All Forum Posts by: Lawrence Johnson

Short term rental is still the dominating force here in PR, but depending on the town, there is a market for long term as well. Multi family properties in the metro areas are prime. Soon too i feel we will start to see more REOs pop up as the Maria HUD funds become available (ill be posting more about these funds and the indirect benefits for investors once they are actually available for new buyers).

@Daniel Kauffman to the best of my knowledge there are no commercial banks in the states will not lend in Puerto Rico. There are few non-depository institutions  such as mine, that are based in the states and have a brick and mortar location here on the island that focus primarily on properties here.

As far as Rehab Costs here compared to other areas are you referring to surrounding Islands or other States in the US?  In either case I will tell you that labor costs are very low here so if one is familiar with the type of material needed for rehab your dollars will stretch  (outside of perhaps concrete costs) a bit more in PR than in most places in the states...the key (as is the same anywhere) is finding reliable and quality  workers. 

Hi @Steven Segal, I am a local lender here in Puerto Rico and can address some of your questions. 

Finding data for comps online can be difficult. The MLS is here and continues to improve, but as you have seen it isn't a good resource to utilize especially outside of the metro area. I think here it is very important to select a specific area of the island to concentrate on. PR has a vast array of opportunities but presently I think to make a sound investment decision it requires boots on ground to get a feel for the specific town or area you find most appealing and marketable and do your own research there with professionals in the area ( real estate agents, attorneys, property managers etc). It takes a little more leg work and more patience than you would possibly ever image ( as overall true customer service is a bit difficult to find......but is here) however there are multiple deals to be found.

Prices vary depending on location. I basically cover the entire main island including our two main neighboring islands of Vieques and Culebra. Property Values as a whole I feel have stayed steady over the past 12 months even with the storm. In the immediate aftermath of the hurricane there were a number of very motivated sellers ( and there still are many today) that unloaded their properties at superior discounts, you also have a wide range of bank owned properties here that are also available at a supreme discount, but again these deals aren't easy to uncover. Some tourist areas I feel have seen an increase in value over the past year, but with a lack of a strong MLS its basically a matter of "how much are you willing to pay"....name your price and see what the seller will accept regardless of the list price.

Banks do lend here, there is not a wide range of products to offer such as in the states but many of the same basic loan programs ( 30,15,10 YR FIXED Conventional , FHA, VA,) exist. Rates are a bit higher than you would see in the states, and depending on the state you are coming from closing costs may be a bit higher than what you would see stateside.

I'll end with this though, from an investor stand point I feel short term rentals are dominating the market here. AirBnb and other similar options are basically what all of my clientele  are purchasing properties to utilize  these days. Typically multi-units in close proximity to the beach or condos on the beach have been the most popular. Its becoming easier now to get the rental data on specific areas and the tourists are coming back. There are also a number of tax incentives that are bringing more small business owners to actually consider relocating to  the island ( and they all need to rent prior to finding the place they want to  permanently reside in and a number of people that left immediately after the storm are returning as well. 

All in all I feel the current opportunities as well as the future potential far outweigh the risks of re investing here. 

I wish you much success if you do end up pursing something here and know you have a resource to turn to .

Hi @Nerissa Rivera..Im a local mortgage banker here in PR and I live in Camuy. A great real estate company for the area is Universal Properties, https://www.universalpropertiespr.com

The owner's name is Miguel Ortiz (English is no issue) and the office is in Hatillo. He is i feel one of the premier reo agents on the island and would be an excellent resource for the areas you are looking for help in!!

@William Bahn, looks like you are getting a good dose of what "island time" is in relation to response time from the brokers.  True "buyer" agents are few and far between here so its best to have a targeted plan of attack and unfortunately it may involve being on island during one of your visits to get things accomplished .  Do you have a particular part of the island that a majority of the properties on your list are? If so I would try to focus on those first, try to contact the listing broker whose name you see pop up the most and get something set up with them for a few showings..Once you are here and they see you are a serious buyer you will find things will go a bit smoother. You can then show them your list they may be able to point you in the right direction for additional contacts etc.  

