September 30, 2024 • 33 mins
Welcome to episode #14 of RealtyCast Global – a global connection to all things real estate, hosted by Hugh Gilliam, president of Global Property Pros.
Can you really leverage perception to maximize your property investments in Central America? Join us as Michael Cobb unravels the secrets of investing in this dynamic region. We kick things off with a deep dive into the critical concept of "buyer beware," emphasizing the necessity of being well-informed before making any property purchases. Listen as we dissect the stark contrasts between property values in Costa Rica and Nicaragua, uncovering how perception often dictates price more than actual safety or quality. We share insights from the Overseas Investment Guide, demonstrating how knowledge gaps can create lucrative opportunities and why staying ahead of changing perceptions is essential for savvy investors.
Moving forward, we explore the nuanced landscape of investing in popular versus less popular Central American locations. Compare the immediate costs and long-term returns of investing in high-demand areas like Costa Rica with those of under-the-radar spots like Nicaragua. Discover why Belize, specifically Ambergris Caye, emerges as a balanced investment option with promising growth potential. We delve into the robust healthcare and educational systems that make Central America an attractive destination for families and remote workers. Whether you're contemplating a move or seeking to diversify your investment portfolio, this episode equips you with the knowledge to make informed decisions.
Visit blog.realtyhive.com for more details on this episode.
About the guest - Michael Cobb:
Mr. Cobb transitioned from a successful tech career into Central American real estate. and co-founded Exotic Caye International (1996), offering loans to North Americans buying property across Belize and Honduras. The company transformed into an international bank in Belize, expanding services beyond mortgages. Recognizing a need for quality real estate catering to Baby Boomers, Cobb led into development, including an Ambergris Caye resort. They also bought beachfront property in Nicaragua (2000) and on the coastline in Costa Rica (2006). Mr. Cobb has spoken at global conferences, consulted for The Oxford Club, a
About the host - Hugh Gilliam:
Hugh Gilliam co-owned a national transportation company, created a land development business, and worked as a general contractor in residential and commercial construction for over two decades. Hugh also co-founded an international distribution company and successfully negotiated and contracted with 135 sales representatives in the United States, Canada, France, Brazil, Japan, and the Netherlands.
Today, Mr. Gilliam is affiliated with RealtyHive, LLC where he serves as Director of International Real Estate and President of Global Property Pros. His duties include involvement in commercial and residential transactions, plus promoting marketing systems and lead generation platforms.
For real estate professionals looking to take their business to the next level, check out Global Property Pros!
He is also co-founder of the luxury digital magazine, DOORWAYS INTERNATIONAL, powered by RealtyHive, which serves as a platform for Brokers and Buyers throughout 70 countries.
Hugh's Designations Include:
- Certified Luxury Home Marketing Specialist
- Certified Distressed Property Export
- Certified International Property Specialist
- Certified International Investment & Immigration Specialist
- Transnational Referral Certific
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Hugh Gilliam (00:01):
Welcome to RealtyCast Global, where we
bring insights and advice fromtop professionals in the global
market.
Join us for a journey ofculture and real estate from
countries across the globe.
Welcome back, Michael.
Episode 3, Investing in CentralAmerica.
We have learned a lot ofinformation about what to do and
(00:26):
what not to do, and there's onestatement that you say and I've
thought about it over and overand over you don't know until
you know.
And I think if we could walkaway with one thing today, it's
buyer beware.
The second thing would be youdon't know until you know, and
(00:48):
there's a meaning behind that.
It goes beyond words.
It's about being educatedbefore you make that first step,
and don't just fly into thecountry and say, oh my gosh, how
wonderful it would be to have avacation home here and I could
do this, this and this, and allof a sudden you bought it, and
then the problems begin,sometimes if you don't do your
(01:09):
homework.
Sometimes if you don't do yourhomework, as we talk about
investing in overseas properties, you've put together a
wonderful document calledOverseas Investment Guide.
This is one of three that I'veseen.
