95 Investing buying and building in the Southern Pacific

[Richard Bexon]

Good morning. How are you doing? 

[R Owens]

I'm excellent. Thank you, Richard.

[R Owens]

 Good. This will be interesting, Richard and Richard.

So it's a good, strong name. Yeah. Very good.

Name of Kings. Exactly. Exactly.

Well, Richard, I really appreciate you making time in what I know is a very busy day for you guys to just come and chat with us on the podcast and give us a little bit more information about what you do in the Southern Pacific area. I mean, we're starting to kind of hear and see signs of a slowdown kind of in North America. I chatted the other day with some, we did a podcast the other day with Rebecca Clow from up there in Guanacaste, and she says that they're seeing a minor slowdown there, some price reductions in properties.

But every market is different. I mean, what are you guys seeing in your market?

[R Owens]

Well, we have seen just over the past month, there's a typical slowdown just in May in general. Not a lot of people traveling. Your snowbirds have gone back.

Kids are getting out of school. The European holidays start in June. So we've had a lot of closes this month.

We still have clients coming down. I think it's just been more of a just a normal time frame of the year that it's slowed down because things from May, just the amount of clients I had was less, but I was doing a lot of things. Yeah, that's normal.

But now that we're in mid-June, I mean, I've got a lot of clients coming next week. I had clients this week. So we're kind of picking back up.

We have a normal kind of slowdown in May. And typically in September, October, we get slow in this area too. So it's pretty common for the time frame.

[Richard Bexon]

And are you seeing, again, I'm just trying to compare it to the northern Pacific areas. I mean, they've been seeing a lot of price reduction recently. Are you seeing that in your area or not really?

[R Owens]

No, we're actually seeing the opposite. Prices are still down in this area. Yeah.

[Richard Bexon]

Wow. That's great to hear. I mean, I think it's a strong developing market.

I think it offers a lot of people the elevation that sometimes people look for the cool climates rather than being at the humidity at the beach. And I mean, it's there if you want it. I mean, the area, just because of how it has the mountains and jungle kind of hitting the beaches, it just offers clients a wide variety of temperatures and climates.

[R Owens]

Well, that's one thing about the area we're in in the southern Pacific. We get breezes all day. You get breezes coming in from the ocean all during the day.

And this is where the mountains meet the ocean. So in the evening, that breeze reverses and comes down from the mountain. So we've got a great climate here.

It is more humid, but when you have that breeze going, you don't feel the humidity so much. And, you know, so we're not living closed off in AC here. We're living, you know, opened up to the outdoors, allowing that breeze to come through the house all day.

[Richard Bexon]

It was interesting. I was with you with a house the other day where we opened just two doors and it was incredible, just the breeze coming through. You know, I mean, it was great.

I mean, you don't need AC a lot of the time.

[R Owens]

Well, that is, you know, that's your quality of life here is that fresh air. And that's why so many people come down here is, you know, to be in the fresh air, to be outside, to take advantage of the wildlife. There is no industry in this area.

So there are 60,000 acres of mangroves in the southern zone. So the mangroves give off more oxygen than other trees. So therefore, I mean, it's just a, this is one of the blue zones in the world.

So yeah, just a great area to be in.

[Richard Bexon]

Wow. Well, I mean, the northern areas of Costa Rica and some of the areas see a lot more kind of, you know, US buyers in the Southern Pacific. I mean, who is the buyer and how do you think that they differ?

[R Owens]

In this area, now that's changed over time. I think in the past, um, the original settlers of O'Rourke Hotel, the expats that came into this area, you know, you had a lot of, uh, had a lot of Canadian influence, uh, French Canadian and, um, Canada as well, um, coming down here, but since their dollar changed a lot, you know, about five, six years ago. So we kind of saw that flip, you know, more people from, from the States come, um, but at the same time, there's been a huge influence of, uh, people from Europe that's been here.

There's a lot of Germans here, Spanish, French, um, uh, people from all over the world have been here. So there's just, uh, there's a lot of diversity, world diversity here in, in the Southern Pacific zone.

[Richard Bexon]

Yeah. I mean, what do you think though, the Southern Pacific areas of Dominica will be touched out, offer residents, investors alike.

[R Owens]

Well, it's a good question. Very good question. Um, we have Dominica, which is where the bulk of your expats are in the Southern zone.

There's some fewer towns, you know, further South, but they're not very developed. So, uh, the bulk of the people are going to be in one of those three towns. So in, in these three towns have their own, uh, distinct personalities.

Um, and at the same time, this whole area is combined. So it's like one big community. So in the minute, how it's a bit more transient, it's a bit more, um, you know, surfers are there for the weekend.

Yeah. It's, you know, it's a lot easier. You can, you know, for backpackers, you can get off the bus, go to a hostel, you know, you're surfing your own beach all weekend.