Saludos @ Hector  I Rodriguez Montanez.. Sorry to hear about the issues you are having.. I'm an RE  investor as well....but by day I'm a mortgage banker here in beautiful Puerto Rico. I'm more of a correspondent lender so I work with ( but not for) the big banks here on the island but offer a bit more personal service ( as its very easy for clients of the big banks to be treated more like numbers than actual clients).  My company also has a direct relationship with Fannie Mae so we try and stay away from the big banks if at all possible.  That being said, to me it sounds like the initial $670 fee you were charged was the " Initial Deposit" Here in PR ( and many places in the states as well) lenders charge a fee once you are under contract on a property to cover the initial expenses such as the Appraisal, Plot Plan ( in PR these are mini-surveys on single and multi-family homes), and the Estudio de Titulo ( title search).  You should have been provided with a Loan Estimate that has these items broken down and itemized and the bank rep should be able to tell you exactly what the $670 is going towards....but it should not be for just the appraisal (unless you are buying on one of neighboring islands...but that doesn't sound like the case here).  

Since the first transaction didn't go through you will unfortunately have to pay for the same services ( appraisal, plot plan, title) all over again.  I will say that depending on the vendors being used, each back will have a different set of fees for the same services ($670 does seem a bit high though if you are buying in the metro area here....unless you are buying a huge 2 -4 unit home).  

VA can be a bit tricky here in PR. I get calls often from people that had issues at other institutions here often. I can 't always promise the outcome you want but I assure you that you won't be in the dark about what is happening with your transaction.. Feel free to private message me if you need additional help or have questions as I know it can be difficult to get answers from bank reps.

....oh and ESP means Especially:)

Take care!!!

@ Orlando Diaz, by day I'm a mortgage banker here in PR , we built a property here to live in years ago and we recently just purchased one (beach condo in Isabela).  I primarily work with people from the states looking to invest on the West side ( Rincon, Aguadilla, Isabela etc) and also Vieques.  I now spend a lot of time in Isabela and   would be happy to answer any questions you have about the landscape on the west side of the island or even meet up when you are in town.    Just let me know

@Rebecca Cramer i am a local lender here and deal primarily with people from the states looking to invest in RE here on the island.  Not a day goes by that i don't hear the words " Airbnb" from my customers. I dont personally track their bookings stats after we close, but i know many have had success. I also agree that its too early to accurately gage the tourism market now as yes im sure their is  skepticism based on what is still being reported by some news outlets on the post maria conditions here but also this time of year is historically considered a down time for tourism in  areas like Rincon.  As we near the end of 2018 and hit the winter months of 2019 i think owners will see their calendars fill up a bit more.

There are also still many people on the island for non-tourist activities  ( be it Fema, temp job relocation, etc) that are utilizing short term rentals exclusively  and this includes areas not normally frequented by your avg vacationer so it can be tough to gage stats. 

I would highly recommend paying a visit to get a feel for how things are currently.

Joe Homs, great post. I live here in Puerto Rico not far from your father's ranch just off Carr 129 close to the  Camuy caves. You are spot on about your description of some of the town squares and business sectors of the area you visited...especially Arecibo. I have to say that even prior to the storm the conditions were not favorable there. The economy is to blame but local politics have played a role in the demise of Arecibo as well.

I'm not sure how long your most recent visit was or when you are planning your next trip, but I do hope you get a chance to view some of the other " non tourist" areas as you may be pleasantly surprised at the resurgence (albeit gradual) of some of the surrounding towns.

I've been a resident here now for the past 4 years and I currently work as  a lender at a local mortgage bank and also am now getting more involved with RE investing here. I've made a number of connections with real estate agents and attorneys over the past few years here and feel there  is  tremendous potential on this side of the island especially on the real estate front.

Prices are great especially for buy and hold scenarios and inventory is not an issue. It does take time and patience to maneuver through the system but it is very doable with a few connections and an open mind.

The storm was a tragic event and I too hope we don't have to experience anything quite like that again, but it has also in my opinion allowed a large group of people (power crews, relief volunteers just to name a few) that may not have ever ventured here an opportunity to experience this paradise first hand. Many locals that left due to power issues,  health etc are coming back. Young entrepreneurs and business owners are wanting to take advantage of the tax breaks....and many of these groups have an interest in RE investing.

There are a number of opportunities here and I expect the trend to continue. 

I have a list I can email you (BP doesn't allow phone numbers to get posted on the threads)..   Shoot me the best email address for you  and I can send it over