I recently had a long chat with one of the most successful real estate investors I've ever met. As I often do, I wanted to get a real understanding of the "Why?" he did real estate and what he wanted to accomplish for himself by reaching financial freedom.
You see, I am firmly convinced of the truth that "If you have a big enough 'Why?' to do something, the 'How?' will reveal itself to you. This gentleman had some good things to say about the concept and completely opened my mind up to even deeper levels of understanding about the terms "success" and "freedom".
Listen, if you're serious about making real estate investing an ultra-successful career for you, you have to go even further than just having investing in real estate be what you do for a living.
It has to become a lifestyle. He threw my questions right back at me and we had some great give-and-take and it was like you could really feel that chemistry that comes into play when entrepreneurs are talking about their passion of investing in real estate.
For him, it came down to asking this question, which fans of Tony Robbins should recognize its like:
"If I had unlimited time, unlimited money, unlimited resources and encouragement, unlimited tools and teaching, unlimited support from friends and family, and unlimited belief in myself...what would I do? Who would I be?"
Most of us would do the things that are passionate about, right?
He was able early on to answer that he wanted to be a real estate investor who helped people solve problems and made money by investing in real estate. What he shared with me, however, is that he didn't self-identify as a "real estate investor" until many, many years later.
Until that moment, years later, when he claimed and began now to internalize the belief that "I am a real estate investor", he was a hobbyist, a dabbler, a dreamer.
He had this experience of self-actualization at a real estate seminar where one of the participants asked the speaker "How do I really know that I'm a real estate investor?"
The speaker responded that "You know you're a true investor when you can't NOT invest!"
He then went on to tell me that during the same seminar someone, obviously someone without a very strong "Why?" or motivation yet to become successful, asked the speaker "How can I find time in my busy schedule to do this business?"
The looked at this questioner with the same patience and understanding that showed that this was the hundredth time the speaker had fielded this question, and said in effect "If you're a real estate investor, you do not find time to invest and do this business...if you're serious about this business you make time to do it."
After my incredibly successful investor friend let that sink into him and he found that he could really grasp hold of those two simple concepts, he realized then and there that he'd always been trying to FIND the time to invest and take the necessary actions to get his business going. For all of his "career" to that point he had been finding and taking that time to do his "business" AFTER other things that his attention and time expenditures PROVED were MORE important to him than becoming successful with real estate.
The difference, after he had let these two concepts sink into him and really started to understand it and, most importantly, APPLY his understanding to his thought patterns and daily routines...
...the difference was that he did not just IGNORE the real-world practical matters that NEED to be a part of someone's life (like for example to the beginning real estate investor, a steady income from a stable source to provide bills' money and put food on the table) but other than that, he ASSURED himself that he would always MAKE time to create the life he wanted that was in answer to his compelling "Why?" to become successful- and he did it by taking solid, CONSISTENT actions and gaining unstoppable momentum.
I think that these 2 concepts- of IDENTITY and claiming that you ARE what you want to be, and CONSISTENCY in finding the time necessary to DO what you ARE- applies to anyone wishing to turn a dream into a reality, whether it is to become a successful real estate investor or whatever, be it a published author, big ticket actress, or even just someone who wants to become the "World's Best Dad".
Just substitute whatever it is that you're passionate about for finding time to do "real estate investing" and knowing how you are really a "real estate investor?" and you're on your way, if real estate investing is not your passion.
I understand for many people it's NOT. Many people want to USE the VEHICLE of real estate to take them to a place where you have the freedom and the luxury of time, and you have been able to achieve the financial security and independence to do what you want when you want.
Now, with me, it's writing. I'm passionate about writing, and will write whether or not I get paid for it. It's not just what I DO, but it's who I AM.
How would you answer my friend's question...if you had everything you ever needed already ACCOMPLISHED by investing in real estate and building a positive and successful lifestyle with plenty of passive income coming in every week?
What would YOU do? Who would you BE?
What's your dream? What's YOUR true passion?
What will you do with the extraordinary wealth you can accumulate in real estate?
Now I want you to write down what you are passionate about. You are passionate about something besides money, right? ;) I certainly hope so! If you aren't, it's time to ask yourself a good hard question and take a long look at yourself and find out why not!
Maybe your answer is like mine, that wealth and income from real estate investing can give me the freedom to write whenever I want, to get paid or not get paid but to have the flexibility for it not to MATTER. Maybe you want to spend more time with your family. Maybe you want to escape the 9 to 5 grind and make sure that you never miss another Little League game. Maybe you want to spend time golfing, fishing, or sailing, or learning the intricacies of Thai cuisine.
