106 Construction and Land in Costa Rica

[Richard Bexon]

Good afternoon, Cristian. How are you doing? 

[Christian Arce]

I'm doing great. Richard, how are you? Doing fantastic here.

[Richard Bexon]

Very, very good. I really appreciate you taking time because I know how many homes that you have on the go. Actually, how many houses are you building at this particular moment in time, do you think?

[Christian Arce]

At this moment, I'm building six. Wow. And also, you know, six on ground.

We are doing the planification. We have 12 different projects, including hotels and residentials, property development, on and on, you know.

[Richard Bexon]

Wow.

[Christian Arce]

Good for you. You know, our team at this moment is full hand.

[Richard Bexon]

Well, good for you, man. I mean, it shows that you're doing a good job because if you weren't, you wouldn't have that many projects. So congratulations.

[Christian Arce]

Thank you. Thank you. I appreciate it.

Well, that is what we try. Trying to find all the necessities that our clients have and fulfill it with the best way, on time, on budget. You know, this is our goal in this company.

[Richard Bexon]

Definitely. Definitely. Well, Cristian, I mean, we spoke to you kind of, I think, just after the pandemic.

You know, I mean, I think the pandemic, you know, really changed Costa Rica, you know, how it was seen globally and also, you know, as a place to invest. I mean, in your world of construction, you know, are there any trends that you're seeing in what people are looking to build or what they're looking to from their homes that, like, is different now than it was pre-pandemic?

[Christian Arce]

Definitely, Richard. You know, what we are realizing is that a lot of people really consider now life a little more than what it was before. You know, this pandemic opened a lot of aspects in people's lives that they don't realize, you know, like, you know, life is so short and so fragile that any time it can go.

So a lot of people that they have in their minds, you know, a goal or a dream, like building a Costa Rican vacation home, now they are more into it and they are now realizing that, you know, that anything can happen and that dream can go. So a lot of people, what we're seeing is a lot of people online here in Costa Rica for years and now they are completely on the right, you know, on the right way to build it. No, they don't want to wait no longer.

So they are not, they don't even are waiting until they get retired to fulfill this dream. So, yeah, that is one thing. Another thing it is that we're seeing a lot of new investment and it is also not for retirement people, it's for jungle couples, you know, jungle couples that are building, they're moving their businesses here because probably they're nominates or, you know, they're working online.

So that is something that is new for us, you know, this kind of businesses. So, yeah, definitely it is one before and one after pandemic situation in Costa Rica. But so far, so far, thanks God, we're super busy.

People are still motivated to build even with this crazy market, you know, worldwide that is happening. But we see that people are still really interested to build and fulfill their dreams and also invest.

[Richard Bexon]

That's awesome. I mean, when it comes to like the design of homes or what people are including, I mean, are you seeing, you know, I often hear that more contemporary homes are being built at the moment, more modern contemporary rather than the older colonial stuff, you know, and people are, you know, including offices, gyms now. I mean, are you seeing any of that in your builds?

[Christian Arce]

Totally. And something else that you don't mention, Richard, it is the people is a little more ecological. Nowadays, they're trying to build with materials, you know, recycled materials or materials that don't impact the environment so much.

I think they're conscious of conservation. It is now owning a lot of people. Whatever we're building, it is pretty much modern, you know, that modern, it is the tendency, the tendency that everybody like, you know, straight lines, you know, big illumination, natural illumination with big windows, huge slider doors.

And that is what we see on and on more daily basis. And people, they're trying to build their homes comfortable, you know, with gyms, with offices, enough space, because nowadays it's not just to build a home for a family. Also, they, like I say, they are thinking to Airbnb homes or to rent it or in the time that they're not here, trying to get some income from the house, you know.

So they're trying to do the house a little more convenient for their activities.

[Richard Bexon]

No, I agree. I mean, the more homes that I look at a lot more, you know, again, I'm seeing more gyms, more inside offices, more outside space, outside dining as well. You know, a lot of outdoor kitchens are there as well.

