100% return on Brazil Investment

[Golfingworld]

Claire's been in thebank for three weeks trying to get her profit out!

 

[JMBroad]

Hi I am interested in buying raw land in N-East Brazil. Great if you can share the details and agent. Which area did you buy it? I live in Asia if you need any advice for this part of the world.

Are you buying as an investment or to spend some time out there yourself on holiday?

Aracaju may well be a nice location if you want to go on holiday and are looking for something where you can experience lovely natural scenery and the Brazilian lifestyle.

However if you are looking at it from an investment point of view, I fail to see the exit strategy. Aracajú has almost no tourism at all so it's tough to see who you are going to be able to sell to and when.

From an investment point of view, I'd recommend doing a lot of your own research, which will probably end up pointing you in the direction of either Natal, Fortaleza, Bahia or even Recife. Aracaju may become a possibility in the distant future but for now it's too far behind. Which makes it ideal for someone looking for the Brazilian lifestyle.

 

[RalphJ]

Are you buying as an investment or to spend some time out there yourself on holiday?

Aracaju may well be a nice location if you want to go on holiday and are looking for something where you can experience lovely natural scenery and the Brazilian lifestyle.

However if you are looking at it from an investment point of view, I fail to see the exit strategy. Aracajú has almost no tourism at all so it's tough to see who you are going to be able to sell to and when.

From an investment point of view, I'd recommend doing a lot of your own research, which will probably end up pointing you in the direction of either Natal, Fortaleza, Bahia or even Recife. Aracaju may become a possibility in the distant future but for now it's too far behind. Which makes it ideal for someone looking for the Brazilian lifestyle.

JM....that's really presumptious on your part seeing you've never even visited the place. You may be able to see how many international tourist arrivals there are but are you taking into account national tourists? Also, are you taking into account that Salvador is 300 km's to the south connected to Aracaju by one of the northeasts best roads and currently they are constructing a bridge which will be finished in Feb. of 2008 that is making it even closer for those in Salvador to arrive in Aracaju? And that foreign investors in Salvador and Bahia have now extended themselves all the way to the Sergipe/Bahian border?

You can take it from someone that has lived here for the last decade.....Aracaju has been growing at a tremendous rate over the last 4 years and has attracted some major international and national investment. Property prices in Aracaju over the last year have increased by a minimum of 35%. I'm very good friends with the family that owns a large percentage of the beachfront land here, I was just at their 480 hectare farm in Bahia this past Saturday, they certainly know what they're talking about when it comes to land in this area of Brazil as they've owned it for decades....and they wouldn't sell their land right now in Aracaju unless someone gave them a ridiculous offer.....they know what is just starting to happen. According to them in 3-5 years someone will be able to name their price. Believe me, soon I'll have my approvals in hand and it won't matter to me if I build or not as I know that in a few years I'll be able to sell my beachfront land with approvals for a very hefty sum....and to brazilians!

Tell me, how does someone invest in Brazil at gringo prices and make money if he can't sell to Brazilians for if he does he'll take a 20-30% loss? Because that's exactly what happens in most cases with foreign agents selling property in Brazil. Believe me, I can send you to anyone of 50 English that I know that have purchased properties here and they were sold at prices so above and beyond the actual market prices at the time that 3-5 years ago they paid 180,000 reais for their homes and TODAY trying to sell for 130,000 reias! People don't buy from foreign agents at Brazilian prices because the foreign agents don't get brazilian prices!

A group of Belgiums on the Sergipe/Bahia border on linha verde has just sold 38 houses, without advertisting, for 800,000 reais a piece. And it's not even close to the ocean, and 10-15 minutes from the nearest town. There's not ONE brazilian working on their site....all Germans and Belgiums!

 

[JMBroad]

Yes, I was taking into consideration all tourism not just International arrivals. While it may well be a fantastic place to live and I'm sure there are great investment opportunities to be had, it's a much more long term purely to the fact that Aracajú has less than half of the domestic tourism of Natal and the international tourism is practically non-existant.

