Acquisition Strategies:

Scouting Requires a Local and Qualified Scout

Our property acquisition strategies are distinct from our market selection strategies. That is, once we’ve selected a market, we need to begin acquiring property.

Real estate markets in Latin America are still quite inefficient. It is this inefficiency that creates both the opportunity and risk in the investment. The process of acquiring investment involves the creation of relationships with local owners that help us find property that fits into our broader investment strategy.

What is clear is that this information is only available if we are on the ground in these remotest parts of the world, where the opportunities exist.

As we’ve said in this section of our site one of the primary qualities needed for success in emerging market real estate is that the enterprise must possess a highly professional, yet hearty entrepreneur on the ground scouting opportunities in some of the most remote and travel-challenged regions of the world.

Once we’ve gotten ourselves on the ground in a remote region, we make friends with the locals, including local missionaries and peace corp workers, real estate brokers and local attorneys, and finally local private investigators. We then carefully choose and manage those who comb the country looking for that one excellent deal out of the hundred that present themselves.

As we filter the properties we’ve located, we’re looking for a property that is highly price misaligned. We’re also looking for a property that we think can be re-sold in a reasonable period. We define a reasonable period as within a year to within 5 years.

An Opportunity: Local Market Inefficiencies

Real estate markets in Latin America are still quite inefficient. These inefficiencies create both the opportunities and risks. In order to make the best acquisitions, it is vitally important that the buyer be armed with all information necessary to execute a great purchase.

Frequently, international evaluations of property values differ greatly from those valuations on the ground. In order to exploit this phenomena, we have full time, local private investigators that have been specially trained in property acquisitions.

These investigators continually communicate with owners in markets we have chosen, so that when the owner is ready to sell, we are the first choice. Our investigators are experts at uncovering opportunities for advantageous purchases.

An Opportunity: Reposition Land

Find land that is currently valued low because people don’t know how to use it, establish a high-value use for the land and market it according to the higher valuation.

For example, much of the land in Panama is still valued based on its agricultural uses. By changing the end use of a property, we are often able to immediately change the value of the property. Therefore, we search for opportunities for inefficiencies in land usage valuations.

Buy Before the Masses Arrive

Of course, the greatest opportunities exist before mass investment starts to hit a region. We focus on getting to the places most difficult to find. These are often the most inconvenient and inaccessible geographical areas in emerging markets.

Commonly, these opportunities relate to a region currently without roads, but which we discover will soon have a road. For example, we may learn that a road is coming that will convert an undiscovered beach to the next tourist destination. Other examples include the discovery of an impending zoning change or maybe we learn that a large resort is about to be built in the area, thereby changing property values.

There are many structural and regional development-related changes that cause property values to alter rapidly. We monitor these changes very closely.