Real Estate Question (Bogota)

[Bill123]

I assume there are guys on the board that know a lot more about real estate than I do. So I will give you the details of this little situation. My novia, who lives with me now here in Oregon, owns a piece of commercial property in Bogota. Just some land and a small storefront on it. She bought the land and built the storefront for 35,000,000 pesos, of about $16,000 at the time of building it. She collects a minimal rent on it. And the dollar has of course gone up in value in the interim. But she now wants to sell it and bring the money here. Real estate prices in Colombia just seem to go nowhere, and rents are very low. I have no idea how they make anything pencil out there.

Anyway, she wants to sell it, for around the same price she paid. And then convert the peso proceeds into dollars on the black market. And then get the dollars here.

Any comments on this?

And also, how would she get the money here? Just by a wire transfer thru a bank? Or Western Union or Moneygram? Does the Colombian government tax the money transfer of dollars?

She would probably end up with around $13,000 in dollars. I am not sure if she could even set up an account here.

I told her that it would be hard for her to put the money in real estate here, since prices are so high here. And I myself am not a real estate investor.

Anyway, just looking for comments from those of you who know more about real estate than me....which is all of you I'm sure!

What part of town is it in?

Maybe I'll buy it.

Just a little feedback but probably not much help: How much is this minimal rental? How much are the taxes? Is the property clear of mortgages/liens? Do you or her have any intention of living there some day? Is she disciplined enough to invest the money if she brings it up here and not blow it? Is she sure the property will sell? Does she have a family member that is looking after the property for her? Or a property management Co.?
You know that if the guerillas are stopped in Colombia that the price of real estate there is likely to go way up. But you are looking at a long term and hypethetical situation.
One real estate investment she can make for $13,000 would be in a mobile home or 2. And then rent out the mobile. This is a little risky if you don't know what you are doing. But a lot of people are making good money working with mobile homes (because the housing industry is so expensive and people on a small income have to have a place to live also). I don't know anything about in Oregon though.
About bringing the money up here, I don't know much about this but would Citibank let you put it in an account there and withdraw it here or have an account you can use in both countries? What about buying travelers checks there and bringing them up here? Obviously you would have to do it in 2 trips (or more) because you don't want to bring in $10k or more on a trip. Just some thoughts.
By the way seen any reasonable prices on tickets to Cali? I'm finding nothing better than appx. $800 from OKC or DFW. I've considered driving to Miami if I can find a cheap ticket there. I can park at the aparment of a family of a friend. ???

[Bill123]

It is in the west part of town, close to the airport. The neighborhood is called Alamos Norte.

The rent she is getting is 250,000 pesos per month. The taxes per year are about 300,000 pesos. She owes nothing in the way of mortgages and their are no liens on it.

If she brings the money up here, I will help her to invest it...even though the market sucks now....i.e., the stock market.

She thinks there will be no problem in finding a willing buyer. Presently, a family member is looking after the property.

Getting rid of the guerrillas is not a real possibility in the near future. Property values are already low. There is some new development going on now in the street, so the area values will go up no doubt.

Mobile home investment may be a possibility for the proceeds, if she wants to still be in real estate, but as you no doubt know, only if the mobile home is on owned property. I can see how this area of investing could be a good one, but as long as ya don't rent to the Jerry Springer types! But I have a question...do mobile homes appreciate? I am talking about the ones on owned land.

I am not sure about the $10,000 thing though. Does it apply to wire transfers? Does the government worry about money coming into or out of the country?

Finally, as far as your question on Miami, if you can get there, you can always go up to the counters and try to make your best deal. I have a friend who does this. It does not work on domestic airlines, but it does work on international airlines. And who knows...it may even work on the domestic airlines for their overseas flights, such as AA and Continental.

Bill, unfortunately this economic class does have some Jerry Springer types. The best way to try and avoid this is to rent only to a married couple, preferably retirement age although you likely will end up with some kids. Another route is to go section 8. Don't be afraid of this because your state housing authority guarantees the rental payment and may even send it directly to you. Although they no longer will pay for damages in my state. The deposit and damages are between you and the renter. But if a renter damages property and does not pay they can loose their housing assistance and they aren't likely to allow this to happen.
A mobile home for the most part will never appreciate in value. Therefore do not buy a new one. Try to buy a used one from an individual not a dealer and you can get a better deal. Also, avoid 2 bedroom mobiles because they are harder to rent/sell. Your right this is a much better investment when you own the land under it and thats the only way I invest in them. This will allow for some appreciation but the real money here is in the monthly payment. You are not trying to make a property worth alot of money with mobile homes but rather are supplying a home for someone and therefore you can get a good rental fee for this. Especially for people who want some space (not living elbow to elbow). If you are a do it yourselfer and can do home repairs yourself you can make money at this. If not I would only invest in mobile homes if I had a mobile home park and hired someone to do the maintenace/repairs for me. It will take you appx. 5-7 years to get back your initial investment and then your mobile home is that much older. But as long as you keep it in TOP shape you should be able to rent it. This is not for everyone to invest in and I would discourage it for most people. You have to decide if you are willing to do the work yourself, if not you will break even or loose money.
Remember Jerry Springer types have to have a place to live too. And they have to come up with the money to live there or you get the county shriff to evict them. Money is money no matter who it comes from and I stay completely out of their personal lives. If it gets too bad just give them a 30 day notice that you are no longer going to rent the property for whatever reason. After they are gone, clean, repair, and rent again.
As far as bringing the money up here you need to hear from someone who knows more but my understanding is that anytime $10k is moved in any way, in or out of this country it must be declared. And the punishmnent for failure to do so is quite a few years in the pokey (not worth the risk). Why not start her an account in Bogota and bring back 2 or 3 thousand in cash each time you come back from there. You will probably return there at least once a year, right? I think you both will have enough adjustments to make in your new life together so that worrying about investing this money and taking on more work might be a bad idea (just an opinion). Wouldn't hurt for her to have a nest egg to fall back on (cash in the bank).

[Bill123]

Good info on the real estate situation. Thanks.

As far as money transferring goes, I think that as long as it is under $10,000, that she can just have it sent up by wire or Western Union. But I just don't know about things like whether or not there are other charges for getting money up here. Maybe someone can add to this discussion.

Trailers don't appreciate in value. They depreciate.

Naturally, it's the lower economic class that rents these things. Usually, they beat the crap out of them and it's hard to collect the rent.

Better to use the proceeds for a down payment on a real house to rent out. Just make sure the rent covers the mortgage and more. I don't know, she may not be able to get a mortgage. On the other hand, I cannot really recommend the stock market right now.

What's the address of the place in Bogota?. I may be in Bogota late next month.

If you don't want to post it here, send it to gringotex@latinmail.com

[Bryan]

B/Love, thought you lived in Ohio?

Bryan, Oklahoma (go Sooners!!)

[gringo Paisa]

You can just bring under ten thousand dollars into Colombia legally (per person). If there are two of you traveling, you can bring 19,999.98 dollars in total.