I would have thought, with you being so overly critical of the investment market in Natal that you would be slightly more realistic about the situation where your own development is located? I mean everything you have mentioned regarding your concerns about the market in Natal must apply even more to Aracajú? If Natal won't get an international airport, I'm sure this will have a very negative impact on Aracajú who would also benefit from the increase in tourism?

With regards to foreign agents not getting Brazilian prices, that is purely because they don't do enough research to get those prices

 

[RalphJ]

Yes, I was taking into consideration all tourism not just International arrivals. While it may well be a fantastic place to live and I'm sure there are great investment opportunities to be had, it's a much more long term purely to the fact that Aracajú has less than half of the domestic tourism of Natal and the international tourism is practically non-existant.

I would have thought, with you being so overly critical of the investment market in Natal that you would be slightly more realistic about the situation where your own development is located? I mean everything you have mentioned regarding your concerns about the market in Natal must apply even more to Aracajú? If Natal won't get an international airport, I'm sure this will have a very negative impact on Aracajú who would also benefit from the increase in tourism?

With regards to foreign agents not getting Brazilian prices, that is purely because they don't do enough research to get those prices

Aracaju isn't, and never has been, based on international tourism to support it's economy! If it comes that's great, but if it doesn't it's no huge ordeal...although we are starting to get some. And I'm very realistic about the numbers and comments I've made here. Believe me, I've been working in property here in Aracaju for the last 5 years, day in, day out. For someone to say that Aracaju is not a good investment, short term or long, as long as they're able to achieve actual market prices, doesn't know what he's talking about. Matter of fact, at this moment in time, if someone is willing to invest and hold it for at least 4-5 years, I think it's one of the best investments in this country. It's called "market timing", and Aracaju is getting ready to explode.

And I must disagree concerning foreign agents not getting brazilian prices because they didn't "research". That is normally not the case. It's because they're foreigners, they don't speak the language, they don't have the local relationships, AND they don't do the research.

And that's a fact my friend.

 

[JMBroad]

Aracaju isn't, and never has been, based on international tourism to support it's economy! If it comes that's great, but if it doesn't it's no huge ordeal...although we are starting to get some. And I'm very realistic about the numbers and comments I've made here. Believe me, I've been working in property here in Aracaju for the last 5 years, day in, day out. For someone to say that Aracaju is not a good investment, short term or long, as long as they're able to achieve actual market prices, doesn't know what he's talking about. Matter of fact, at this moment in time, if someone is willing to invest and hold it for at least 4-5 years, I think it's one of the best investments in this country. It's called "market timing", and Aracaju is getting ready to explode.

And I must disagree concerning foreign agents not getting brazilian prices because they didn't "research". That is normally not the case. It's because they're foreigners, they don't speak the language, they don't have the local relationships, AND they don't do the research.

And that's a fact my friend.

Totally agree. Luckily, I do speak the language, do have the local relationships, not only on a land owner and governmental level but also on a developer level and agent level and have done the research so I don't agree that it can't be done.

Sergipe had the highest GDP growth in the Northeast from 2000 to 2005, even higher than RN, which was the second highest. Both RN and SE were way above the average for both the country and the Northeast region. The reason for this massive growth was due to the natural resources found in the region during this period.

However in property as you know as well as I do, one of the main factors to consider is your exit strategy. With Aracajú it is still a long way off compared to the top four tourist (domestic and international) destinations of Rio Grande do Norte, Bahia, Ceará and even Pernambuco (although Sergipe welcomes more domestic arrivals per year compared to Pernambuco, when looking at combined Domestic and International it is still quite far behind).

We have been discussing on the forums for a while now the possibility of arrivals numbers increasing overall in the Northeast. If the Northeast as a whole won't necessarily welcome more people per annum, which seems to be your point of view, why would Aracajú show such an increase?