You may have more and we'regoing to put that in the episode
(01:30):
description, part of ourepisode, so that you can see,
our viewers can see, how to getone of these investment books,
because I think it's importantto have this if you're thinking
about anything beyond the UnitedStates as far as investments,
(01:50):
the first question why you havewritten about perception and
reality as the primaryinvestment factor in the region,
sure, yeah, you know, in themarkets, like in Wall Street, in
(02:11):
the financial markets, there'sa term called arbitrage, and
arbitrage is basically aknowledge gap.
Michael Cobb (02:38):
Right, it's an information gap, and I remember,
in fact, they made a movieabout this.
It's an information gap, and Iremember, in fact, they made a
movie about this where they laida line in New York City, could
transact on information thatnobody else had Right, until it
got there a second later.
So they could be they.
It was an information gap, itwas arbitrage, right, and they
could make the money in the whatI call the information gap.
(02:58):
Well, central America, somecountries more than others,
right, have this incredibleperception gap.
I would say look, the Zogbycompany did a survey of 103,000
US citizens.
I mean, that is a hugestatistical sample, right?
103,000 US citizens weresurveyed, 11.6 had said that
(03:22):
they had seriously consideredowning property overseas.
So let's just call that one outof 10, 11.6, one out of 10,
right.
So one out of 10 people hasseriously considered owning
property overseas.
One out of 10 US citizens,right, but nine out of 10
haven't.
Let's be very clear, the biggernumber just never has
considered it.
And so, from a perceptionstandpoint, even a country
(03:44):
that's done a tremendous job ofpublic relations.
Costa Rica, oh my gosh.
They may have been the bestpublic hired, the best public
relations firm ever to turntheir country into this
unbelievable destination.
Right, it's just Costa Rica, oh, costa Rica.
Oh, okay, fine, I mean,whatever you love it, hate it,
(04:04):
doesn't matter, but they did atremendous job of selling their
country right?
But even so, many, many, manyAmericans would look at Costa
Rica and go oh my gosh, I wouldnever go there.
I don't want to get killed,right, or whatever.
You know right.
Mexico, oh, mexico, is reallydangerous.
Nicaragua, you got to bekidding me.
You know whatever, right?
And so you've got thisperception, even on the part of
(04:27):
people who do travel, right,it's very.
They might think, oh, I'd go toCosta Rica, but there's no way
in heck you'd get me toNicaragua, right, okay?
When in actuality, the crimestatistics in Nicaragua and
Costa Rica are almost identical.
Sometimes Nicaragua is a littlesafer, sometimes Costa Rica is
a little safer.
But you wouldn't know that fromperception right.
From perception, you'd think,oh, nicaragua, I'm going to get
(04:50):
killed if I go there.
Costa Rica can't wait, lookingforward to my vacation, whatever
.
So you have this perception gap,and what the perception gap
does is it largely in many cases, determines pricing, right.
So, for example, when we likeNicaragua and Costa Rica border
right, costa Rica is on thesouthern part of Nicaragua.
(05:12):
If you literally took a pieceof property in Costa Rica in 10
miles south of the Nicaraguanborder, right on the Pacific
Ocean, you said I want to buy ahalf acre lot on the Pacific
Ocean in Costa Rica, 10 milesfrom Nicaragua, you'd pay I
don't know three, four, $500,000for the property.
Pick the number, but that kindof number, maybe more, maybe
half a million and up, right.
(05:33):
If you literally went 10 milesinto Nicaragua and bought the
exact same property same ocean,same view, same weather, same
everything you might pay $2,250,right.
So it's half price, right, andthere's no difference except for
perception.
Perception is the difference.
Now, the nice thing aboutperception is that it changes
(05:57):
right.
Things can go up, things can godown, right, and so generally
what we've seen over you know myexperience, 30 years of working
in the region is thatperceptions of the region have
gotten better, some countriesfaster than others, some
countries slower than others,but the perception is getting
better.
