It's been a good 4 - 5 months since my research regarding Obelisk International's project intended for Minha Casa Minha Vida and I just received a notification that someone wanted feedback on what I learned so here's my recollection.
One of my first concerns regarded Manzanares International as one would think you would hire your own attorney, not one recommended by the developer. Manzanares International didn't even have an attorney communicate with me to my knowledge. It was always administrative staff. Every question took at least a week to get a response. After the delay of a few unanswered questions and the "time frame" to move forward from the initial agreement had passed. I know some people will view that document as a promise, but to me it is simply a marketing document used as a psychological tool to get people to move forward, even when they haven't received information they need to make an informed decision so the passage of too much time due to their slow response was simply an annoyance and certainly no reason for me to proceed since critical information was still lacking.
My initial hunch that Manzanares essentially works for Obelisk International was confirmed, at least in my mind, when I received the "due diligence package" which had disclaimers that the information was gathered from government websites, government employees, documents that were handed to them, and other sources. (That's not the exact words, but my recollection.) I almost laughed when I saw that "documents handed to them" were used as one would have no way whatsoever to verify that information. My initial and final conclusions about Manzanares are that they are sending out a mass produced document with spoon fed information provided by Obelisk with some facts likely verified by Manzanares.
A moderator confirmed in a private email that he had worked for Manzanares in Natal doing due diligence for them several years ago, either as an employee or subcontractor. Essentially that gave me a level of comfort that Manzanares is legitimate and would likely raise red flags if they found problems occurring on a large scale. Even though I believe Manzanares to be legitimate, it is still my opinion that their main client is Obelisk International and its Brazilian partner, not the investor.
I did contact an attorney in Fortaleza recommended by an international real estate publication. It boiled down to his costs would be at least $5,000 (USD) plus expenses so the fees could easily have run to $7,000 or more. When compared to the approximately $500 (USD) fee to Manzanares it seemed not worth pursuing in light of what else I had learned.
Naturally two concerns were regarding the legitimacy of the developer (Obelisk International and its Brazilian subsidiary) and builder (M & K). Via searching the internet it appears Obelisk has been around for several years and participated in several developments the latest of which were in Turkey and Brazil. If my memory serves me correctly the development in Turkey ran into many problems due to the collapse of the financial system and buyers unable to obtain loans. I saw some complaints about that dilemma, but it was not caused by Obelisk and the conditions were out of their control. I think I recall reading something to the effect that they were helpful where they could be to help solve the problems caused by the financial crisis. I also learned they participated in building a tall building that is somewhat of a landmark in the Natal area. My conclusion was that Obelisk appears to be legitimate but it is a development company and runs into risks associated with that business, as would any developer.
M & K was a crucial piece of the business as documents indicated special Brazilian governmental permission / qualification was required to build Minha Casa Minha Vida properties. Obelisk sent a link to what appeared to be a Natal newspaper's column mentioning M & K and Manzanares' documentation stated M & K had the special governmental approval. I would have liked to learn a little more about M & K; however what I did learn seemed to indicate they were legitimate.
As fate would have it, when speaking with others about an investment in Brazil I became aware I knew two parties that had a U.S. family member who had married a Brazilian national so I could get some firsthand information from someone other than a salesman. I learned that squatters have more rights in Brazil than they would in other countries. In one case the Brazilian/American couple's family had owned rural property where development had made it more useful and someone else actually build a shoddy building on their property. Apparently they had to go to court (costing $$) to get the intruders off their property and they said they have to pay for the materials of the building that was put illegally on their land. In summary they keep their land but have to pay legal bills and for materials (only) of the building they don't want and was never authorized. They'll also have to pay to tear down the building or provide the labor to tear it down themselves.
This story made me realize that a wily Brazilian may quickly put up a structure on land if they know it has or will likely become valuable since they have some rights - even though they truly have no legal claim. (I understand a legal claim is easy to make simply by having someone provide a deed for the land as the buyer could say he didn't know the seller wasn't the true owner, giving him some basis for his ownership claim.)
Another very big flag was raised when I learned via the internet that a large development in Natal had caused quite a stir when 200 to 300 Europeans (read foreigners) had lost their money because an illegitimate child of the deceased owner was apparently able to present a claim that was upheld in court.
At this point I was comfortable, but not ecstatic, with Obelisk International, M & K Construction and Manzanares International. My great concern was and still is regarding M & K and/or Obelisk holding indisputable or insured title on the land where the development is to be built. To me, this became the critical element as without indisputable and uncontested ownership of the land, the development was at risk.
From this point I told Obelisk personnel I would invest under one of the two following criteria: 1) title insurance were obtained on the land or 2) my investment would be guaranteed by M & K, Obelisk's Brazilian development company, and Obelisk International against claims made against the land. (I was willing to accept development risk, building risk and marketing risk as outlined in their disclosures. I was NOT willing to accept title risk.)
I was told that it was not common to use title insurance in Brazil and Obelisk thought it would be difficult and costly to obtain. At no time did anyone from Obelisk even respond to the guarantee against land claims, so evidently that was something they were never willing to consider. I did a little research of my own and found an attorney at Fidelity Title that had published articles about international title insurance, specifically in Brazil if I recall correctly. I found his contact information and sent him an email. In a few days I learned the entire land purchase could receive title insurance at a cost of $25,000 (USD). This did depend on Manzanares International provided specific items to Fidelity Title, but presuming the listed items were provided insurance was routinely available.
I forwarded the email from Fidelity Title to Obelisk and they said what I had learned was interesting and that they may consider title insurance in the future but that they were on a deadline and must proceed with funding. They told me they expected other parties to fund the balance within the week so we simply parted ways.
I believe Obelisk sent out new information in 2012 stating they were considering or holding a showing for investors in Natal, where they would physically show investors the project. I didn't reply as I didn't have available funds.
I believe it would be best to go to Brazil to see the property, but in all cases I would not invest UNLESS title insurance on the property was purchased.
I seem to recall the moderator was not personally concerned with title insurance, but he is also fluent in Portuguese, is located in that exact same city, and is an expert at performing due diligence regarding property ownership so he can learn firsthand whether the land purchase is safe or not. Since most everyone else will not have those qualifications or access it makes sense to invest ONLY if title insurance were purchased covering the land.
Again, I did not invest, but I would NOT invest without title insurance. I hope that helps.