Just because, again, here in Costa Rica, you know, when we build homes, it's a little different than the northern hemisphere because we spend a lot of our time outside because it's, you know, I mean, it's beautiful here most of the year round, whereas, you know, we don't have to spend, you know, six months of the year inside because the weather is terrible.

[Christian Arce]

That is the good thing about building here in the tropics, you know, especially in the southern area of Costa Rica, where I'm located, we see, well, the weather here is fantastic, you know, compared where you have a really rough winter seasons or really dry seasons where you can even be outside because it's too hot. Right here, we are, you know, eight months of the year, what we consider rainy season, it is sunny mornings, rainy afternoons, so it's still time to go do things, you know, to go and enjoy outside. Now this raining a little bit more, also it's pleasure, you know, also the rain, it is comfortable in some way.

The temperature all the time remains the same, you know, one degree down, one degree up, but normally it is the same temperature all year round. So that is one of the good things about this building in this area of the world and also Costa Rica.

[Richard Bexon]

Yeah. Well, Christian, I know that you've bought land all over Costa Rica and you've also developed as well, but let's talk about land a little bit here. You know, typically people come to you after they've bought their land.

Am I correct in saying that most of the time? That is correct. Okay.

So, I mean, what advice would you give to someone that's looking to buy land? Because I'm sure at some point you would also like to be like, it's probably great when someone comes to you that's like, hey, I haven't bought the land yet. I'm thinking about this land and thinking to do it.

Does this make sense in order to do this on here? But like, what advice would you give to someone and what things should they consider when buying land?

[Christian Arce]

Okay. Buying land, especially here in Costa Rica, could be tricky. Now the regulations of developing land is being changing over the years.

And this moment, you know, in the past government and from 2018 to 22, the regulations of buying land in Costa Rica changed completely. Like now we have to know exactly how to subdivide the land because in Costa Rica it's only two different ways to subdivide land. One is in agriculture parcels and another way it is in condominium law.

People get a little confused with this term, condominium. Condominium law means a legal procedure to subdivide land. Don't have nothing to do with apartments or construction.

It is only the law about segregating land. Okay. Let's talk the more you use the people.

Okay. I'm going to give you a scenario. You know, maybe I'm getting a little all over the place, but I don't want to get you confused.

Okay. Normally this is what happened. I get an email from somebody.

Hey, Christian, we are, you know, Mario and Karen and we want to buy a piece of land to build our future home in Costa Rica. What we have to do? You know, normally that is the question.

So pretty much we point these people to make their due diligence, you know, to make their homework, to see which location they're buying, if the land have any restriction, if the land it is in any protecting area. So we do all the different investigation with our engineers. We have a group of professionals that work with new ways construction from geologists, hydrologists, topographers, sociologists, and also myself, I am a civil engineer.

So we do a several studies to see if this land, it is buildable. It sounds like a tricky, but it's not so bad, you know, and also it's not so expensive.

[Richard Bexon]

If you know what you're doing, it's not tricky, but if you don't, then yeah, maybe it's, maybe it is a little tricky.

[Christian Arce]

Definitely. If you want to do it yourself and especially with a language in terms that you don't know, definitely it's going to be a nightmare because a lot of people don't even know how to start. So what we tell, you know, our new clients, it is, please, please be careful.

Don't jump on the good deal because maybe deal sounds too good in the beginning, but it could be a hassle. It could be a, you know, something behind that you don't know, and you're buying, you know, you're buying something in the end, you can do nothing with that. So, you know, the recommendation is to have somebody like New Age Construction doing that homework for you, giving, you know, that right information in order to be, in order to know exactly what to do with the land, because sometimes you buy a piece of land thinking that you can build a lot.

And the regulations say that you only can build 10 or 15% of the land. In some areas you can build 50 or 60% and different locations you can even build more. But the point it is doing your homework on time with the right people.