And as the perception getsbetter, this arbitrage closes,
(06:20):
this perception gap closes, themoney is getting made by
somebody.
And so why this perception gapis so important, right, and why
we talk about it in theinvestor's guide is that if you
can be ahead of a change inperception for the better, right
, but sometimes changeperceptions for the worst too,
(06:42):
don't get me wrong.
I mean it can go either way.
Future is hard to predict, ofcourse, right, but generally
over a longer term 5, 10, 15years the perception in the
region has gone up and if youcan be ahead of the perception
with your purchase price and letperception catch up to it, you
made the money in the middle.
You, the investor, made themoney in the middle, and that is
(07:06):
the importance of perceptionversus reality.
And again, each country hastracked differently.
Each country's had its ups andits downs and definitely it's
not a straight line, it's abumpy line.
But overall the countries ofthe region have largely gotten
better in their perception onthe part of many North American
property buyers and vacationers,and that bodes well for the
(07:31):
people that bought when theperception was negative or not
popular.
Hugh Gilliam (07:36):
So it's kind of an ever-changing thing.
You're talking about perceptionFor the positive, as I would
say, is the right type ofadvertisements, and you see
great things happening, peoplemoving large hotels into the
(07:59):
area and you see a little bitmore stability.
That perception maybe changessome in the mind of the investor
that's moving there.
Michael Cobb (08:09):
So I think that's or the traveler, yeah.
Hugh Gilliam (08:11):
Or the traveler.
Michael Cobb (08:11):
Yeah, right.
Hugh Gilliam (08:12):
Yeah, I think that's a great thing to think
about.
I've never really thought aboutit that way.
You also produce a path ofprogress chart.
You produce that, a path ofprogress chart.
You produce that, and why wouldthat?
Be important to me or you, asan investor, a path of a path of
progress chart.
Michael Cobb (08:33):
Right, you know, and we touched on this last last
time when we're talking aboutBelize.
But this is that chart Rightand we say I mean basically
countries like Nicaragua notvery popular pacific side of
costa rica, very popular right,and so I call it the investment
return curve, right, and it is apath of progress curve, but
(08:54):
it's also a popularity curve andI think, fundamentally, you
know you've got, you've got two,two things going on.
One is you development right,path of progress, and some
progress can be internallygenerated, right.
A country either gets moneyfrom the World Bank or it has
its own tax base and it investsthat money in infrastructure
(09:15):
roads, bridges, publictransportation, whatever it is,
telecommunicationsinfrastructure, although a lot
of that tends to be privatesector, thank goodness.
A lot of that tends to beprivate sector, thank goodness.
And so you know, so you've gotinvestment in, just call it,
general infrastructure that candrive this development curve or
this path of progress curve,right, but the other piece of it
(09:35):
, when it really comes down tothe typical North American
investor, most North Americans,very few North Americans are
investing in telecommunicationsor, or, or, or, makila
manufacturing or call centers,although you know there is that
type of investment as well, butyou're in the, you're in the
real estate business, I'm in thereal estate business.
Most real estate investors arelooking for appreciation and
(09:59):
cash flow, most people lookingfor cash flow over appreciation,
right, as investors in the realestate space, and so you know.
So, while we have thisinfrastructure piece the
telecommunication, roads, water,blah, blah, blah kind of ground
up being generated not by us asinvestors, right, you've also
got this piece that has to dowith popularity, and the
(10:20):
popularity piece is, well, howmany people are traveling there,
right, I mean?
And to use the analogy of ahoneymoon couple, right, that's
really how I put these countriesor locations within a country
on the chart.
I just simply said if somebodygot married this weekend, where
are they going on theirhoneymoon next Monday?
And you know, not many going toNicaragua, and a whole bunch of
(10:44):
them go into Costa Rica andthen everything in between.
So this popularity effecttraveler, overnight visitor
really has a lot to do with twothings One, the price of
acquisition and two, the amountof cash flow that you might
expect.
Because, again, if it's popular, that means there's lots of
honeymooners and travelerscoming down.