So Dominican gets more action, um, as far as people coming in with tourism, you know, and that it's local tourism, this international tourism, you know, Dominican gets it all because it is, you know, it's beach town, surf town. You get, you know, 15 minutes out to that, uh, down the highway, you're in Uvita. And Uvita is, uh, you know, these are beautiful beach towns too.

I mean, all the mountains meet the oceans, you get up in the mountains, you have great views, great breezes. Um, but, uh, in, in Uvita, you've got more of a commercial zone there. Um, that's where a lot of, if you live in Dominican, if you live in Noho town, north or south of Uvita, that's probably where you're going to do your day-to-day shopping, to the grocery store, to go to the bank.

And then Calcas, you know, they've got some restaurants and it's more of a kind of beach town, small businesses. Uvita is where you're going to do your day-to-day business. Ojo town, it's more, um, of a smaller community.

There's not a lot of businesses. There's great restaurants in Ojo town. Ojo town is known as the culinary capital of Costa Rica because of all the expats that's here from all over the world.

Um, and they bring something from their area to here. And, uh, a lot of times it works out well with food. So we have great restaurants and great Spanish restaurants, great Italian restaurants.

Um, you know, and a lot of people come here and they're really surprised to find that much diversity outside of a big city like New York or Chicago or Toronto. You know, they're like, wow, you can get all these different types of food here in this general region of Dominical, Uvita and Ojo town.

[Richard Bexon]

Yeah. I mean, there's a great Indian restaurant there in Uvita, which I love, you know, it's, it's great. I mean, it's just so random as well in the middle of like Uvita, there's an Indian restaurant.

I was about to mention that one. And it's so awesome. I mean, I'm, I'm English.

We love Indian food and that's good.

[R Owens]

Yeah. I really liked that place. And they have the, uh, they have the right oven to do the tandoori.

[Richard Bexon]

Yeah, definitely. Definitely. Well, I mean, a lot of people probably listening to this podcast, have no idea what land or home costs would be in your market.

And I know that's a really difficult question because it depends on what you want, but I mean, if you were to generalize, how much would you say an ocean view, you know, three bedroom home would cost in Uvita compared to Ojo town and how much would like a one, a one acre ocean lot costs say, you know, in Uvita and compared to Ojo town, just to give people an idea.

[R Owens]

Okay. Um, good question. And like you said, there are a lot of different aspects where you're looking at, um, where we're at, where the mountains meet the ocean.

So there are some difficult roads here. Yeah. So access can be, um, difficult to get to some of these properties.

Now you may get up to this property. It's got you looking all the way down the coastline, just absolutely stunning. It may take 30 minutes to get there.

So, um, you know, all of these are factored in to the price. Um, some people like to be way up on top of the mountain where they're not with anybody. Um, so it kind of depends on the amount of land you're getting and the amount of usable land, because again, when you're in the mountains, the access is different and the amount of views, you know, there's a lot of cliffs, you know, and to get these kinds of views, you know, you've got to climb hills to get the better view, you know, so there's a lot of, uh, factors to take into account when, when you're looking at this, but I would say on average to get something accessible with a, uh, you know, nice, nice ocean view, you're probably going to be looking around 200,000 on average for the property. And I'm saying something with, with pretty good access, um, you know, fairly close to town, but having some privacy at the same time, something that a lot of people are looking for. Um, now you can get some bigger pieces of land.

Um, if you wanted to, most of those big pieces are more for development versus, you know, just somebody coming in and climbing way up the mountains, but they're one home up there.

[Richard Bexon]

So, I mean, if, if the land is going to cost, I mean, we're just generalizing here at about 200,000, because you could probably pick something up for 150 and you can also pick something up for 250, you know, again, I think it just, there's a lot of variables in play, but I mean, would you say a three bedroom, like, uh, I would say, you know, I mean, maybe, uh, you know, standard mid road, three bedroom home is going to cost, I don't know, an excess of 600, $700,000 in the area.

[R Owens]

Yes. Um, we're going to be looking at a three bedroom home with a nice ocean view with, with decent access. We're going to be looking somewhere between 650 to $900,000.

[Richard Bexon]

Yeah. Okay. Um, great.

I mean, where do you see the opportunity in your area? I always like to ask this because again, you know, it's, it's, you know, I, it's important that people have perspective and, you know, I mean, you live down there, uh, a lot of people come down and it's like the more time that you spend in an area, the more perspective you get, but I mean, where do you think the opportunities are in your area?

[R Owens]

The opportunities are for sure in developing bigger pieces of land, splitting them up. Um, the, there's also what we have down here, we have a lack of inventory in this area. Um, you know, a lot of people are coming, they want something new.

They want something clean, you know, they want that airflow that we talked about earlier. You get that mostly in a more modern tropical design where you can allow for some, some window openings, maybe up high, um, that you don't have to lock the house up, close it off completely if you're not there. Um, so we don't have a lot of that here.