[Richard Bexon]

How important is a soil study to get during due diligence in your opinion, Cristian?

[Christian Arce]

Somebody that don't do soil study don't know what it's doing. I am talking about an engineer. Without the soil study, the engineers don't have a clue what kind of foundation that house or that construction will need.

So also you are going to know what you have underneath. You don't know if you have, you know, you have subterranean water, if you have sand and, you know, the sand can liquidate and move and crack your home. Pretty much that is, you know, that is security.

Also, without a soil study, you cannot have insurance in Costa Rica. Remember, Costa Rica, it is a country that we have a lot, not a lot, but we have air quotes. You know, we are in that, I don't know how you call it in English.

Remember, English is not my first language. I apologize if I get a little confused.

[Richard Bexon]

No, no, no, not at all. Your English is perfect.

[Christian Arce]

Thank you. Thank you. Appreciate it.

But we are in the Cinturon or the belt of fire. The belt of fire that is from the Galapagos and Chile and all the way to, I don't know, to, to.

[Richard Bexon]

Up to Alaska, I think. Yeah, all the way up there.

[Christian Arce]

Yeah. So what happened is that the two place that we have in Costa Rica, they're moving constantly all the time. So we have a really severe and strict construction code regarding air quotes.

So the code cannot be fulfilled without soil study.

[Richard Bexon]

Yeah. Well, I mean, I think it's important with a soil study as well, because you're also going to get an idea of like, again, you know, are you going to have to spend a fortune on your foundations? I mean, I think as you said it there, it's engineers need it to define what they're going to do with the foundations.

And if you do it during due diligence, at least you have an idea there of like, okay, we're not going to have to put in tens and tens of thousands of dollars here in the foundations. You know, it's a pretty simple build. I say simple, not saying that your work is easy as I know it's not, Cristian, but like, it's a little bit easier than, you know, as if it was sitting on sand or something.

[Christian Arce]

Exactly, exactly. And also, remember, you know, we are a custom builder. So we're trying to pretty much do what our clients want.

In order to give security, we have to work according to the law and according to the construction codes. That is definitely important.

[Richard Bexon]

Okay. Well, I mean, a lot of people I bumped into, Cristian, you know, have this dream of buying a larger piece of land and subdividing it in Costa Rica and then selling off those lots. I mean, I know you have experience doing that, you know, and I mean, I don't think it's as easy as people think it is.

But I mean, what would your advice be? And how easy is it to do this? I mean, how long does it take?

And you know, what do you need? Okay.

[Christian Arce]

In this moment, I am working on two parcels. One, it is 16 hectares. And these 16 hectares, we are developing 25 ocean view lots.

Amazing property. I mean, I am really happy with the results of this property. And also, I am developing another parcel that is 49 hectares.

And these 49 hectares, we are only using for the development only 12. Everything else is going to be conservation. Everything else is going to be jungle because it's impossible to develop because we don't have legal permits because it's a nave jungle.

Okay, I'm going to tell you these two scenarios. And the first land in the 16 hectares, we have three years process. Since we start with the engineers, you know, the special engineers to get that CETENA, that CETENA is the environmental permit, we have to make a series of studies, you know, like geologists.

We need a geologist saying that the soil is stable because we are in the hills. We need archaeologists. Archaeologists have to come and do an inspection saying that we don't have any pre-columbine stuff.

Well, the series of studies that we have to do, they are not easy regarding time. You know, it's nothing serious, but time, it is a crucial thing. If you're in the rush, if you're thinking that in one year, you're going to have absolutely ready to start to develop the land, they're lying to you.

Somebody saying that, they're lying to you because the series of studies that we have to go through the government, hopefully with this new government, things are going to get quicker. But so far, it takes time. And if you don't present the right documentation, it's going to take even longer because you have to make corrections in the meantime.

It's a good business. I mean, a lot of people, you know, they have that good luck that they find a parcel of land in Costa Rica, not so pricey. They develop it.

