FYI Mara. I double checked and they still accept installments in USD and they have another project with the same extended financing planned for next year!
Oh that's great! Yeah I already thought it was strange if they decided to switch to a shorter timeframe for USD, since that was the whole marketing campaign around it. Ok that other project sounds awesome, did they give you more info about in which neighborhood?
the only option I can think of is sending USDT to a cueva that accepts it, which isn't hard in BA, but much less common outside of the city. And even then, do cuevas really have 6 figs of USD cash on hand? Lastly, it would seem VERY risky to send a cueva that much USDT and hope they give you the USD in person, not to mention carrying around that much cash in duffelbag.
Cash USD can either be through a bank transfer in the US, but mostly it will be through physical cash (I am only paying the installments through a bank, all my other properties and the 20% down here I have all paid in physical cash usd).
You’re right that this is done with cuevas, friends etc. If you have a good cueva that is no risk, but I wouldn’t do it with a cueva you just started using. Also have to take the fees into account (3-4%).
Another option is to transfer it through a broker by using ADRs/MEP and get the money here, but the downside is higher fees. There’s no conversion there so no worries about rates.
I will post another article on the specifics of getting money into the country, since this is a recurring question.
looking forward to that article, thanks for the above! Might be worth including details about what methods accept what currencies. For example, afaik, you cannot send USD to a cueva from abroad and expect to get USD in cash in argentina (minus fees). Same goes for WU.
Yes you can, I usually send bigger amounts of USDT or a wire to a third party in the US and get those cash USD here in Benjamins. I exchange those slowly over time to pesos as I need them.
They changed that then, maybe because there are less months now. I bought 4-5 months ago. Let me double check with them just to be sure to see why they can’t offer that anymore to see what they say.
This is a great thread, guys! I went in on a monoambiente also back in the summer in the project. My plan has been to monitor construction progress and possibly “double down” by purchasing another unit in the same project (despite some of the risks, I like the opportunity in Argentina right now especially vs USA real estate).
Do you have any basic ideas on how to think about this path forward? I am impressed with the developer so far but frankly I’m terrified about the risk of severe delays, problems or incompletions (in any pozo project).
As long as the developer has a good track record and the structure of the pozo investment is sound, there is not much that can go wrong besides of course a huge macro event. If you want to be extra safe, you can invest in 2 different constructions or even 2 that are not the same developer.
The structure of the OM Palermo project seems sound, though I admit I’m not an expert in the best position to assess such things. I did have an independent escribano look things over just for an extra layer of comfort, and he seemed to think it was all pretty standard.
The different developer or different project “diversification” idea is interesting. I just wonder about the balance between that approach vs just finding a good developer to stick with (and one used by wise gentlemen like yourself).
Damn, that must be one of the last ones left or a very high floor. Do you remember what unit/floor it was on?
Yes, I understand about the CAC, even though I made a very good trade with that Palermo apartment after the peso devaluation, it is annoying that you never really know how much the rate will be or how much pesos you need to deposit.
Yes. You can get lucky and get a big devaluation or you might get a stable USD with an exploding CAC (obviously the dollar will appreciate but the question is how much versus CAC). The monoambiente is on the 7th floor facing the garden.
Ah got it, yes that might explain the price difference; my monoambiente is on the 5th floor and was around 104k. But I think they also increased prices because the project is further advanced now (that tends to happen over time, and that is when early investors can start deciding to sell their “boleto”)
Wouldn’t mind paying extra if they had that financing. Let’s see what they say about that. How much are these prices negotiable when buying in pozo in your experience?
Jul 21, 2023·edited Jul 21, 2023Liked by BowTiedMara
In Croatia (beachfront) most you can get is like 33-40% discount if you pay up 90% up front as an investor in the project and take on the construction company risk that they will finish (normally in 3 years) and you pay the last 10% when it's done. So you can pay 2100 EUR/m2 for something that you can sell for 3350 EUR/m2 in 3 years for example (actual project I know). Altho in those 3 years 2019-2021 prices appreciated to 4000 EUR/m2 so the owner sold it for double. And project was completed in 2.5 years actually before the schedule. But I wouldn't do this now as you'd need to pay 3000 EUR/m2 and take on the company risk and hope prices stay at 4000 EUR/m2 in 3 years, actually they are even higher now at like 4500 (inflated, but imo buyers are exhausted). With recession coming up and saturated market and int. rates rising ... Just so much value elsewhere
Altho funny thing is if you told me in 2019 that Covid is coming for sure I'd tell you not to invest in this but as life goes you can be wrong even if you knew the future. Construction workers wanted jobs (no shortage), credit was cheap and outdoor workers were allowed to work during C19 so they built things even faster than now and every company got bailed out with revolving credit, etc.
Wow, doubling your money in such a short time is impressive, and amazing that it worked during the pandemic. But yes, like you said: it becomes risky at those prices. Right now I think RE prices might drop a bit more after the pre-elections in August here, so that could be an interesting entry. Still compared to having it liquid and paying dividends it’s a lot of hassle in comparison, but those fixed USD installments are really a no brainer for me in terms of diversification.
FYI Mara. I double checked and they still accept installments in USD and they have another project with the same extended financing planned for next year!