Maybe in financial freedom you'd want to travel all over the world (of course, you'd at least LOOK at real estate while you're there right? That's called taking a PAYcation instead of a VACATION and you need to ask your tax professional about THAT little gift from Uncle Sam).
Whatever your "Why?" is take a moment now and write it down! Commit this to paper. It's important!
Now, here's where my friend and I agree that most people stop. This is hard. In fact, it's often a question that if you give it the thought and meditation time that it deserves just might make you cry or knock you flat on your backside. Asking this next question you're about to ask yourself can be downright HUMBLING or even, in some cases, extremely UPSETTING. But, you GOTTA do it!
Now, write down your well-thought answers to this question:
Why aren't you living this life and doing all these things you desire NOW? If you're not close, what would it take for you to be able to live your life of destiny and dreams?
Think this is a silly exercise? Just ask yourself, "Am I getting the results right now that I want out of my life?" If you're not, well...it might be wise to consider some opinions. ;)
Just remember, without a map there is no treasure! Your "Why?" is the map that will keep you on track towards gaining momentum to becoming the IDENTITY of a true entrepreneur and professional real estate investor. And it keeping this in mind will PUSH you into taking all the actions necessary, in a CONSISTENT manner, to achieving everything it is that, until you WRITE IT DOWN, you only SAY that you really want.
The word is out: "Nicaragua is the new Costa Rica" but with prices 45-55% lower than its southern neighbor. Nicaragua is well and truly bouncing back from its troubled and often misunderstood past and beginning to transform into a sought-after investment and tourism destination. Misconceptions still persist, but in many ways that only increases the opportunity that Nicaragua offers.
Nicaragua's democratically elected government is showing a great capacity to reform in line with its commitment to a free-market economy. The country is booming and tourism is now the number-one industry, increasing by over 19% in 2005 even considering a record-breaking year in 2004. There is a real buzz in the air for this land of opportunity. Whether you are looking for a retirement or vacation destination, a place to start a business or a place to invest for the future, Nicaragua is definitely worth considering.
How much is good real estate information worth?
Market knowledge based on fact and base trends, rather than exaggeration and hype (in both directions) can make the difference between a good investment and a great one. The aim of this article is to capture the essence of the successful real estate investor in Nicaragua. We have consolidated the experience of hundreds of investors and identified seven success strategies for successful real estate investing in Nicaragua.
We hope that this encourages more investors into taking the first step in exploring real estate opportunities outside their home countries with confidence. Although imbued with a Nicaraguan flavor for the purposes of this article, many of the principles and steps highlighted in this article will also hold true in other investment destinations and contexts.
Seven success strategies for real estate investing in Nicaragua
1. Understand the link between tourism and real estate
Tourism brought in almost $200 million in 2005, according to the Nicaraguan government, more than any other single industry in its $5 billion economy. Current projections indicate that by 2007 there will be more than one million visitors to the country. The profile of visitors has shown a marked shift from budget tourists to more affluent and sophisticated travellers and higher-end hotels in tourist areas show consistently high occupancy.
There is strong relationship between leisure and vocational markets and the market for second homes and retirement homes. The areas attracting the most tourism are also generating the greatest levels of real estate activity. For certain real estate products, the link between tourism and real estate is particularly direct and immediate. Pelican Eyes...Piedras y Olas the highest quality hotel in San Juan del Sur, boasting occupancy levels well above industry standards since it opened, offers the possibility for investors to purchase a villa or duplex unit and participate in the revenues generated by the hotel.
2. Know where you are in a property cycle
Nicaragua has seen considerable price rises in the past few years. We have calculated percentage price changes for serviced lots between 2002 and 2005 for seven well known real estate developments on the Pacific that have been active over this period (most developments are more recent) and are still selling property. Over this period prices have risen by an average of 87%. Unimproved colonial homes in Granada have been rising by around 25% per year for the past three years. These price rises indicate that Nicaragua is now on the map as an investment destination, the positive price trend has started, but we are only just seeing the beginnings of a "second wave" of investors: the pre-retirement and retirement market.
Speculators still make up a considerable proportion of investors but an increasing number of pre-retirement / retirement and second home buyers are emerging. Much has been made of the 'baby boomer' generation when analyzing future buying trends in many markets worldwide. Baby boomers began turning 50 in 1996 and 78 million of them began to enter their period of highest earnings and greatest discretionary dollars. It is said that over the next 20 years the baby boomer generation will likely constitute the largest potential market ever for real estate products, especially second homes and timeshare/fractional ownership offerings.