They, you know, get water. That is another big thing, water in Costa Rica. Power nowadays with photovoltaic systems or anything else, you know, power is not so critical, but water it is.

So it is a good business. Like I say, if you know how to do it, they can be very profitable.

[Richard Bexon]

How did you go about getting the water for your 16 hectares? Was it already there or did you have to request from the Asado or dig a well?

[Christian Arce]

Absolutely different story. Okay. You don't need to tell us, by the way.

In Costa Rica also, it is different ways to make concessions of water. You know, every single water system that you create in Costa Rica have to be legal and have to be registered. You cannot develop, you cannot have Costa Rican construction permits without legal water.

Okay. The easiest ways, the easy way it is, if you can hook up, you know, in front of your property is legal water association, like AYA, it's called Acueductos en Alcantara, that was AYA, and that pretty much managed the rest of the rural Asada. Asada is a group of neighbors, they manage rural water systems, but also you have to fulfill information in order to get and join this kind of Asadas.

That is the only two entities in Costa Rica that manage legally the water, Asadas and AYA. If next to your property or close to your property is no possibility to hook up to one of these systems, you have to create your own. And the way to create your own, you have to get a professional hydrologist that is going to make a concession.

A water concession represents you in front of the water department of Costa Rica, and that is a process that they have to do inspections and see what kind of flow and anything else you have. Okay. In order to get concession, it is two, no, three different ways to get a water concession.

One is an artisanal well. You understand that?

[Richard Bexon]

An artisanal well, yeah, dug by hand.

[Christian Arce]

Then the second one is to get a spring water. And the third one is to get superficial water. That is a water from a creek or from a river.

And the spring well is the one that's a little bit more complicated because you will have to have a huge radius of protection. Yeah, it is a big setbacks. And this moment, the setbacks is 100 meters.

It's a radius of 100 meters. So in the spring, you are going to lose about 22,000 square meters of land with a huge radius. And in small areas, you know, to develop that, that costs you a lot of money.

The best way they don't have, you know, so much impact is if you can get a superficial water, you know, that you hook up to one creek or to one river, then you have to do a filtration system, a chlorine system, you know, a chlorination system. And then you can have the water and you can provide the water to your different lots. Actually, that is what we're doing in both of the properties that we're developing in this moment, because that is a little more efficient.

And also it is more affordable. You know, you don't have to make a huge investment and you don't lose so much land.

[Richard Bexon]

Yeah, definitely, definitely. Well, let's talk construction a bit as well. I know that we focused here on land and development here, but I mean, in your experience, because a lot of people have developed with you, I mean, where are the hidden costs that most people don't foresee or they overlook where they're like, wow, I did not really, you know, you know, I'd say before and then also during some of the costs that they just they don't foresee.

[Christian Arce]

Okay, mostly, normally I say 50%. Okay, 50% of the cost in one house, it is on the finishes. Finishes, it is, you know, you can save, you can reduce costs and foundations and structure and something else, you know, things that you don't see.

But a lot of people, they don't realize the finish a home, it is the area that is going to cost you more. So normally, sorry, but this happened a lot. Normally the client sit down with an architect, the architect have a magnificent design, but when it's time to bring the design to reality, it is non-budget, it's not realistic.

So sometimes the client say, well, I have $100,000 to build a house and the design end up to be $300,000. So, you know, pretty much the process of building the perfect home, it starts from design. It starts since the design, you know, that the design is according to budget.

And it's also according to the bioclimatics of the land. That is something that a lot of people don't put a lot of attention and they don't focus the bioclimatics here in the south and the southern area of Costa Rica, it is completely different than anywhere else in the world. So they want to have a North American standard home and they don't realize that right here in the southern area of Costa Rica rains like crazy.

It rains, you know, more than anywhere else here in the country. So all the kind of aspects, you know, design, planification, construction, finishing, it have to be, you know, have to be well managed by a professional that is not going to be, you know, get you to a mistake.