Um, it's very undeveloped area. The highway just came down in 2010. So, um, we have a, a lack of supply.

So if somebody were to come, if somebody comes in, we've got houses selling halfway under construction, you know, they're not even finishing construction because that's what people want, um, to come in and to find a, you know, a nice lot. It doesn't have to be the big ocean view either, you know, just, just a nice property and you're willing to build a house on it. You can turn around and sell it, you know, for a very good profit, um, you know, or dividing the land up.

I went and saw a beautiful piece of land yesterday that could have, uh, you know, at least eight ocean view homes on it. And, um, you know, some more properties as well with just mountain views, but eight really, really big ocean views or more once you got it cut out, um, and design, but, you know, they're looking for 300,000 for that. You can start dividing that up.

And I mean, that's, you know, you've got to put some money into it and developing it. But you know, when, when you're said and done selling those lots, I mean, it's worth over $2 million. So that's really where the better investment is, is to buy something and you know, put the money into it because it does, when you're looking at these mountains, it looks like a lot of work, you know, but there are professionals down here who do that work every single day.

Um, and you know, they come up with some, some really beautiful lots. I have a client right now who's, um, just for example, we found a, a great piece of property. It's one big piece of property.

It's 1.24 acres. It's not, it's not really big, but it lays out very well. And, and, and it just kind of goes up the hill.

So he's bought this property for $200,000. He needs to bring power and water to it. Um, it's, that's going to cost him, uh, about $50,000.

He's going to have some more site prep in there, uh, about $75,000. So he's going to have about say $350,000 in this getting water and power. He's going to divide it into three lots.

Those three lots are usually worth $200,000 plus right now, $200,000 to $250,000 with the, you know, ease of access, close to town, great view. So, I mean, he, it's, it's an easy money for him. It's an easy flip for him.

And if he builds the house on it, it's just that much more if he builds the house and then, so, which is what he'll do. He's bought two pieces of land. He's going to divide them up and build one house at a time and move on to the next.

[Richard Bexon]

Good for him. Yeah. I mean, I think if you know what you're doing and you're willing to, you know, I mean, you're willing to kind of deal with it, then that's great.

I mean, just a lot of people just want, you know, turn key, but I mean, if you're willing to do the hard work, there's value in that.

[R Owens]

And that's, you know, one for investors, just coming down here and doing the work because like you said, people are, are scared to do the work. They're, they're intimidated by it. So you call in and do it.

Uh, you know, there's, there's automatic value in that for you. Automatic appreciation. These people that are building these houses are making, you know, $150,000 to $300,000 just turning them around because, you know, people don't want to go through the building process.

[Richard Bexon]

Yeah, I agree. I agree. Now, you know, I mean, I always like to talk about businesses that, you know, a lot of people want to move down and they want to start a business.

Um, you know, but, and I always say, look, when you get down there, figure out and ask around is what are the essential businesses that you believe are missing? Because there is a lot of money in that. I mean, I, again, I was at Pancito Cafe yesterday and I was like, wow, like this thing must do really well because it was something that was missing in the area and someone put it up and it's a great French like cafe.

But I mean, what do you think is missing in the area?

[R Owens]

You know, um, I always, you know, we get this question a lot and I get this from investors. One of the big things that I see in my town as it grows, we get a lot of, you know, as it's growing, we need more professionals down. And, you know, with that being said, everything down here is, is either a single family home or it's a villa somewhere.

Somebody's got rental villas. Nobody's got apartments in town.

[Richard Bexon]

Yeah. That's crazy. They haven't done that.

[R Owens]

Yeah. I mean, there's paved roads coming in. Um, there's great access.

You see that they are developing more like neighborhoods versus bigger farms. These are getting subdivided into, you know, 500 meter lots or, uh, you know, 0.12 acres, you know, maybe a 10th of an acre or so. So, um, there's a lot of professionals, uh, local Costa Rican professionals that are coming from, let's say San Jose or San Isidro to work down here.

And they're, they're not having places to live because everything is a vacation rental. So, you know, apartments in an area like this, I think is, you know, would be big. Um, well, another thing that I've seen is just a couple of little clothing stores and weeds that are doing, um, you know, my wife and a couple of her friends that, you know, it's on a little side street.

Most people don't even know about it, but, you know, these go from different places and they bring in dresses and shoes and, you know, there's, there's no clothing stores. There's very little in that aspect. We have to drive to San Isidro or to, um, you know, sometimes we even go to Panama.

You know, it is kind of nice. We don't have that developed down here. It's quiet, but at the same time, you know, Hey, I need a pair of flip-flops.

Where do I get one? Plan a weekend trip for that too sometimes.

