If you’ve been tuning into the show for a while, will you know that I’ve been investing in a project in meting Columbia, been building a boutique hotel resort for the last three years, and I’ve been teasing at some of the details.

Well, today I want to give you some insights, pull back the curtain and talk about some of the opportunities and some of the risks. ’cause I’ll tell you, it has not been a smooth ride. But there is light at the end of the tunnel.

So for any of you considering a new construction project or considering investing in a foreign country, well, stay tuned and welcome back to the short-term Real Richest podcast.

Well, you know what they say no risk, no reward, right? Well, I don’t think it’s any different. For a foreigner investing in another country, especially on a new construction project. So today we’re talking about my boutique hotel resort project in Meine Columbia that I’m currently building with a partner.

I am excited to say that we’re very close to launching the first units, but it has not been without a lot of struggles.

Lemme start off with the pros, the reasons why this project was appealing. First of all, I’m no stranger to Columbia. I’ve been going there for the last 10 years. I purchased my first property there back in 2017, where I lived pretty much year round for several years.

A lot of things have changed since then, and I now spend most of my time in Brazil, actually. And so this project is happening from a distance. But we do have a really good team on the ground. So some of the pros that attract, I mean, first of all, I was familiar with this area. I knew all of the market because I’m a real estate guy and I can’t help just understanding the local real estate markets, especially where I’m living.

And so I did see a lot of opportunity.One of the things that has been obvious is the amount of tourism coming into Columbia. Millions and millions of tourists are coming into Columbia and specifically ine each and every year. A lot of them from the us, a lot from Canada, a lot from Europe. You name it all over the world, people are showing up in Columbia because it’s a beautiful country and there are beautiful people there, And the cost of living for most of you, living outside of South America is considerably lower

Well. If you’re a US citizen, like most of our audiences, although we do have listeners in over 125 countries, so want to thank all of you for tuning in over the years. It’s been a fun journey. Uh, it’s definitely had its ups and downs and we’ve learned a ton, but we’re sticking with it and we know that professional operators in this space will continue to prevail and that there’s a lot of opportunity left.

So that’s the first thing. This market has more people visiting it each and every year, and it’s been like that since the last 10 years where I’ve personally been visiting the property now as a US citizen that earns most of my money in US dollars. The US dollar has also been at an all time high over the last few years.

Yes, over the last year. It’s come down considerably. And this is one of the risks with investing internationally.

But while your dollar is high, that means that if you’re buying construction materials in Columbia, for example, that it’s actually costing you less because they’re not adjusting their materials based off what the dollar’s valued at. Right? It also means that labor costs are less, even though labor costs are drastically lower in South America than they are in the us.

Another one of the reasons why I got excited about this project.

So strong demand, strong dollar and strong revenue potential because these short term rentals we’re building 20 are going to be rented to foreigners that are used to paying in dollars. So we’re actually able to build in Colombian pesos construction materials and run our operation using Colombian pesos, But many times receive reservations priced in American dollar prices.

But before we get into too many more details, let me start off by saying that I would not recommend an international investment for someone, first of all, that isn’t familiar with the country, that doesn’t speak the language, and that doesn’t have a local team to help accomplish the project that you’re set out to do.

I have a partner on this project. He’s lived in Meine for, gosh, I don’t know, 12, 15 years. He’s already worked with the same architect that’s building our project, and our architects also built other successful projects in the past, which I’ve personally visited. And so I had a lot of trust going into this deal before I got started.

If I didn’t have that team on the ground and I didn’t live in the area, well, I definitely wouldn’t have ventured out on this project

I know for a fact that my favorite thing in life is not to manage. A construction project. Uh, and so luckily we had a great person on our team that’s been helping us and has helped us through these last three years.

As I record this today, several years later, the US dollar has gotten considerably weaker. I did a podcast episode, actually, if you go way back to episode 79, where I purchased a property in Brazil. That was almost about five years ago, and that was at that time the highest exchange rate between the US dollar and the Brazilian real almost in history.

So I really lucked out with that one, and I’m happy to say that project has gone really well. That’s a property where I personally stay a good part of the year, and that city BA has grown to be the highest cost per square meter in all of Brazil.

So I really lucked out with that one. Of course, I don’t earn money back on appreciation unless I actually sell the property. Right, and I’m still living in it. But it does create some more opportunities, so just keep that in mind. The opportunity to have the exchange on your side can also go the other way.

So if you’re interested in purchasing a property internationally, you can go back and check out episode 79. I talk about a lot of the basic, fundamental things that you’ll want to keep in mind when looking for a property, working with a lawyer. All those sorts of fun things. But for today, let’s get back into the Metagene project, and I wanna talk about the supply and demand because just as all of the tourism has been growing really rapidly in Metagene, it’s also attracted investors.

And so we have new hotels entering the city at an incredible pace. There are literally thousands of units being added to Metagene for short-term rental approved buildings. And now if I rewind back three years ago, this was not as prevalent and the regulations were also ticking up. So a lot of properties in the area were getting pulled off the market.

So just as we’ve seen all across the US, as supply goes up. Well, if demand is not keeping up, if there’s more options, then prices go down.

So we always gotta keep an eye on supply and demand, and if it’s a new construction project with a really long timeline. You need to be prepared for that now, I feel really lucky because this project, this boutique resort, is very unique. It’s not a traditional hotel style setup. It’s not a tall building.

Actually, there’s three different designs on this lot. So the, the lot itself is a hectare, which is a little over two acres, and it’s situated right on the side of the mountain with a beautiful view of the city, 20 minutes or so from the airport, but also a quick Uber ride to some of the areas best restaurants and most trendy neighborhoods.

For those of you catching the video, we’ll make sure to put lots of images and videos of our progress and the construction over these last few years in the background so that you can follow along.