[Richard Bexon]

Yeah. Well, I mean, a lot of people that build here think also about reselling at some point as well. I mean, where do you think people should really invest their time and money when building a home thinking of resale?

I mean, what's the stuff that really excites buyers in your opinion?

[Christian Arce]

Well, exteriors, exteriors, focus, you know, what you want from Costa Rica is to be outside, you know, enjoying the weather, having great views. If you buy a perfect ocean view lot, definitely you don't want to be inside of the house. You want to be in your pool, you want to be in your palapa, you want to be in your garden.

So trying to maximize the flow from the inside to the outside. So having a big slider windows where you feel when you're in the kitchen, that pretty much you are in the party. So everything feels like it's not transition from one to another.

So that is what we see all the time. And it happened to me when the design is not correct, and they resell the house, I end up doing remodeling, you know, remodeling homes in order to open to make a, you know, open plan. Concepts and stuff like that.

So that is crucial, you know, having airflow through the house and having the weather, enjoying the weather inside and outside. That is what is going to be all about Costa Rica.

[Richard Bexon]

Definitely. I mean, Chris, a lot of people ask, and I think this is a difficult question, but maybe you could give us a range. What is the cost per square foot or square meter, you know, at the moment?

And I mean, I know it's difficult, but like where would you say that the medium is at the moment? I'm not high end. I'm not building like a shack, but like something in the middle that's kind of comfortable.

[Christian Arce]

Something in the middle. I mean, I am working and budgeting these days like crazy. Like I say, I have all over all these kinds of different projects from a million dollar homes, $300,000 homes, $2 million homes.

So I can tell you, you know, at a price to start, it is $1,300 in a square meter. That is a reasonable cost. It is about $130 in square feet.

That is a price that's going to give you good finishes. I mean, I am not talking high end. I am not talking marbles.

I am not talking about Italian travertines or stuff like that. But it's also going to give you a nice stone, you know, nice natural stones and nice hardwoods. But that is a good price to start, you know, $1,300 and up.

[Richard Bexon]

Yeah, definitely. And I mean, I think that wouldn't include a pool. They'd have to put the pool on top of that.

[Christian Arce]

No, that is a price, you know, if we make an average. Remember, inside have a price, you know, what we call full area have a price and half an area, what is terraces and decks and everything else have a different price. Also the pool.

When you make an average, you can consider with, let's say $1,300 in square meter, you can have an average to build all together.

[Richard Bexon]

Definitely, definitely. Well, my last question for you, Cristian, as I know that you're very busy, you've got a lot of home builds on at the moment, but if you invested $500,000 and had to invest it into a business or real estate in Costa Rica, what would you invest it in Cristian? Building.

[Christian Arce]

Definitely, you know, as soon as you're, let's say, how I can say this, you will make 25 to 30% in the day that your house is finished. So if you have half a million dollars today, you buy a piece of land, build a house, as soon as you finish the house, you don't have any more half a million. Now you can consider you have $700,000, $750,000.

That is the value of your project. So definitely building, it is a really good way to invest money.

[Richard Bexon]

Fantastic. Well, Cristian, really appreciate your time. And I'm going to put all the contact details for you and UH Construction down in the bottom.

I know that you guys work all over Costa Rica, but are mainly focused in the Central and Southern Pacific areas, correct? It's correct. Awesome.

Well, anyone that wants to contact Cristian can, all the contact details are there in the description. And Cristian, really appreciate your time, sir.

[Christian Arce]

Thank you very much. If anybody is interested to work with UH Construction, you can see many, many of our projects in UH Construction Facebook page. Right there, you can see from hotels, residential homes, you know, all over, all kinds of different projects you can see.

[Richard Bexon]

Awesome.

[Christian Arce]

Well, Cristian, have a great day, buddy. Thank you. I really appreciate the opportunity to share a little information with you guys.

This has been great. Thank you. Thank you.

Have a good one.