Still Possible: 100% Upside in Oceanfront Property
by Dr. Steve Sjuggerud
May 10, 2006
About ten years ago, Mike Cobb made his first substantial international real estate investment, and became an owner in a resort in the Caribbean.
It was a life-changing decision.
But it wasn’t easy. Between hurricanes and unscrupulous local employees (“holes in the cash register,” Mike calls ‘em), making the resort profitable was next to impossible.
“I didn’t know what I didn’t know,” Mike says. Then he came to a big conclusion: To do it right, I have to be there…
So about four years ago, Mike did the unthinkable… he moved his wife and child from their suburban, white-picket-fence lifestyle outside of D.C. to – get this – Nicaragua.
I consider myself somewhat of Nicaragua pioneer… I first went there in 1993 and built a house there in the late 1990s. I’ve always said, “as long as Americans think of Nicaragua as Russia With Palm Trees, it’ll be a good buy.”
But I never committed to it like Mike has… nobody has.
I call Mike Cobb the “Indiana Jones of Investing.” He’s not afraid to go anywhere he sees opportunity. He saw opportunity, and went after it. Mike and some investors bought 3.5 miles of beachfront land in Nicaragua, less than an hour from the international airport.
Mike needed to be on the ground to make it happen, hounding contractors and the government, and meeting with potential real estate buyers as they came to town. He took it upon himself to make this project work.
I was skeptical at first… it was awfully large project. His was the second major coastal project in the country, after Rancho Santana. From what I’ve seen, projects fail in “fringe” destinations because they run out of money, not because they’re bad ideas. Mike was going to need a heck of a lot of money, and a little luck…
I never said it to him, but I thought Mike needed a bull market in real estate to get his massive project to critical mass. To give you an idea of how this project can just swallow up cash, Mike had already spent millions, and the first time he drove me to the beach at “Gran Pacifica,” there was no path yet… We were knocking over small trees in his four-wheel drive to get to the beach.
Times have changed, massively…
Mike Cobb got the luck he needed… After a somewhat slow start, coastal real estate prices are soaring in Nicaragua. Many homes are now being built at Gran Pacifica. Golf is coming in. One condo building is sold out and is now under construction. Over 100 lots have been sold that require owners to build within two years of buying, which will help create a real community, instead of a “ghost town” of lots.
I’ve always been a supporter of Mike. Porter Stansberry and I bought what I think is the premier lot in his development so far, and we’ll build a beach house there that we’ll hopefully use with our families for decades.
While prices have soared, I still think there’s still 100% of upside on the table here. Nicaragua is right next door to Costa Rica, and offers the same climate, coastline, fishing, etc. Only the prices are much lower.
Is there risk? Absolutely. A U.S. recession would undoubtedly knock prices down. And of course there’s political risk. Because of the risk, Nicaraguan prices will never come close to California prices, or even Costa Rica prices. But right now there’s a limited supply of quality accessible beachfront properties in Nicaragua. Meanwhile, the demand keeps on coming.
I know two real estate developments in Nicaragua particularly well… years ago, I built a home in Rancho Santana (www.ranchosantana.com), and now as an owner at Mike’s project, Gran Pacifica, I’ll soon be building a home there too (www.granpacifica.com).
I’ve met a lot of realtors in Nicaraguan over the years. Honestly, I didn’t trust most of them. The most solid realtor I know there is Barry Oliver. Barry is an American who worked for a tech company, and got out around 2000 and moved to Central America.
Barry’s ideal… He’s responsible. He knows the entire coastline better than anyone (as he’s a great surfer always looking for an undiscovered wave). He married a Central American woman, so he knows the local scoop and speaks perfect Spanish.
He opened the first Century 21 office on the coast in Nicaragua. And he’s set up a U.S. phone number that actually reaches his office in Nicaragua: (904) 430-2022 His email is: barry@c21sanjuandelsur.com You can reach Mike Cobb by email at mmmcobb@aol.com
Investing in Nicaragua real estate is risky, no doubt. Also by buying now, you’re buying at the bottom. However, it’s really just now receiving some mainstream coverage. The trend is up, and I expect it will be for a few more years.
If you follow our DailyWealth mantra of buying hated quality assets, cheaply, once the uptrend is in place, you have to at least consider Nicaraguan real estate…
Good investing,
Steve
Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments.
Sign up today to read more investment ideas from Steve Sjuggerud.