(11:05):
They're staying in your, inyour condo or your home, they're
renting it.
However you do it vrbo or youknow whatever, or it's a branded
product, something like that.
Anyway, the overnight occupancyis what's generating cash flow
in a very popular destination.
You're going to pay more forthat.
You're going to pay more toacquire the asset.
If you buy something in a lesspopular country or a less
popular location, then you'regoing to pay less.
You're going to pay more toacquire the asset.
If you buy something in a lesspopular country or a less
(11:26):
popular location, then you'regoing to pay less.
Your acquisition costs will belower.
Your occupancy early years willdefinitely be lower, right,
your ADRs average daily ratewill be lower.
If you're a patient investor andyou say, look, I got a three,
five, seven-year timeline, Iwould rather acquire, I'm going
to use really simple numbers$100,000 versus $200,000,
(11:47):
because I can do the math in myhead, right?
So let's say you boughtsomething in Nicaragua for
$100,000 versus something inCosta Rica for $200,000, right.
Something in Nicaragua for $100versus something in Costa Rica
for $200, right.
And your occupancies were equal.
But they wouldn't be.
But let's just say youroccupancies were equal, right?
50% occupancy, you know.
$100 a night, right?
So that's what?
$365 divided by two, that's$17,000.
(12:09):
You know, in Costa Rica, let'sjust say, your average daily
rate was $200 a night.
Well, now you're at $34,000, ormaybe it's $36,000, whatever.
Anyway, but you see the pointright.
But your cost was $200 toachieve a higher cash flow.
But your ROI might actually belower because you're basing it
(12:31):
on a $200,000 acquisition cost,right.
Whereas if you're willing tospend $100,000 and take a longer
timeframe, like as it goes,your acquisition cost is
$100,000.
That's fixed.
You've spent that right.
As your occupancy goes from 50%to 60% and your ADRs go from
100% to 120% to 150%, your ROI,by the time you get to a
(12:53):
property that's worth $200,000that you only paid $100,000 for
ROI, by the time you get to aproperty that's worth 200 that
you only paid 100 for, now yourROI might be, like you know,
high, you know whatever.
I mean 15, 18, 20, 24%, righton your original cash flow, on
your original acquisition cost,right.
And so, on the other hand,maybe the cut this is why it's
an investment you win, you lose,you're an investor, risk,
(13:14):
reward, reward.
On the other hand, it flatlinesand it never becomes more
popular.
Or, you know, god forbid ittanks and it gets really
unpopular, right.
I mean that's the risk side ofthe equation, right.
But the reward side again over.
In most cases, you know 3, 5, 7, 10 years like, what's going to
happen is you're going to gethigher ADRs, higher occupancy,
(13:38):
but your fixed cost is muchlower.
But there are people who say Idon't want that risk, I'd rather
just buy something in CostaRica for $200,000, $300,000.
I'd rather have a lower ROI buta much more predictable
investment.
And so those are the twoextremes.
A country like Belize, I think,sits in the sweet spot.
(13:59):
It's climbed maybe halfway upthe popularity curve.
The acquisition prices arestill very, very reasonable.
There's a lot of room forappreciation of the asset, but
it's already popular enough tocash flow very, very well.
And as it continues to climb inpopularity, occupancy rates,
adrs should go up as well.
(14:19):
So you can kind of bookend it.
Not very popular, most risk,very popular, least risk,
something in the middle, thatkind of maybe the sweet spot
that lets you catch the rest ofthe curve up.
So anyway, that would be my whythat curve is important and how
we as investors, with differenttimelines, really would look at
(14:40):
where we would want to positionour investment, you know, along
that curve.
Hugh Gilliam (14:45):
That makes complete sense.
But let me ask you this I'm nottrying to put you on the spot,
but if you were to determinetoday which region in Central
America would be the best regionto invest in, what would that
be?
What region would that be?
Michael Cobb (15:03):
You know I am very specific.
