The Best Investment I’ve Ever Heard Of…

in Investing/Plan to stay/Rent / buy apartment

I have a friend in Cali. Let’s call him Jack.

Jack is from the UK and moved to Cali in the early 80s. He has lived here ever since. Judging by his appearance, you may not think that Jack is among the best investors that you’ve ever met. Jack likes beer, tequila and women. He drives an old Chevrolet pickup truck. He’s a character and a lot of fun.

A few weeks ago, while driving through the historic district of San Antonio in Cali, I saw an old house being remodeled. A neighbor told me that they were making a little boutique hotel. Another guy told me that the seller of the house was Jack – my old friend.

3 days ago, while having my Sunday lunch at Pampero’s steakhouse, I ran into Jack. Out of curiosity, I asked him if it was true that he had sold the house in San Antonio. He confirmed. What he proceeded to tell me blew my mind…

Jack bought the property in 1988 for $1.400.000 peso and sold it again 27 years later, in 2015, for $600 million pesos. Profit was $598.600.000. That’s an astonishing return on investment of 42,757% – the same as earning 427 times your original investment. And please note that this does not take into account all the cash flow that the property produced during the 27 years that Jack owned it and rented it out. This is only the appreciation of the equity. A hell of a way to beat inflation.

To put this into contrast, the best bet the casino will give you on the roulette is 35 times your original investment and your odds are 1:37 (numbers 0-36). Your chance of winning is a paltry 2,7%.

I like numbers, so when I came home I decided to calculate the annualized gains from Jack’s investment. It came out 25% a year. Twenty-five percent compounded over 27 years led to these amazing gains of 42,757%. For comparison, Warren Buffett has produced annualized gains of 19,7% since 1962, which has made him one of the richest guys on the planet.

You may wonder, why should this be interesting to you? The reason is that…

First American Realty is opening an office in Cali

First American Realty from Medellin was founded by Rich Holman back in 2006. Today, there are several partners, 60+ employees, and offices in Bogotá, Cartagena and now Cali. I’m proud to announce that I will be the managing partner of the Cali office.

First American Realty specializes in helping foreigners buy and invest in Colombian real estate. The business is divided into 4 segments: Residential sales, Property Management, Design and Remodeling Services and Investments.

While we plan to offer the entire palette here in Cali, the current market situation consisting of a very weak Colombian peso and a very cheap price per square meter, has made us dive head-first into our investment projects. These projects are interesting because they allow you – an outsider – to invest alongside us. We call our projects a PREP: Pre-packaged Real Estate Properties.

PREP

We essentially find an old, undervalued building in a great location and turn it into an apartment hotel with anywhere from 3 to 20 units. Our standards are very high and we intend to compete with the 4-5 star hotels. Investors will become partners in our projects and earn a preferred 8% annual dividend. On top of that comes the equity appreciation (remember Jack?) and currency speculation. If the exchange rate returns to its 10-year average, then investors will have earned a 40% ROI just from this single parameter.

Please understand that this is a well-tested business model with an impeccable timing. First American Realty has already completed 11 of these projects and several more are underway.

Our first project in Cali is an old building in the heart of Cali’s premier hotel and gastronomic district, El Peñon. The building is under contract and we are currently doing our fundraising. If this is an opportunity that has attracted your attention, please click here to download the full investment prospectus. As an added benefit, investors will also be eligible to apply for the attractive Colombians investor’s visa. We’ve produced a little presentation about the investor’s visa which can be accessed here.

According to the local organization, Cotelvalle, first quarter tourism in Cali is up 25% from 2015-16. The local airport is spending 200,000 million pesos ($66 million dollars) on enlarging and improving the terminal. Things are happening… a boom is building.

The question is: Will you be onboard for the ride?

Passed through Cali for the first time in 2011, on his way from the US to Brazil on a motorcycle. Ended up kissing a caleña on his last night and the rest is history. Has been a resident of Cali, Colombia since 2013 and currently living in Barrio Bellavista with his girlfriend and 2 daughters.

5 Comments

  1. I am in awe of your site, your knowledge, and your writing. I am packing my apartment up here in Houston TX and have decided that I need and want a better life. I am moving to Cali Colombia in hopes that I will feel like I belong and have found a home…if not I will try another part of Colombia or Sri Lanka 😉 I appreciate all the info and hope to buy you a beer in Feb. of 2017

    • We look forward to seeing you in Cali and adding you to the growing number of expats who choose the “Sucursal del Cielo” as their home.

  2. Hello patric, i was wondering where to find the prices of properties is cali?
    Whats a good price per squaremeter?(property buy-not rent in cali).
    What extra costs of buying do i have to take into account?
    Thankyou patrik.
    Any other tips? 🙂

    • A good price for something to renovate in estrato 4-6 is $1.000.000 to $1.500.000. Closing costs are around 1.5% for buyer + 4×1000 financial tax to government when bringing cash in.

  3. Hi Patrick,

    compliments for your blog. I just found it and really like your writing stile and even more your entrepreneurial spirit.

    To your friend’s yield: Warren Buffett said “Buy when there’s blood in the streets”. Your friend Jack literally did that. He invested in the 80’s during a time of high violence when Colombia was one of the most dangerous places. That’s why I’m not really astonished by his high yield. He did a bet and he won it.

    Cheers

Leave a Reply

Your email address will not be published.

*