 

[RalphJ]

Totally agree. Luckily, I do speak the language, do have the local relationships, not only on a land owner and governmental level but also on a developer level and agent level and have done the research so I don't agree that it can't be done.

Sergipe had the highest GDP growth in the Northeast from 2000 to 2005, even higher than RN, which was the second highest. Both RN and SE were way above the average for both the country and the Northeast region. The reason for this massive growth was due to the natural resources found in the region during this period.

However in property as you know as well as I do, one of the main factors to consider is your exit strategy. With Aracajú it is still a long way off compared to the top four tourist (domestic and international) destinations of Rio Grande do Norte, Bahia, Ceará and even Pernambuco (although Sergipe welcomes more domestic arrivals per year compared to Pernambuco, when looking at combined Domestic and International it is still quite far behind).

We have been discussing on the forums for a while now the possibility of arrivals numbers increasing overall in the Northeast. If the Northeast as a whole won't necessarily welcome more people per annum, which seems to be your point of view, why would Aracajú show such an increase?

Aracaju's proximity to Salvador and Bahia, which is by far and away the leader in foreign investment in the northeast. Many fly into Salvador and then either take a 25 minute flight to Aracaju, or jump in a car and drive 3 hours on one of the northeast's best roads....linha verde. As I stated, Europeans have invaded Salvador to such a degree that they are now going north on linha verde and have came all the way to the Bahia/Sergipe border at this time.

 

[Golfingworld]

I am an amateur at this game but it seems pretty clear to me..there are three markets:-
Gringo to gringo highest prices
Brasilian to Gringo silly prices
Brasilian to Brasilian or sensible Gringo low prices.
The stupid Gringo buys off another non Brasil based Gringo the clever one goes local.
As for tourism, the numbers are minute wherever you go except maybe Rio and Bahia and again there are two distinct markets Gringo and Brasilian.
Percentage increase figures are deceptive as they don't show the real volume numbers which are small even compared to places like Dominican Republic or Barbados.
One thing is for sure, anyone who buys in a mega scale off plan betwen Natal and Fortaleza will pay top dollar prices. If anyone believes that their NE Brazilian home will inflate in price like The Costas in Spain did are living in a dream world. What will happen is that the naive who bought at top dollar prices (the Gringo market) will realise that prices cannot rise as much as they thought and there will be a dropout which will bring a market correction...exactly what is happening in Spain today!

 

[robh]

Whilst I am sure this happens not all agents are like that. We also sell to the occasional Brazilian as we have some exclusive developments, but the main point I would make is that a lot of our developments are also marketed and sold in large numbers to Brazilians at exactly the same price as we sell them for.

I am an amateur at this game but it seems pretty clear to me..there are three markets:-
Gringo to gringo highest prices
Brasilian to Gringo silly prices
Brasilian to Brasilian or sensible Gringo low prices.
The stupid Gringo buys off another non Brasil based Gringo the clever one goes local.
As for tourism, the numbers are minute wherever you go except maybe Rio and Bahia and again there are two distinct markets Gringo and Brasilian.
Percentage increase figures are deceptive as they don't show the real volume numbers which are small even compared to places like Dominican Republic or Barbados.
One thing is for sure, anyone who buys in a mega scale off plan betwen Natal and Fortaleza will pay top dollar prices. If anyone believes that their NE Brazilian home will inflate in price like The Costas in Spain did are living in a dream world. What will happen is that the naive who bought at top dollar prices (the Gringo market) will realise that prices cannot rise as much as they thought and there will be a dropout which will bring a market correction...exactly what is happening in Spain today!

 

[JMBroad]

Actually I think the Stupid Gringo thinks he can "just wing it" and goes out and buys a property himself from a builder who gives him 20% off the price when asked. He does no checks to see if the property is legal or even if the person he's buying it from is the owner of the land and is legally allowed to sell it. Then he attempts to convince others to do the same.