People ask me this question alot and I answer it right now.
I've answered it for about ayear this way and I'll probably
answer it for another year totwo years.
I think there's a three-yearwindow and we're about a year
into it right now.
Belize, generally, ambergus Key, more specifically the Best
(15:25):
Western Studio Condos veryspecifically.
It's a branded product, itserves a mainstream traveler, it
serves a cruise ship kind ofcustomer right.
It's a middle-class product,it's a two, three-star product
and again, this is the idea.
A lot of times people get hungup.
Well, I don't like Best Western.
You know what?
(15:45):
I don't like Hawaiian pizza.
But if I owned a pizza parlor Iwould sell Hawaiian pizza
Because it's not about what Ilike, it's about what the person
walking through the door likes,right.
And so, you know, a lot oftimes people kind of get hung up
on this idea.
Well, I don't want to.
I would never stay in a BestWestern.
Ok, you know what, if you got,if you got one hundred fifty,
(16:12):
one hundred sixty thousanddollars to invest in a, you know
, in a, in a, in a property,you're right, you're probably
not staying in the Best Western,right?
But?
But there are a lot of peoplewho do, because it's a very
price point product, it's an,it's an, it's the only off water
, it's three blocks off thewater.
So I mean, literally, you know,five minute walk, you're at the
beach, right, but you're notpaying beachfront prices.
You're paying one hundredtwenty hundred fifty bucks a
night to stay there.
That traveler, that middle classtraveler looking for certainty
(16:35):
of product, they know whatthey're going to get, it's a
standard.
They're going to get the bestWestern right.
And so for that traveler thereis no other option on the island
of Ambergus Key.
And so again, belize generally,because it's really in the
sweet spot of the curve, spot ofthe curve, ambergis Cay,
(16:57):
because that tiny little islandoff the coast of Belize
generates 70% of all the tourismrevenue for the country of
Belize.
And then the Best WesternStudios, because it's a branded
product off the water for amiddle-class consumer and
there's no competition for thatproduct on the island today.
That to me, is bullseye,bullseye, bullseye.
Hugh Gilliam (17:17):
Just drilling it right down, Yep, how important
is it to that investor to findout how many units a developer
is selling in that area.
Michael Cobb (17:41):
I think it's critically important.
Hugh, I think one of thebiggest factors that I would
always ask when a developer isselling property or selling
product condo product especiallydepends.
So let me bifurcate the worldand say lifestyle is a very
different thing.
Lifestyle has nothing to dowith numbers, right, I mean, can
(18:04):
you afford it?
That's the only number thatshould ever come into play with
a lifestyle purchase.
Right, can you afford it?
But after that it's do I likethe view out my front window?
Do I like my neighbors?
Can I walk to my favoriterestaurant?
Have I found a rotary club or achurch nearby?
How far is it to the hospital?
Right, I mean, there are awhole bunch of factors, you know
(18:27):
, that come into a lifestylepurchase that have nothing to do
with numbers whatsoever.
Right, have nothing to do withnumbers whatsoever right.
But then if you go to thenumbers side, which is an
investment purchase and I wouldsay vacation, slash investment,
because a lot of people you knowthey decide they want to own a
vacation property and they'lluse it two, three, four, six
(18:49):
weeks a year, but the rest ofthe time they want to rent it
out.
Right, and so they want thecash flow that comes from the
unused time.
And so I think there, you know,you know it largely should be a
numbers analysis.
Right, it should be a numbersanalysis.
So on the lifestyle side, thedeveloper can sell 100% of their
product because they're just,they're trying to create
neighborhoods and community thatyou know, where people can
(19:09):
enjoy themselves.
So there's no reason for adeveloper to keep any inventory
in that right.
But on the investment side,yeah, hugh, your question's
right.
On the money, right, if thereturn on investment is so great
for a buyer who's coming alongtoday to buy one, right, how
many is the developer keepingfor themselves?
(19:30):
Right, how many is thatdeveloper keeping?
