Outside the box - Real Estate investing in Panama

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Outside the box - Real Estate investing in Panama

Dave Williamson
Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes

Hey guys,

I'm down in Boquete, Panama for a few days exploring investment opportunities. I have to report that I'm impressed with the group that has been running the show, International Coffee Farms. 

I have never considered investing internationally, but the business plan put in place for these turnkey specialty coffee parcels has made me a believer. I'm not saying that I favor this over buy and hold rental properties, but this seems to be a great solution for reinvesting an old self directed IRA that I have. Could also be a great opportunity for those looking to diversify or invest internationally.

Does anyone else have experience with this investment vehicle or others like it? I'm strongly considering adding at least one parcel to my portfolio.

- Dave

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Jackie Lange
Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
10y

Yes, I live in Boquete Panama and I own a small organic coffee farm so I know that business too.  I just finished a coffee harvest.

The ROI quoted by some companies selling coffee farm parcels in Boquete is totally unrealistic.
Buyer beware!!!!!

Reality is often completely different than what it looks like on paper.

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    10y
    Originally posted by @Dave Williamson:

    Hey guys,

    I'm down in Boquete, Panama for a few days exploring investment opportunities. I have to report that I'm impressed with the group that has been running the show, International Coffee Farms. 

    I have never considered investing internationally, but the business plan put in place for these turnkey specialty coffee parcels has made me a believer. I'm not saying that I favor this over buy and hold rental properties, but this seems to be a great solution for reinvesting an old self directed IRA that I have. Could also be a great opportunity for those looking to diversify or invest internationally.

    Does anyone else have experience with this investment vehicle or others like it? I'm strongly considering adding at least one parcel to my portfolio.

    - Dave

    Seems cool,

    I have always wanted to own a holiday house in the Bahamas :)

    Actually traveling there to look at few early next year. 

    Need to make sure that all legals are in place as buying overseas is a risky game for sure.

    Hurricane Jaoquin went through so everything is literally 50% off lol

    Thanks and much success

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    1Reply
  • Eric TaitPro Member
    Investor · Houston, TX · Member since 2013 · 314 posts · 146 votes
    10y

    Hey Dave,

    It was great to meet you this weekend in Panama, one thing to consider is you would not be subject the UBIT (Unrelated business income tax) using your IRA money to buy parcels with no debt on them. If you were to use IRA money to purchase real estate with recourse debt, then a portion of your returns may be taxable. (check with you CPA of course)

    1Reply
  • Dave Williamson
    OP
    Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes
    10y
    Originally posted by @Eric Tait:

    Hey Dave,

    It was great to meet you this weekend in Panama, one thing to consider is you would not be subject the UBIT (Unrelated business income tax) using your IRA money to buy parcels with no debt on them. If you were to use IRA money to purchase real estate with recourse debt, then a portion of your returns may be taxable. (check with you CPA of course)

     Thank you, Eric. I'll have to do more research on the tax advantages. Great to meet you as well.

    - Dave

    0Reply
  • Yasir Lillingston
    Investor · De Pere, WI · Member since 2015 · 16 posts · 8 votes
    10y

    Hello @Eric Tait and @Dave Williamson,

    I learned about this opportunity and without the benefit of having visited the location, is something I'm considering as an investment with part of funds I have on my IRA.

    If possible, I'd like to get your impressions on your visit. What risks have you or the people running the farms have encountered and mitigated?, business model viability, etc.

    Any input would be appreciated before I get in touch with them.

    Thanks for the feedback and have a great day.

    Yasir Lillingston

    0Reply
  • Dave Williamson
    OP
    Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes
    10y

    @Yasir LillingstonI don't personally know how to operate a Coffee Farm, but David and Darren seem to run a tight operation. I was truly impressed during the visit. 

    They were previously involved with a group in Columbia who I hear was successful with a similar model. They a great guys. I suggest reaching out and speaking with them about your interest and expressing and concerns you may have.

    0Reply
  • David Faulkner
    Investor · Orange County, CA · Member since 2015 · 2k+ posts · 3k+ votes
    10y
    Originally posted by @Dave Williamson:

    @Yasir LillingstonI don't personally know how to operate a Coffee Farm, but David and Darren seem to run a tight operation. I was truly impressed during the visit. 

    Playing devil's advocate here, but if you don't personally know how to operate a Coffee Farm, then how would you know the operation is well run? More of a rhetorical question to consider than anything ... best luck to you whichever way you go.

    1Reply
  • Emilio Ramirez
    Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
    10y

    Panamanian coffee is supposed to be great. (I don't drink coffee so I wouldn't have a clue) Especially from Boquete.  Beautiful area. I would ask your buddies about fair trade policy. Last time I was there, the indigineous people would pick the beans. $5 for a 5 gallon bucket full. Theres another thread on here about buying abroad. Specifically Colombia and Panama. I think @Jackie Langeis in Panama and may be of some assistance to you. I would not purchase in Panama without multiple visits and with the assistance of a trusted lawyer (which has to be Panamanian)

    1Reply
  • Jackie Lange
    Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
    10y

    Yes, I live in Boquete Panama and I own a small organic coffee farm so I know that business too.  I just finished a coffee harvest.

    The ROI quoted by some companies selling coffee farm parcels in Boquete is totally unrealistic.
    Buyer beware!!!!!