[Richard Bexon]

You know, I always say to people that like, again, there is money in the street here in Costa Rica. You just need to pick it up. I mean, if you've got your eyes open and you're willing to take the risk to start a business, you know, I mean, there is opportunity here because there was a lot of people moving here and those ancillary services are required.

[R Owens]

I totally agree with that. And, you know, another thing we were talking about last time was just medical services with, with all the expats here that are retired. Just somebody doing some like home health care to go around instead of people having to get out and get the doctor.

I mean, that's another, um, business that would do pretty well here.

[Richard Bexon]

And there are enough doctors here. It's true. I mean, we are at the doctors, lawyers, accountants, engineers.

I mean, there's a lot of them here. So, I mean, you know, it's, which is good. I mean, they're very smart people, very well educated here.

[R Owens]

Yeah. Very educated country. You know, it's, um, that's, that's one of the things that really attracted me to Costa Rica.

When you disband the military and start putting money into education, you know, you see a huge difference in Costa Rica. You notice, um, if you've gone to Panama, Nicaragua, anywhere else in Latin America, the difference in education, you see the trash on the side of the road, you know, you don't see any in Costa Rica. And it's just, I think that education, uh, is priceless.

I mean, it's such a big difference than anywhere else in the world I've been to.

[Richard Bexon]

Definitely. Definitely. Well, I mean, a lot of people are looking to move down here with their families as well.

You know, and schooling is definitely a worry that they have. How is the schooling? Is it up to US standards or, you know, Western world standards?

I mean, what has been your experience and what advice would you give people?

[R Owens]

That's a great question. Um, in Uvita, I've been here for 10 years. Um, a little bit before I got here, some people opened the, uh, there's two private schools in Uvita that were here when I got here.

Uh, one that went up to high school, which is accredited, the Uvita Christian Academy. And then there was Escuela Verde in Uvita. So a lot of people that lived in a hotel carpooled and they took their kids into Uvita, which is 15 minutes north.

Um, same thing, Domenical, they would go to Domenical to Uvita. Um, there's a couple more schools now. Oh, you know, in the past 10 years, more people, um, opened up and Ovo Chow now there is one called Life Project.

There are over, there's a year waiting list to get into this school right now. And that's growing right now. And, uh, the school's growing.

There is another private school called Jungle Academy that's opening up next door to kind of help feed the demand, uh, for all this. So, um, with fiber optic internet has come in as well. So we've got a lot of parents that are working online and sending their kids to private school or public school.

There's a lot of, uh, parents here that send their kids to the public school as well. And, you know, within three months they're speaking Spanish.

[Richard Bexon]

I mean, you don't have a choice. I mean, you, I mean, if you want your kids to learn Spanish, you put them in public school here.

[R Owens]

Yeah. So, um, yeah, it's just amazing how fast those kids picked it up.

[Richard Bexon]

Yeah. But I mean, in, in a nutshell, I mean, there are options and there are affordable options as well. I mean, I remember looking at the rates here.

I mean, they're not astronomical for private school, really.

[R Owens]

No, it's really not. I mean, it's going to be cheaper than what you're expecting to pay at home. And these are people that are coming from, um, you know, a lot of them are coming from North America, um, but other parts of the world too.

So, I mean, these kids getting a very diverse education and from my, I personally don't have kids, but, uh, I have a lot of friends and intense, a small community, you know, everybody pretty quick. Um, but everybody raves about life school and more people are coming just to put their kids in that school.

[Richard Bexon]

Definitely. Definitely. Well, my last question for you, Richard, I don't want to take up too much of your time.

If you inherited $500,000 and had to invest it in business or real estate in Costa Rica, what would you invest it in and why?

[R Owens]

Um, something we've already talked about. I would develop some properties because right now it is just a guaranteed moneymaker with people coming from all over. They are looking and we have very little inventory.

[Richard Bexon]

Yeah.

[R Owens]

As soon as these lots are getting developed and subdivided, you know, people are buying them. The more you invest in it, the more you get out of it too. If you wanted to go ahead and put the site prep work in, put the driveway, um, do you need erosion control, which is a big deal in this area.

We do get a lot of rain. So, um, erosion control is, uh, brings a lot of value to your property. Um, but if you, the more you do, the more you can sell it for.

Um, so just, just subject to buying this, you know, the guy can sell it for a profit. If he puts the roads in and you know, puts everything in, he's going to make more profit off of it. You can just ask, you know, that get that percentage back, um, off of that.

[Richard Bexon]

Definitely. Definitely. Well, Rich, I really appreciate your time.

Uh, and I think anyone that wants to contact Richard, I'll put all of his contact descriptions. Uh, I'll put all of his contact details in the description down below, but Richard really appreciate you coming on the podcast and for your time.

[R Owens]

Richard, thank you very much for having me and I look forward to seeing you in the future.

[Richard Bexon]

You're welcome. You have a great day. All right.

You too, sir. Thank you.