maybe if we were still 30 YO and immortal I would have  a different perspective on it all.

End of the day as a life long RE Broker Investor Developer Lender  it was pretty cool to go into a foreign country take meetings with those that run the country so will see how it all goes and report back.

Henry Clark · Answer

Day is done watching White Collar reruns. Made me think I didn’t go over the Angles.

Angle:

1.  Cash is king.  It’s a buyers market.  Locals have no money.  When we go to buy a property we make a list.  13 on the last list.  Bought the 3rd one.   Their listing price and our offer price.  Put them in descending order.  Have my realtor John Acott with Remax.  Make 3 offers at a time, 3 day offer, subject to inspection.  Example list $500,000; offer $300,000.  Don’t bargain on price.  They accept or don’t.  The first property we bought was in the market for 15 years.  Make your money going in, don’t plan on making money selling.  See 2 next to understand why.

2.  If you’re an Expat you will leave.   There are very few expats who stay.  Not enough cash, the dream isn’t the dream, divorce, death, no retirement homes, severe ailments, grandkids want you back.  At some point you have to sale and are on a timetable.  Thus 1 above.

3.  Don't make your money off the local economy.  Our teak lumber sales will be out of country to India, China or Europe.

4.  Timber is a long term investment.  The properties we buy have secondary values.  Great views, great locations, water features, great cell or internet (big deal), electric/water, upgrade with fruit trees and ponds, huge trees, garbage dumps you can build a different road around, etc.  Right now you can buy those locations relatively cheap.  Buy a beachfront property in Fort Lauderdale, Stream side lot in Vail, hillside lot in LaJolla, etc  for $40,000.  Can’t.  You can in Belize.  Just need to let time go buy in Belize.

5.  Everyone is a real estate agent.  Everyone.  Locals don’t like paying commissions.  If they help sell a piece of land they will get some money.  Get the lowest prices buying thru locals.  Stay in one place.  Then consistently go to the same places.  Fruit stand, restaurant, gas station, grocery store, convenience store, etc  At each location tell them you’re looking to buy some property.  You will start getting offers within 1 or 2 days.

6.  Tourism is the biggest driver in Belize.  Covid, stock market crash, etc literally 1/2 of the beachfront properties go up for sale.  Time your purchase.

1,600 square foot ranch,  Entire rooftop balcony, mahogany furniture and doors, marble top kitchen and bathroom, tile floors, double pane glass, porch, plastered inside outside.  5 foot diameter trees around .  Toucans and parrots flying by.  Howler monkeys in the trees.  Clear river 200 feet away.

$130,000.

And the people are great!  Marlon, Mr Mar, Jax, and Rigo.

Henry Clark · Answer

Just got back from Belize. Iowa 50 degree weather melted all of the snow.  Might get the lawn chair out and work on the tan.

On your timber interest.  We looked at 4 properties totaling around 400 acres.  4 different ownerships.  Most are 12 to 14 years old.  All need TLC.  Trimming and thinning.  Price was too high for me, but we did not counteroffer.  Have found properties need to be in the market for 2 years before the owners realize they aren’t getting their price and are willing to negotiate.  Two of the properties we liked the trees.  Other two were ok but not great, unless price was right.  We left the door open when they are ready to sale on price.

Other properties available.

Owners are aging out in 70’s to 80’s.  Plus differences in management style and financial input. Good time to buy.  We have a solution for growing old personally as far as managing the team thru sale.

Rode with our realtor.  Down their commission is 10% paid by seller.  Recommend you get your own realtor to approach them so you have a buyer realtor.  They split 5/5%.

Side note on general real estate. Our realtor just had their annual Belize wide ReMax meeting. All agents said business was significantly down. People from the U.S. waiting to see how the economy turns out.  The year after

Covid was their best year ever.

Will be a good time to buy. As fewer buyers and as STR or MTR rentals go on the market.  Belize is very tourist driven.   Tourism is up there.  A question of people starting to pull

Funds back.

Henry Clark · Answer

It is a very good program from the locals standpoint.  So it’s not a demand issue.  Purely cost and governmental.

If you decide to look at teak Belize doesn’t have much.  I would look at Panama, Costa Rica, Nicaragua, Columbia, Guatemala. More sizable plantings.   Unless you’re wanting to start from dirt.

We like to buy 12 to 14 year old plantations where the people have to sell.  This cuts off half the time.  Plus most of the work planting and weeding is thru year 4.  After that it’s trimming and thinning.

Mainly doing it for the fun.  No money comes in for another 12 years, which we don’t need.  Nice change from snow plowing self storage in Iowa.

Henry Clark · Answer

To many bumps not to forget them and come to a screeching halt every once in a while.  It is better than two years ago.  They were not painted or marked before.  Hated driving at night, since the road and the humps 1 1/2 foot bumps were the same color.

Jay Hinrichs · Answer

the starter home project has 1000 lots ear marked for this project and they are in the Belize city area.  its a master plan  with community services fire station and police station. unclear who pays for those ..  Ministers have indicated they will do all the infrastructure however I think this is just water and power.. septic systems and gravel roads with no storm water systems. is my thought

Belize anyone have experince investing in this country?

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