The real estate product on offer has also evolved from simple lot sales (sold mainly to speculative buyers) to turnkey products with sophisticated facilities and services for longer term investors and the retirement market. A consistent growth in condominium constructions and sales has been evident for 18 months and is accelerating.
3. Follow trends not events
The bulk of foreign investment into the real estate and tourism sectors in Nicaragua is focused on the south-western part of the country. To take the Pacific coast as an example, in conjunction with Calvet & Associates, we have catalogued over 70 developments on the Pacific marketing to foreign buyers between El Transito and the Costa Rican border. The south-west of the country also includes the colonial town of Granada, Lake Nicaragua and the beautiful Laguna de Apoyo crater lake.
A number of investors are seeking out areas where there is less activity, for example beachfront areas further north. The prices may be lower in the northern part of the coastline - but for a reason - and it is important for investors to take this into account before they make an property purchase. The south western coastline has more dramatic geography, whiter sand beaches, richer biodiversity, better surfing, safer swimming areas and cooling lake and ocean breezes and, yes, also more recently investor momentum. This is not to say that there will be no price appreciation and development on beach areas further to the north but that a significant price differential will likely remain into the future.
4. Build a good network
Investors commonly complain of an overload of market information and building a good network will allow you to triangulate and contextualize information that you receive. Not surprisingly, given the excitement about the real estate market, there is a great deal of story telling and exaggeration that goes on. Do your due diligence, work with realtors who know the market, learn from professionals and be skeptical about claims that you can flip your property for 100% more "when the International Living investors come into town in a few weeks."
A solid piece of advice is to buy only what you see. Make up your mind on what you think the inherent value is of the property that you are looking at is. Don't factor in the "new coastal road" the "new airport" the "new Marriott" into the price. Certainly not if you are investing for the short term. Coldwell Banker Nicaragua has a network of lawyers, project managers, master planners and investment analysts who have a long track record of advising investors on real estate acquisition and development in Central America - these are independent third parties who can provide un-emotive grounded advice.
5. Due diligence everything
More specifically, retain competent legal representation and take out title insurance. Nicaragua has a particularly complex title history and some buyers who have not looked deeply enough into the title history of purchased property are now mired in difficult legal problems. A number of real estate developers try and persuade buyers to use their own legal team for property purchasing. Our advice is to employ independent legal advise at least to review (if not draw up) the purchase contract you are signing and check the title history on the property.
Coldwell Banker Nicaragua recommends investors to take out a title insurance policy. Other realtors do not recommend title insurance as the due diligence that ensues can slow down the purchase process and raise difficult questions. Seeking title insurance will force your lawyer to delve many years back into the property history of the property you are purchasing and follow a set of criteria in their reporting. If you are buying raw land parcels outside of a development your due diligence list needs to be longer and will cover infrastructure issues, environmental issues and development permits.
6. Invest with a confidence, develop with a conscience
This is the strap-line of the Nica Dev campaign run by Donn Wilson a developer, entrepreneur and surfer who has made San Juan del Sur his home. Nica Dev recognizes that real estate investors are entering into another country and have an obligation to respect the land, the people and the environment. When you arrive in Nicaragua the impression that you get is of a warmhearted nation that is welcoming to international visitors. In order for this warm feeling to endure into the future, local Nicaraguan also need to benefit from the real estate and tourism activity that is going on in the country.
Las Fincas, a development aligned with the Nica Dev campaign, is designed with sustainable development principles built in. For example a basic solar power setup is provided for everyone who buys and the project runs a series of active community outreach projects introducing highly effective, yet low-cost and low-tech, solutions for cooking and purifying drinking water. Skills and suppliers for low impact construction with elements such as rain water capture, composting and recycling, hard to find 18 months ago, are now readily available in-country. Coldwell Banker Nicaragua is launching its own campaign to generate funds for the Nica Dev fund as well as other projects that our clients are involved in here in Nicaragua. We will be giving our clients the opportunity to contribute to selected projects at the time of closing.
7. Become and expert in investing in real estate in Nicaragua...before you invest
Coldwell Banker Nicaragua Real Estate has launched a series of concise buyer briefings to help investors interested in the real estate market in Nicaragua in their decision making. The briefings highlight real estate hotspots, analyze market trends and set out good value investment opportunities.