I left off Part 1 with a hint of what was to come, a slow descent into Costa Rica real estate. It might be genetic. My Mom was an agent for over 20 years, and at her peak owned 19 rental houses. Luckily, she's also a psychologist. My background was in real estate law, then the savings and loan business. Maybe I felt withdrawal pains, as I sold my condo in Coconut Grove in 2005 at $500 a square foot, or about $5,400 a square meter, insanely above even the most overpriced gringo offerings in Costa Rica. I was a little early on my sale, but I could see the hurricane warnings, and better early than late.
So, we spent time driving around the country, checking out new places every couple of weeks. I strongly recommend Tortuguero, on the Caribbean coast. It's not a real estate play, but a great turtle beach, humid, tropical rainforest, canals bordered by overhanging secondary forest with about 40 years of growth, crocodiles, howler monkeys, a jungle fantasy except it's real. The drive from San Jose is fascinating. It was my first time to experience the dramatic changes in microclimates caused by crossing a tropical mountain range. The temperature dropped from the low 80s in San Jose, down to the 50s at the top of the mountain range, then up to the 90s on the Caribbean coast. And with each change in temperature came a change in weather, and plant life. All clearly felt and seen from the inside of a bus. Wow.
But this is a real estate blog, isn't it?
I started foraying into the western suburbs of Escazu and Santa Ana. Not exactly virgin territory, but wait.
After receiving an education in the gringo price of everything, I fell in love with one of the two best subdivisions in the area. I knew we wanted to build, so we were looking for lots. At that time, I was aware that I did not have enough experience to buy land and develop it for my first investment. I needed to know that infrastructure would not be a problem, and that I could in fact build on what I bought. So that left out raw land, and so-called agricultural subdivisions where every lot is larger than 1 ¼ acres, thereby avoiding a lot of governmental approvals that ultimately protect the buyer.
The highest priced development was Valle del Sol, developed in the Santa Ana valley around a great golf course, with lots starting two years ago at about $200 per square meter . The average lot was about 1200 square meters, a little over a quarter acre, for $240,000. That's $18.58 per square foot. But I'm from Miami ( I mean, Igloolik), so golf course living in the sun didn't appeal to me. The second highest priced development was on a mountain,Villa Real, with prices then starting at $140 per square meter. After looking at a couple dozen lots, I got the joke. Great views on a mountain, gated community, but 1100 square meter lots that on build out would leave you living in a subdivision.
And then opportunity knocked.
After looking at most of the "for sale" lots with my agent, I was pulled over to the side by the mountain's "exclusive" sales agent and told of a "whisper deal". A recently divorced couple owned a gorgeous 5215 square meter lot near the top of the mountain, private road entrance, secluded, with a direct western view toward the Pacific Ocean 40 miles away (on a clear day). If it was not the best lot in the subdivision, then it was the second best. And it could be subdivided into three lots, so we could build three houses, live in one, and sell two. But I had to act fast, because the couple's divorce decree gave each person alternating 90 day periods to sell. The current sale period belonged to the wife, but expired in one week. Then the sale right reverted to the husband for 90 days. The wife was the one who had brought money to the marriage, so her motivation was to sell and be done with it, not necessarily at the highest price. She was asking $115 per square meter.
I had been interviewing architects and contractors for some time, and after over a dozen interviews had found a Costa Rican architect who designed for an Italian builder, with great style and quality. I was confident that I could build a luxury home for about $700 per square meter (then). If I could sell a finished luxury home in that location for about $2,000 per square meter, or maybe $1,800 per square meter after commissions and soft costs, I could build two spec homes totaling 1100 square meters, clear $1.2 million, and have enough left over for the land and a dream home. Been there? I wanted the property.
Next installment....buying the property.