Because, if they truly believethe numbers they're showing you,
right, and the numbers are goodnumbers, right, and they should
be.
And we can't really talk aboutnumbers.
So we're not going to talkabout numbers.
But but at the end of the day,if it's a number that's
compelling enough to make youwant to own it as an investment,
right, probably it's a prettycompelling number for the
(19:51):
developer too, right?
So the so the question becomesokay if this is such a great
investment, how many are youkeeping?
Right, and I think that'sreally the right question to ask
.
In our Marriott.
So we have the Marriottfranchise on the water, marriott
residences and, by the way,that I would say would be also
(20:12):
an incredible ownershipopportunity for folks looking at
Ambergus Key.
Right, it's not the kind ofinvestment that the Best Western
Studio is.
Right, the Best Western Studiois Class B kind of commercial,
not commercial residential spaceright, it's Class B.
Right, but there's a lot ofmoney in Class B residential
space right, that's what that is.
The Marriott is oceanfront.
(20:33):
It's an incredible ownershipopportunity and beautiful
residences that are oceanfront,marriott type of thing.
Right, but in that particularproject we are keeping at least
130 of the 202.
We're going to keep over 60% ofthe residences in that Marriott
(20:54):
project.
Only 70 were availableoriginally for private ownership
and about half of those arealready sold.
So we got another 35, whateversomething like that, left in
that particular uh, uh, thatparticular, uh, marriott
oceanfront residences in the inthe bayman gardens, the best
western.
Um, we, we didn't start out thisway.
We are the demand actually,hugh.
(21:15):
The demand has been incredible.
We have literally sold outevery way.
The demand actually, hugh, thedemand has been incredible.
We have literally sold outevery building before we built
it.
We have sold out every buildingbefore we built it.
This building that's going upright now is 26.
And I think we haven't sold six.
We are designing as quickly aspossible the next building,
which is our harbor building,which will have, I think, uh 30
(21:36):
in it, and as soon as that'sdesigned and we can start
selling in that, we willimmediately stop selling in
galleon because we want to keepas many as we can there.
It's probably five or six inthe out of 26.
So what's that 20?
We'll keep about 20 of those,but in the Harbor building we
want to get back to keeping atleast a third of those.
So so, each building about athird, but in our Marriott we're
(21:58):
keeping about 60 percent, alittle over 60 percent.
So it is.
It's the right question to ask,absolutely.
Hugh Gilliam (22:04):
So you know, we talked about in the last episode
.
We talk about baby boomers thatcould move to Central America
and have maybe, you know, lowercost for living.
They got a pleasant climatethere.
What about?
And then, cultural attractions?
What about access to healthcare?
Michael Cobb (22:24):
Yeah, well, you know, that's the thing.
And again, this, the perceptionversus reality.
You know, belize has prettygood medical care.
I wouldn't call it world class,I would just call it pretty
good medical care.
It's a small country under400,000 people, so you don't
really have, like the economicinfrastructure to support, you
(22:46):
know, a major hospital.
Right, they've got a couple ofhospitals, they've got some
clinics.
It's pretty good.
I mean, it's pretty goodmedical care, right?
Nicaragua, by contrast, is thesecond poorest country in the
hemisphere.
Second poorest right.
And you would think to yourself, my god, the medical care there
must be dismal.
Actually, they have world-classmedical care, right, they had
(23:08):
the 13th hospital that was jcigold accredited, joint
commission international in allof central america.
Right, think about that.
The 13th hospital from Mexicoto South America, jci Gold
Accredited.
And you would say to yourself,well, how does that make any
sense, the second poorestcountry in the hemisphere?
Well, let's just look at thepopulation 6 million people, 10%
(23:28):
of which are middle-class ormore.
It's the typical smallermiddle-class.
There's more than 10%, but 10%,you know, are kind of, you know
, well off.
And I would say that 5% ofthose people are really well off
.
I mean, nicaragua's gotbillionaire families and
centimillionaire families andmany, many, many, you know,
(23:51):
millionaires, right?