So this project is unique for multiple reasons. The location for sure is unlike most locations in all the city, you get the peace and tranquility while being basically in the city, and that is not very common.

The other thing is the actual design. And so our architect has done an amazing job. He brings a lot of nature elements into the project, and I observed this in his last project. For any of you that have maybe visited Meine, he built a beautiful project called Bosco out in Guap pe.

That’s this place that has all these beautiful lakes. And a lot of people visit when they come to Metagene for the first time. So I, I’ve seen his work before. And he’s brought that to our project as well. And so for our first phase of rental units, they’re sort of like cabanas, but they’re luxurious. They have kitchens, they have laundry, they all have jacuzzis overlooking the city.

And this is a type of property that really just can’t find

and so while there’s lots of supply coming onto the market, I do feel very confident that these properties are gonna do well because, and we talk about this all the time on this channel, and they’re going to stand out.

Now, getting these first eight units up, which are almost complete now, almost three years later was not that easy. There was a lot of struggles along the way. In fact, when we first bought the lot, which was about 3.25 billion pesos, and before you go out screaming and saying, Tim, this sounds absurd.

Billions of pesos. That’s not as much as you think. Yes, it’s still quite a lot. Depends on the exchange rate, but roughly $800,000 for these two acres. Remember, this lot is in town. It’s in a prime location, so it is likely more expensive than you were imagining.

And while I do know that I am an expert at all things short-term rentals, I’ve literally lived and breathed short-term rentals with my portfolio and taught about it on the show for over a decade. I don’t have an exact number of how well these properties are going to do because they are unique and because supply is changing every month.

So if you were to look up Air DNA, yes, it’s helpful. It gives you some good insight. But what we’ve done is basically come up with a range, and I expect these properties to rent anywhere from 150 to $350 a night. Obviously, that’s a big range. And so if you’ve got a project out there with a big range like that, you need to be comfortable with the conservative side, the $150, in which case we are with this project.

Now, there was a lot of infrastructure that went into this project. There was no sewer, there was no water, there was no electrical. And to go through the permit process and the licensing, we had lots of hiccups because this was a agricultural lot zoned commercially. We purchased it with an existing license.

Hoping to modify the license. That’s what we were told. And long story short, we weren’t able to do that and it took us about 18 months to get a new license. And so again, just like in the US new construction projects can take a really long time before you even start building because of the planning, because of the infrastructure and that infrastructure is also costly.

So at this stage of the game, we’ve got almost eight units built. We have an entrance building, which is very lovely. It’ll have a 24 hour security person. It’ll have reception, it has backup electrical. It has a spot for our it, it has a laundry facility. We have eight cabanas up and we have the infrastructure for the whole lot.

And we’re into the project almost about $2 million. Now, of course, the, the exchange rate has been fluctuating over the last few years,

but up until now we have had zero return. So you better believe, I’m excited to get these first units up and going. If we look at the cost of the actual units themself. They’re around $65,000. Now, you’ll see in the photos, these are unique properties, and if they rent for on average $200 a night at maybe a 65% occupancy, these eight units should bring in almost around $400,000 a year.

That is, of course, before expenses, but remember, labor in South America is a lot cheaper, so we’re really just looking at electricity, utilities, and some light supplies. 

Now, because of all the infrastructure, the time this took, the licensing, if you look at those numbers today, and mind you, this is all cash because as a foreigner it’s not very easy to get a loan outside of your. Your home country, if you look at those returns right now, they’re not that great, but they could be as much as 20% per year.

And again, that is not considering a loan. So if we were able to leverage the project. That return would go much higher. Now, where our opportunity lies is that we already have the licensing. We already have the infrastructure for 12 more units. So you can see our potential return can go up massively from here.

Now, a cool thing about this lot as well is that we have it licensed for a restaurant, and I am not a restaurant entrepreneur. I don’t know much about restaurants at all, but fortunately. I do have a partner that already has a restaurant, and I’m excited for him to bring in his expertise and for me and our team to bring in our expertise on the operations.

If you’re new to the show and you’re looking for help operating your property, well, my team and I have managed properties in over 40 cities and yes, in various countries. You can check us out@triches.com or our company website, which is corley, C-O-R-Z-L y.com. There’s a partner with us button up there.

We’d love to schedule. Quick call, see if your property makes for a good fit with our team.

Okay. So those are the basic numbers. There’s a lot of opportunity for this property. It is truly unique. And so I’ll be reporting back maybe in another six, nine months, let you know how these first units are going and how the new construction is coming along.

I don’t wanna say any of this has been easy though, even really intimately knowing the city and being a real estate guy, this has taken much longer than anticipated. So a few words of wisdom for you out there if you’re considering a new construction project. Well. Make sure that you’ve got the budget for it or you have options, and understand that the timelines could take much, much longer.

So really take a hard look at that project and ask yourself, if this took a year or two years, or three years longer than I anticipated, would I still be interested in the project?

Would I still see the opportunity?

The other thing to keep in mind, if it is an international property, do you plan on spending a lot of time there? Because a project like this does require some involvement, right? It’s not like you can just pop up a 20 unit hotel and be off to the races.

All right, so there you have it. There are some insider details. Yes, the project’s taken longer than expected, but it is turning out very nicely. It is truly unique.

You wanna stay in the property or have someone that you trust stay at the property and work out the kinks. I know for sure there were a lot of kinks that we’re still working out with these units. After having stayed in them. So stay tuned. In the near future, we’ll come back with the numbers and yes, where there is a lot of risk, there can also be a lot of reward.

It’s a little too early to say, but I’ve got my fingers crossed and I’m staying positive, and I think this project is gonna be a really, really amazing project for the long run. Until next time, I hope you have a fabulous week.