Mar 18, 2012

No Snow, No Taxes, No Problem: Living a Better Life in the Caribbean

If you are like a large number of other people, it might have crossed your mind, or you might have asked yourself:  Is there a better way?  Meaning that many people, who are really just getting by these days, after factoring in take home pay after taxes, cost of living, cost of college tuition for children, saving for retirement, cost of medical insurance, housing costs (especially in places such as Boston, San Francisco, New York, etc.) have to possibly make some choices these days that they never thought they would.  For example: Do you save for retirement or do you send your kids to college?  Do you take a second job to make ends meet, or do you try and make do with your current income and cut back on your lifestyle?  Did you think you could retire fairly soon, only to find out your retirement savings decimated by the current stock market?  What do you do?  What can you do?

Well, one option could be finding a less expensive place to live.  In addition to cutting your expenses, without cutting back on your lifestyle, having a higher income from your investments does not hurt either.  Where is this magical place?  For many, the answer has been the Dominican Republic?

Why the Dominican Republic? 
In comparison to many other well-known Caribbean destinations, the Dominican Republic still remains to be a place where real estate is quite affordable, and where a modest monthly income (US$2,000 per month) can go far in terms of spending power. So, for the price of a broom closet sized apartment in the Bahamas, you can have your own home (a real one) in the Dominican Republic.  In addition, considering that bank account and income from fixed income investments can offer up to 9% in US Dollars and up to 22% interest in the local currency (the Dominican Peso) and is also 100% locally tax - free, the idea of living off interest from your savings is not such a far fetched idea.

In terms of real estate, there are no restrictions for foreigners as you might find in some other countries (such as Mexico, the Bahamas, Turks and Caicos and to some extent, even Panama).  New homes is residential sections of Santo Domingo (the nation's modern capital, containing close to 4 Million inhabitants) can be found starting at about US$72,000.  If you want a very upscale home located inside a gated golf course community right on the beach, you can find that also, perhaps going up to the US$400,000 range.  In addition, you can also find 5 acres or so of farmland starting at about US$12,000 and home building lots ranging anywhere from US$14,000 up to US$100,000 for something inside one of those very exclusive upscale beach front golf communities we mentioned earlier as well.  So, there is truly something to fit every need and every budget.  As some additional examples - a very attractive brand new two-bedroom luxury apartment (with 24 hour door man, private secured parking, etc.) will cost about US$90,000 in the capital, and you can go up to US$150,000 for a super deluxe 4 bedroom luxury penthouse as well.

So, all things considered, you can certainly find a way to purchase a home or apartment at reasonable prices and live off your retirement savings at the same time (from very conservative investments, such as bank CD's and money market funds).  It is very attainable, and many people have in fact truly found a better lifestyle - the American Dream - or perhaps we should say the Latin American Dream - outside of the United States.

Making a move outside of the US, or your native country where ever  that might be, can be a bit daunting.  Where do you start?  Who do you talk to?  How can you go about getting the correct and best advice the first time around?  Usually taking an exploration trip is the first step in such a process and luckily there are some organized tours specifically designed with such a theme in mind.  One such tour company is Tropical Pathways, operated by Lyle Burke.  Lyle has been operating such tours for over three years to date, to places such as Belize, Honduras and Panama.  After a recent fact finding tour to the Dominican Republic, Lyle left so impressed that he started adding the Dominican Republic to his group of country tours.  Tour participants get to stay in some very first class all-inclusive beach resorts in the Juan Dolio - Santo Domingo area, Punta Cana - Playa Bavaro and even Samana as well.  In addition to touring with a group of like mined people as yourself to view real estate bargains, a one day seminar will be presented to offer advice and information on local banking (English speaking representatives from local banks will be on hand), health insurance and health care (it's a fraction of the cost in the US), residency and second citizenship options, incorporation and related legal advice, plus more.

Mar 4, 2012

Vacation-Home Buyers at Dominican Resort Await Rescue Investor

Hope is not lost for buyers of vacation homes at the Westin Roco Ki resort on the eastern coast of the Dominican Republic. Some buyers there are holding out for a new investor to purchase and complete the project, which languishes three-quarters built.

The 1,600-acre Roco Ki project was among seven detailed in a Wall Street Journal article this week that remain stymied due to lack of financing. Buyers of vacation homes at those resorts paid a cumulative $300 million in deposits, and most have yet to receive their homes or a refund.

At the Roco Ki project, vacation-home buyers paid roughly $54 million in deposits for condos, villas and beachfront homes that still languish as incomplete structures. The project’s developer, American investor Sterling K. Crum’s GeoStar Inc., is negotiating with potential investors willing to take over the project and finish it. The deposits can’t be refunded because they were spent on the resort’s construction.

Roco Ki’s vacation-home buyers say they have heard of several investment groups kicking the tires at the resort in recent months. One group of foreign investors is said to have the project under contract. However, Mr. Crum’s representative didn’t return phone messages seeking comment for this article.

“I’m hopeful that somebody is going to come in and realize that there is a lot of value in this core group of 75 to 100 people who have bought property” at Roco Ki, said Louis Amoroso, a Chicago investor and entrepreneur who paid $1.1 million in deposits for a beachfront home and a condominium at the resort. “And I’m hopeful that they’ll work out a deal that works for them, Roco Ki, the banks and us, and that they will start up the development again.”

Robert Sterling, a Charlotte paper broker who paid $900,000 in deposits for a four-bedroom, beachfront home at Roco Ki, said he and fellow buyers are willing to be accommodating of any new investor and wait another couple of years for the resort to be completed. He adds, though, that the buyers will want any new investor to work with them on their purchase contracts rather than dismissing them.

“This thing has to be a holistic solution that involves us,” Mr. Sterling said. “The (buyers) involved in this thing are pretty influential people. If a developer comes in and decides to not honor these contracts and we end up losing the money we put in, that will shut down an entire market (of buyers) – the U.S.”

    Kris Hudson/The Wall Street Journal

    At the Roco Ki project, vacation-home buyers paid roughly $54 million in deposits for condos, villas and beachfront homes.

As conceived by GeoStar and its partners, Roco Ki was to be a massive resort community with 358 hotel rooms, six restaurants, two pools, meeting rooms, an 18,300-square-foot spa, an 18-hole golf course and dozens of for-sale residences and home sites. Buyers who visited the site in 2005 and 2006 toured the site, by helicopter or by ground, and drank cocktails in a tiki bar perched atop a ridge, allowing them sweeping views of the surrounding jungle. Many met Mr. Crum during sales events at the resort site.

Mr. Crum was identified as the project’s developer by several homebuyers and in a former partner’s lawsuit, which has been settled.

Once the recession hit, costs mushroomed over budget and home sales ground to a halt, GeoStar opted to suspend construction at Roco Ki in 2008. The project still has nine-figure debt, including at least $82.4 million owed to Bank of Nova Scotia and $31.5 million owed to European Investment Bank, according to a project outline circulated to potential new investors last year. Two Dominican banks also have $12 million in loans on the resort.

For his part, Mr. Sterling says he’s not trying to get a refund. He wants his vacation home completed. “I’m not really interested in getting my money back,” he said. “It’s a wonderful place, and it would be spectacular to have a home there and have friends join us down there.”
http://www.rocoki.com/photo_gallery_construction.asp