    Reality is often completely different than what it looks like on paper.

    2Reply
  • Dave Williamson
    OP
    Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes
    10y
    Originally posted by @Jackie Lange:

    Yes, I live in Boquete Panama and I own a small organic coffee farm so I know that business too.  I just finished a coffee harvest.

    The ROI quoted by some companies selling coffee farm parcels in Boquete is totally unrealistic.
    Buyer beware!!!!!

    Reality is often completely different than what it looks like on paper.

    Jackie, Thank you for the reply! Have you had a chance to meet Darren and David and/or look into their operation? They seem to run a tight ship, but I don't know enough about specialty coffee or the industry as a whole.

    0Reply
  • Ronald Hirdes
    Saint Clair Shores, MI · Member since 2016 · 1 post · 0 votes
    10y

    What did you decide to do? Im curious.

    0Reply
  • Jackie Lange
    Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
    9y

    I've talked to several people who have bought in to the speciality coffee parcels. They explained that part of the ROI is based on being able to resell your parcels quickly for a profit and not exclusively from the sale of the coffee.

    Note that there is a 5% capital gains tax in Panama and you'd also have to pay capital gains taxes in the United States. This needs to be calculated in to the evaluation.

    2Reply
  • Carrie Cavins
    Keller, TX · Member since 2017 · 57 posts · 18 votes
    9y
    Jackie Lange have you been a podcast member? I think you would be a good guest!
    0Reply
  • Betsy Czark
    Investor · Puerto Armuelles, Chiriqui · Member since 2016 · 4 posts · 1 vote
    9y

    My husband and I have been living and investing in Panama for about 10 years.  I agree with both @Emilio Ramirez and @Jackie Lange.  You should visit multiple times before investing, keep in mind both US and Panama tax implications, and take your time.  Overall, Panama is a great place to invest, but not all investments are equal.

    0Reply
  • Jackie Lange
    Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
    9y

    In Panama you need to be especially careful to AVOID buying any ROP (right of possession) properties.  ROP property is not titled. 

    Never sign a contract or put any money up until YOUR Panama attorney has done a complete title search and YOUR Panama attorney creates the purchase contract.    The title search may reveal that the person trying to sell you property in Panama is not even the owner yet represents themselves as the owner.  

    I know several people who bought ROP ocean front land in Panama - only to find out later that they could not build on it or that Panamanian family members claim the land so the buyer lost all their money.  

    1Reply
  • Jackie Lange
    Investor · Central America, Panama · Member since 2010 · 423 posts · 293 votes
    9y

    Also, in Panama, there are expats (non-Pamanians) who only live in Panama a few months out of the year so they can try to sell real estate to foreigners.  They are not full time and really don't have a good handle on the market or the latest laws.   An expat cannot be a real estate agent in Panama.  For an expat to legally sell real estate in Panama, they can act as a "real estate consultant" working under a Panamanian real estate broker.  Even then the expat will need a work permit to legally sell anything in Panama.  If an expat wants to sell you anything ask to see their work permit.  If they don't have a work permit, don't work with them. 

    1Reply
  • Linda HastingsPro Member
    Rental Property Investor · Stockdale, TX · Member since 2017 · 284 posts · 202 votes
    7y

    @Dave Williamson Curious to hear how this turned out. Did you end up investing, and if so, how is it going?

    0Reply
  • Dave Williamson
    OP
    Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes
    7y

    @Linda Hastings I did not end up investing in parcels, but I have kept up with the company + newsletters, and they still seem to be thriving

    0Reply
  • Account Closed
    Lake Charles, LA · Member since 2015 · 24 posts · 3 votes
    6y
    Originally posted by @Dave Williamson:

    @Linda Hastings I did not end up investing in parcels, but I have kept up with the company + newsletters, and they still seem to be thriving

    What was the main thing that made you not invest with them? 

    0Reply
  • Dave Williamson
    OP
    Investor · Atlanta, GA · Member since 2015 · 63 posts · 12 votes
    6y

    What was the main thing that made you not invest with them? 

    Limited capital, and I invested in a few properties instead 

    0Reply
  • Anne-Michelle Wand
    Member since 2024 · 13 posts · 1 vote
    2y
    Quote from @Dave Williamson:

    Hey guys,

    I'm down in Boquete, Panama for a few days exploring investment opportunities. I have to report that I'm impressed with the group that has been running the show, International Coffee Farms. 

    I have never considered investing internationally, but the business plan put in place for these turnkey specialty coffee parcels has made me a believer. I'm not saying that I favor this over buy and hold rental properties, but this seems to be a great solution for reinvesting an old self directed IRA that I have. Could also be a great opportunity for those looking to diversify or invest internationally.

    Does anyone else have experience with this investment vehicle or others like it? I'm strongly considering adding at least one parcel to my portfolio.

    - Dave


     You probably already did or didn't invest in a coffee farm by this time but investing in agriculture of many types is quite big here. Coffee, Avocados, Mangos, Limes, teak forests, and more. They can be quite profitable but like any farming depend on weather factors, and market demand. Its also long term since freshly planted trees or the like take several years to begin bearing fruit. Its a good diversification play. For me, I prefer, land banking and  multifamily development. I have lived and invested here for 25 years and had a home in Boquete for 10 years. Now we live in Bocas.

    0Reply
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