And so you've got 300,000people in the country that all
want world-class medical care.
And when you've got 300,000people that are all pretty well
off, guess what?
You have Really good medicalcare and so, right, it's this
weird, you know, kind of thing.
Panama has got the JohnsHopkins facility associated with
(24:13):
one of its hospital systems,costa Rica has the SEMA system,
and so, again, you've got reallygreat medical care in the
region, world class.
And the thing that's just sohard for people to believe is
just simply how inexpensive itis.
It's world class.
Doctors that trained in the USand Europe and Canada and speak
(24:35):
great English, right, I mean, wehad all of our medical care.
We lived in Nicaragua for 14years.
We had all of our medical care.
I mean literally, and it's soeasy.
Like there's no calling yourprimary care physician and
waiting this and doing no, no,you call up, you say I need to
come in and see you.
They say, okay, can you get intomorrow at two o'clock?
Say yes, so you go in, right,you see the doctor.
She says, and this happened tome.
(24:56):
She says, hey, I need you to godownstairs and get an x-ray,
you say no problem.
You walk down to imagingwhatever they call it there,
right?
You walk in.
You hand them your I guess thecase hand them my Amex card,
swipe it through 60 bucks.
You go in for your x-rays.
You wait I don't know 10minutes in the lobby.
They hand you this thing ofx-rays.
You take it back upstairs tothe doctor.
She puts it up there and shereads it and then you walk out
(25:21):
and maybe the doctor was 35bucks, I mean 100 bucks, 100
bucks.
You've gone and seen the doctortwice, you've had your x-rays
and I mean, and it's all done,on tuesday tomorrow, by 3 30,
you're driving home, right, Imean this and, and and so wow,
yes, you should have insurance,and we did.
We had this great expat policyfly anywhere, anywhere in the
(25:42):
world, you could get covered,you know.
You know air evac services,right, but we had a high
deductible because we would justpay out of pocket for stuff
like that.
You go see the doctors 30 bucks, 20 bucks, I mean, you know, 50
bucks, I mean it didn't matter.
And so, yeah, great, medicalcare, incredibly inexpensive,
and physicians who, because theydon't have to deal with all the
(26:03):
insurance nonsense and like6,000 pages of paperwork for
every visit.
They actually have the time tospend with you as a client, you
as a patient, and and engage you, which I found incredibly
refreshing.
Uh, uh, and not all of usdoctors feel so pressured, but
but many do.
It's like a mill you're in,you're out, boom, boom, boom.
(26:24):
I have some doctors here that,whatever it seemed to be, they
are very caring, but there, byand large, almost every doctor's
really caring because they havethe time to be so anyway, yeah,
it's incredible.
Hugh Gilliam (26:37):
It's like getting back to the practice of medicine
, the way it should be.
It goes back to care, caringfor the individual.
Not that they don't care here,but they're rushed and they have
a thousand different pieces ofpaper on each one.
Michael Cobb (26:50):
I don't blame the doctors here.
I mean they're stuck in asystem that really, you know,
crunches them right.
Hugh Gilliam (26:56):
It really does.
One more question, and I'mgoing to let you kind of give us
a little review of where we'vebeen.
But so we've talked about babyboomers and retirement, but just
say that we have a tech familythat you know.
Mom and dad, both are heavyinto technology.
They can work anywhere in theworld with as long as they have
Wi-Fi, that computer, by theirside, and they've got three
(27:18):
children.
So, moving to Central Americawith three children that need to
have an education while mom anddad work, how does that work?
How does that look in terms ofeducation?
Michael Cobb (27:32):
Yeah, well, you know, look, I took a
two-year-old daughter.
We had another little daughterwho came along.
Both of my girls were educatedin Nicaragua.
They went to a German school, aGerman-Spanish school, for a
number of years.
Then we moved them to a Nordicschool, which was
Spanish-English, when they got alittle bit older and then we
kind of finished them off withsome homeschooling and there are
(27:56):
some really great educationalinstitutions.