 

[PAUL-brasil]

I was informed about ZEN... I took 2 odd weeks before deciding and the site says all 64 plots for phase 1 were sold out.

Still there are other channels still advertising on initial/ prelaunch discounted prices !! and probably a little difference in the number of plots in phase 1...

Have I missed something or are these units still available through some sellers ?
Gee

Hi Gee,
There s about another 30 odd unrelated threads to ZEN project that you failed to add the above message to!! LOL!

 

[JMBroad]

Hi Gee,
There s about another 30 odd unrelated threads to ZEN project that you failed to add the above message to!! LOL!

Hehehe it was a bit disconcerting to get 6 emails saying that Gee had an important question

As for the answer - I have no idea but Wolfgang seemed to know the answer.

 

[Gee69]

oh yeah... it works ye know

(Now this is gonna trigger a messge too.. hehe..)

 

[Simon Eaton]

this is all so great.

by the way, 37.6 bn was not a record FDI. Italy had nearly 50. Uk nearly 100 etc.

I think you will find it is the highest for an emerging market last year.

I suggest you keep studying for that PHD ha!!!

Not that you do not have a point. Goldman sachs recently stated that the G7 shud no longer be able to meet without brazil to discuss global economics as they are becoming as pivotal.

I know brazil is a great place. But what bait! AND how bait!

All the best selling your invisible land. Ill pay you 30% more than nothing. I promise. Anyone else want some?

at least you get a smile.

 

[Dotty]

Over inflated imagination

land has not gone up 30% in 6 months.Land is worth only what someone will pay for it in Brazil not what we want it to be.Also,may I add that you sound inexperienced to me because the big guns bought 10 years ago not now or in the future!

Hi i am interested in meeting people who have bought in Brazil. I purchased 4 plots of land and have seen 30% growth in six months. I really recommend that anyone who is interested in making a lot of capital growth invest in land in the north east of Brazil. I can suggest an agent who I used.

Is anyone interested?

 

[Dotty]

what do you know??

Brazil emerged years ago.Then was the time to invest.Not now!I can see you are not Brazilian and have no experience of the Brazilian market or regulations,despite having a masters(which does not count for very much)but asfar as land prices going up 30% go it would depend on beachfront location and where it is located.Normally the plots have hunderds more too. The problem with Brazil is where,who and what you are buying.There are plenty of unfinished blocks ,abandined here in Natal.Good luck.

Perhaps Mr Golfworld can inform us where he has collected his facts. It is my job to research emerging markets, I have a masters in property investment and am working towards my PHD in property investment, my area of research is emerging markets. I have study the development of markets for many years and I believe that Brazil is an excellent investment. Last year Foreign Direct Investment into Brazil reached 37.6 billion, which is the record breaking investment into one country in one year.

I am sure I will have no regrets.

 

[JMBroad]

Dotty,

Perhaps it would help us if you gave us a bit of background on yourself - I assume from your posts that you are currently living in Natal?

 

[Dotty]

I am well informed in property because I am an old time investor and have an interest in it,but (not working in it)so I found this site a fascinating and great way to communicate. So decided to join.

Dotty,

Perhaps it would help us if you gave us a bit of background on yourself - I assume from your posts that you are currently living in Natal?

 

[JMBroad]

Well welcome but take it easy - every time you post everyone on the forums gets an email letting us know, so we all just got about 35 emails reminding us to come say hi to you

Giving feedback is good, feedback from someone on the ground is even better but some things don't need to be repeated three times in the same thread right after each other

 

[Dotty]

There are not 100% returns on properties in Natal .Thats not the case as there were 800% returns 5 yrs + ago,but now there is so much going up and down right now in terms of market confidence and boom bust,the overseas market say its a great place to invest but the amount thats not happening is frightening and just speculation.As for resales along a coast miles away,very difficult as a Brazilian would not buy and for a foreigner its a nightmare for them ,plus the high costs of maintaining properties and managing them too!