Oh that's great! Yeah I already thought it was strange if they decided to switch to a shorter timeframe for USD, since that was the whole marketing campaign around it. Ok that other project sounds awesome, did they give you more info about in which neighborhood?
when you say 'pay in USD cash' do you mean physical cash or are you including a USD bank transfer?
if physical, how does one get enough physical cash into the country to pay for an entire apartment?
nearly every country has limits of $10k USD or equivalent on physical cash per month.
the only option I can think of is sending USDT to a cueva that accepts it, which isn't hard in BA, but much less common outside of the city. And even then, do cuevas really have 6 figs of USD cash on hand? Lastly, it would seem VERY risky to send a cueva that much USDT and hope they give you the USD in person, not to mention carrying around that much cash in duffelbag.
Cash USD can either be through a bank transfer in the US, but mostly it will be through physical cash (I am only paying the installments through a bank, all my other properties and the 20% down here I have all paid in physical cash usd).
You’re right that this is done with cuevas, friends etc. If you have a good cueva that is no risk, but I wouldn’t do it with a cueva you just started using. Also have to take the fees into account (3-4%).
Another option is to transfer it through a broker by using ADRs/MEP and get the money here, but the downside is higher fees. There’s no conversion there so no worries about rates.
I will post another article on the specifics of getting money into the country, since this is a recurring question.
looking forward to that article, thanks for the above! Might be worth including details about what methods accept what currencies. For example, afaik, you cannot send USD to a cueva from abroad and expect to get USD in cash in argentina (minus fees). Same goes for WU.
Yes you can, I usually send bigger amounts of USDT or a wire to a third party in the US and get those cash USD here in Benjamins. I exchange those slowly over time to pesos as I need them.
Hey Mara! I spoke to a salesperson from the OM Project in Palermo and the 80 installments is only in pesos. The 36 installments is in usd.
They changed that then, maybe because there are less months now. I bought 4-5 months ago. Let me double check with them just to be sure to see why they can’t offer that anymore to see what they say.
Thanks Mara! I would be more interested in the fixed one. The CAC adjustment is too unpredictable. They also quoted a 37m2 monoambiente for 120k.
And beyond this project specifically it would be great to just have a true go-to developer I can return to time and again, but perhaps that’s naive
This is a great thread, guys! I went in on a monoambiente also back in the summer in the project. My plan has been to monitor construction progress and possibly “double down” by purchasing another unit in the same project (despite some of the risks, I like the opportunity in Argentina right now especially vs USA real estate).
Do you have any basic ideas on how to think about this path forward? I am impressed with the developer so far but frankly I’m terrified about the risk of severe delays, problems or incompletions (in any pozo project).
Thank you and great stuff!
As long as the developer has a good track record and the structure of the pozo investment is sound, there is not much that can go wrong besides of course a huge macro event. If you want to be extra safe, you can invest in 2 different constructions or even 2 that are not the same developer.
Thanks Mara, makes sense.
The structure of the OM Palermo project seems sound, though I admit I’m not an expert in the best position to assess such things. I did have an independent escribano look things over just for an extra layer of comfort, and he seemed to think it was all pretty standard.
The different developer or different project “diversification” idea is interesting. I just wonder about the balance between that approach vs just finding a good developer to stick with (and one used by wise gentlemen like yourself).
Damn, that must be one of the last ones left or a very high floor. Do you remember what unit/floor it was on?
Yes, I understand about the CAC, even though I made a very good trade with that Palermo apartment after the peso devaluation, it is annoying that you never really know how much the rate will be or how much pesos you need to deposit.
Yes. You can get lucky and get a big devaluation or you might get a stable USD with an exploding CAC (obviously the dollar will appreciate but the question is how much versus CAC). The monoambiente is on the 7th floor facing the garden.
Ah got it, yes that might explain the price difference; my monoambiente is on the 5th floor and was around 104k. But I think they also increased prices because the project is further advanced now (that tends to happen over time, and that is when early investors can start deciding to sell their “boleto”)
Wouldn’t mind paying extra if they had that financing. Let’s see what they say about that. How much are these prices negotiable when buying in pozo in your experience?
In Croatia (beachfront) most you can get is like 33-40% discount if you pay up 90% up front as an investor in the project and take on the construction company risk that they will finish (normally in 3 years) and you pay the last 10% when it's done. So you can pay 2100 EUR/m2 for something that you can sell for 3350 EUR/m2 in 3 years for example (actual project I know). Altho in those 3 years 2019-2021 prices appreciated to 4000 EUR/m2 so the owner sold it for double. And project was completed in 2.5 years actually before the schedule. But I wouldn't do this now as you'd need to pay 3000 EUR/m2 and take on the company risk and hope prices stay at 4000 EUR/m2 in 3 years, actually they are even higher now at like 4500 (inflated, but imo buyers are exhausted). With recession coming up and saturated market and int. rates rising ... Just so much value elsewhere
Altho funny thing is if you told me in 2019 that Covid is coming for sure I'd tell you not to invest in this but as life goes you can be wrong even if you knew the future. Construction workers wanted jobs (no shortage), credit was cheap and outdoor workers were allowed to work during C19 so they built things even faster than now and every company got bailed out with revolving credit, etc.
Wow, doubling your money in such a short time is impressive, and amazing that it worked during the pandemic. But yes, like you said: it becomes risky at those prices. Right now I think RE prices might drop a bit more after the pre-elections in August here, so that could be an interesting entry. Still compared to having it liquid and paying dividends it’s a lot of hassle in comparison, but those fixed USD installments are really a no brainer for me in terms of diversification.