Cash-out or partner on my 4 unit property in Costa Rica

[Dustin Calgaro]

Hi BPers

I bought and completely remodeled a building with three side-by-side, 2 bed 1 bath apartments and one small, 2 bed 1 bath house on ~1.5 acres in Ojochal, Costa Rica. I added a pool and did some landscaping and have been using it as a family winter retreat and renting it to a STR operator the rest of the year. It is 5 minutes from the ocean and is in a small community that is nestled in a valley between the mountains that meet the shoreline. The property feels like you are in the jungle yet is on a paved road with high speed fiber optic internet and within walking distance of great restaurants that are owned and operated by entrepreneurs from around the world.

The area is expanding rapidly and I could see this property really going up in value as there is a very limited amount of buildable space between the mountains and the ocean, so I see this as a great investment and I would love to keep it. My issue is that I also want to expand my LTR business here in the states and would like to use the equity I have in the Costa Rican property in order to do so. However, currently there are no options for a foreigner to get a cash out refi on their property in Costa Rica other than for construction on the property itself. This is because most of the financing comes from government programs and they, of course, prefer to keep as much investing as possible within the country.  Because of this, most buyers come with cash or use short term seller financing. I used both and now own the property free and clear.

 There is a lot of room for expansion on the property and a person could build more units for not much money. (Or a restaurant, lots of options). The idea behind the expansion would be to make the property more profitable for two owners and to always have enough units for the owners’ to be able to enjoy the property without having to disrupt the rental business.

Does anyone have any thoughts on financing a foreign property and/or how one might go about finding a partner?  I would be looking to cash-out between 300-400k. For an interested partner- the back of a napkin calculations say that it would take ~475k to be a 50% owner of 8 units in Costa Rica.  It would cost less, initially, if a person kept it as four units and either rented the property out less of the time or not at all and kept it strictly as a vacation property.

Any thoughts are appreciated