LAND DEVT UPDATE
March has been a beautiful month here in Nosara, with the landscape stay longer in the season than normal due to a few early rains Work continues at Dharma San Juan in preparation for the road improvements, earth movements and erosion control plans that are scheduled to be completed by the end of July. Residence and Community Center designs are moving forward well as we have finalized certain layouts and programs for the amenities and residence locations Dharma San Juan also has a new resident animal friend Leia who has been
oved to Costa Rica and wanted to build a home, I was surprised at the lack of financing options available. The best I found was an offer with 50% down, 12% interest rate, 2 years payback.
To build the house I wanted and have cash for other things, I knew I needed to find a good financing solution After going to multiple banks (and realizing there was huge amounts of bureaucracy, rules, lack of responsiveness and long funding timeframes), I finally came across a solution that worked for me.
It’s not perfect, but as good as I can find down here. I am using this for my personal mortgage and so after starting the process, realized I wasn’t the only one looking Others in our land project community are now financing through these guys, as well as many more around Costa Rica
To get this right, we spent the last 6 months negotiating with the third party and bank a group rate for all the other amazing projects down here, working with my Costa Rica attorney every step of the way until we came up with attractive terms that made sense for all We’ve put a LOT of work into getting this right and ensuring every detail checks out, so hopefully once you understand more and compare it to anything else available, you’ll appreciate the effort we’ve put into getting it right :).
Two things to note about the group rate. One, we have created this group offer as part of ‘New Earth Ventures’ (eMpowered LLC) to support other land/home projects getting off the ground here in Costa Rica
Two we have done it to create better financial terms for you and for us. If you choose to go forward with this option, we’ve shaved off approx 1% interest rate (in fees vs. their standard offer), created more flexible contractual terms for the group, much better response times/smooth process and providing access to use my attorney if you choose (so you don’t have to go through 30 pages of legal agreements in Spanish)
As for us, being an exclusive referral partner, we get the same rate as you + credit off our fees/loan for every person we refer who finances their property from the Third Party/Bank If you want to refer down the road, we can discuss what that looks like also
We think it’s a great win for all.
High level details are below.
James Hodges
Loan Provider
Top 3 Costa Rica Bank with a Private Costa Rica company
Will disclose once email is received, to protect the partnership & their relationship with the bank (contact details below)
Types of property loans
Land + Construction, Refinance or Buy Existing Home
8%-8.5% interest rate
As of 3/24/23 8%-815%
Variable (potential for 3-5 year fixed + variable)
Effective rate is 8%-85% (interest rate is < 7%, but after fees for private company who collects payments/recruits customers etc, ends up being this approx. ballpark)
Similar to current rates in North America
Subject to change depending on base rate
Our opinion is given the state of the US economy, while rates may go up in the short term to fight inflation there is a high probability they will be cut medium/long term to stimulate growth back into the economy Therefore variable (at least for me) makes a lot of sense
30% down payment
Maybe more if poor credit or not right property
Duration
15-20 years
Closing costs
5-6%
Fairly similar to North America land & construction
Location
Generally coastal areas
Santa Teresa, Nosara, Dominical, Tamarindo, Cabo Velas etc
Who qualifies
Non Costa Rica Residents
North America preferred
How does qualification occur
The private company is a data provider that uses 3 metrics to determine a properties value
Average Daily Rate (ADR)
Occupancy Rate
Revenue
Because of their unique approach and dataset, they value the property itself more than the person in the qualification
Once they approve their property in their system, the bank will go through their process and approve/disapprove
Funding time
Once all documents are in place and appraisal has happened, they aim for 1-2 months
Other terms
Loan Agreement is done through a Trust (can share through process on thisnot super complicated or costly)
Early departure of the program: 3% of the balance
Max amount of payment: 10% of the balance
APRIL 23 26, 2023
@ DHARMA SAN JUAN RIDGE, NOSARA
David, Jesse, Mara, & James
