What We Do

Emerging Terrains’ “ETI” creates and manages real estate investments. These are primarily investments in raw land in the growing emerging markets of the world. We recognize that people invest in real estate as a security strategy, for growth, and as a tax planning strategy.

Our corporation has established a base of operations in Panama for creating investment opportunities in the emerging economies of Latin America. We’re currently investing in the Republic of Panama.

Why Invest in Real Estate?

We see three motivations and goals for investing in real estate.

1. As a security strategy that does not tolerate inordinate risk. Some real estate investment is motivated by a desire to convert financial capital to real estate to hold and maintain wealth. For these investments, the investor draws on that part of his investment capital which has been allocated either to very or reasonably secure investments.

2. As a growth strategy that tolerates risk. Some real estate investments provide dramatic capital appreciation. For these investments, the investor draws on that part of his investment capital allocated for higher to highrisk investment.

3. As a tax strategy. Some real estate investments are motivated by tax advantages. Investing in real estate for tax reasons is usually encouraged by a tax professional for investments created by a tax professional. The investor participates in these after analyzing how the tax aspects of the investment impact the cash return or the general tax position.

This document explains why we do this and how you can participate .

Realization about related, yet relatively independent, real estate valuation cycles

Several years ago, we were surprised to discern two changes in regional and global real estate investment dynamics.

First, USA real estate was becoming far less secure as an investment. USA real estate investment had moved from its traditional stature as an investment arena characterized by security to a stature of being generally an unacceptable investment risk.

Second, USA real estate provided far less capital appreciation. In short, we discerned USA real estate was on the wrong side of the appreciation/depreciation cycle.

The USA real estate market risk was increasing while the return was decreasing.

At the same time, we were exposed to associates who were successfully investing in emerging real estate markets in Latin America. We realized something important: Globally, real estate markets exist in valuation cycles which are often correlated to USA markets, but which also possess characteristics relatively independent of those in the USA.

At that time we saw that the USA was at a very bad place in the real estate cycle. However, the real estate valuation cycles in some emerging markets were in different and good phases. Because of this, it was obvious we should move our investment activity out of the USA, at least for a time. We did so in 2006.

The Regional Move

Two changes allowed us to begin investing outside of the United States. One change was psychological, the other logistical.

1. Psychologically

We decided to change from thinking of the economy as a national, United States phenomenon to realizing the economy is a global phenomenon.

We recognized that if we limited ourselves to investing in one regional real estate market we were negatively bound to the cycles of that market. However, if we were willing to assess real estate investment globally, investment opportunity expanded exponentially. Furthermore, opportunities for managing security and opportunity in investment grew exponentially.

We saw clearly that as regional cycles move more negatively in one part of the globe, we could move our investment activity into regions enjoying far different real estate cycles.

2. Physical

In order to take advantage of the opportunity given by our revised thinking on real estate we had to be willing to physically cross a national border to do business. So, we closed down our USA real estate activities and moved our business base to Panama the center of the Americas.

We’ve Identified two Types of Opportunity

Our thinking has become increasingly clear. We’re creating opportunities to invest in two classes of real estate:

Capital Preservation

First, we intentionally create “Capital Preservation Investment Opportunities” Some portion of an investment portfolio is for holding wealth in a form that, when compared to other forms of holding assets, is unlikely to depreciate or be lost.

We intentionally locate real estate investments in the secure investment position of an investment portfolio. The criterion for these investments is that the investment is very unlikely to depreciate. We pay special attention to the stability of the valuation of the asset, and the risk of managing the holding title to the asset.

Capital Appreciation

Secondly, we intentionally create Capital Appreciation Investment Opportunities. Investment for growth involves investing in cycles of valuation change. In our model, real estate investment involves comprehending the state of cycles of real estate appreciation that are occurring on the globe. We then gain a physical business presence in those markets, buy early in the appreciation stage of those cycles, and manage the opportunity pending liquidation of the investment.

We invest in raw land

As for emerging markets, the most marked risk relates to managing the asset post-acquisition. Therefore, we invest in a form of real estate that requires the least management. We invest in raw land, and hold the investment in that form. When doing this, management solely consists in the preservation of title and maintaining security of the land over a period of five years.