Costa Rica has Waldorf School,it has a Country Day School.
It's got all these countrieshave a US like an American
school or an internationalschool that's largely on the
American curriculum for forembassy people, right?
Because the embassy people aretwo, three years and they need
to keep their kids on a prettypretty US standard kind of
(28:16):
curriculum country to country asthey as they move around, right
?
So so you'll find Frenchschools, german schools, nordic
schools.
You'll find, like I said,waldorf, country Day.
You'll find Christian schools.
There are Christian schools andmany are in Spanish or English
and bilingual.
So you'll have that option aswell.
What I've found is that, if you,and then there's homeschooling
(28:39):
Look, let's be really straightup.
I mean COVID put most kids athome.
Homeschooling Look, let's bereally straight.
I mean COVID, put most kids athome I mean almost all kids or
whatever for six, eight months ayear, and so the curriculums
have become far more robust andI think parents have become far
more comfortable with theconcept of like, wow, this is
actually okay, my kids don'tneed to be in school to learn
what they're supposed to learn,and they have a choice of
(29:00):
curriculums today that theywould have never had before,
because there is no choice whenyou send your kids to school and
I mean, you can change schools,of course, but you can't really
change the curriculum, right.
And so I think this flexibilitythat we've seen in people's
lives vis-a-vis education oftheir children has come a long
way and I would say, in somevery profound and important
positive ways, taking the stepto Latin Americaica, central
(29:25):
america, uh, yeah, it, it, it'snot, it's not a big leap anymore
.
I don't know that it ever was.
I think, coming back toperception and reality, I think
a perception was this giant leap, but you know, it's more like a
little jump, you know, and and,and probably the younger you
take your kids, the better righttaking high school kids,
probably more challenging, moreso from perspective, like I
don't want to leave all myfriends, right.
(29:45):
So I think you know there'sthose kinds of considerations as
well.
But I'm a huge advocate ofraising children, you know,
outside their home culture.
And the reason is is that whenyou raise children in a culture
that's not your home, your myhome culture, right?
You spend a lot of time talkingabout cultural differences,
(30:08):
right?
You talk about culture, whereasif you're growing up in one
location in the States, yourparents are US, your kids are US
, you don't talk about culturebecause it's just what it is
right.
But the moment you start talkingabout why they do it
differently than how we do it athome, or how we do it in the US
, or how grandma and grandpa doit different, whatever, now, all
of a sudden, you've engaged achild in this awareness of
(30:31):
something called culture, whichmost people never have an
awareness of, because we're justin it, like we're just.
You know it's air, we're justbreathing it, right.
But now, all of a sudden, yougot this different air and so
you can switch from differentair, but now you know that
there's air.
Wow, hugh, what a differencethat's made in our children's
lives.
I can see it in how they reactto situations, how they think
(30:52):
about things, and I wouldactually have to say that, even
more than the language.
I mean, they're both totallyactually, they're trilingual,
they're fully bilingual English,english, spanish.
They speak german pretty wellbecause they went to the german
school when they were little,and so you know, uh, but and
that's, that's a great gift.
By the way, that's a great gift, but I actually think the far
(31:15):
bigger gift for, for for ourgirls, is, uh, this
understanding of culture and andthe fact that they are
bi-cultural, uh, that that arebicultural, that's a big one,
that's a huge one.
Hugh Gilliam (31:28):
Well, see, I think that's.
I'm glad you brought that up,because the cultural part of it
is a huge part of the education.
I mean that is, if not, I meanreading, writing and arithmetic.
I mean that's great, but you'vegot this culture and
understanding and you, youexperienced it and you carry
that with you everywhere.
And so it's a different, it's adifferent level actually.
Yeah, michael, listen, you've.
(31:49):
You've given us so muchinformation and we appreciate
you so much and it's just anhonor to have you with us today
and the fact that we've hadthree great episodes and, as I
said earlier, in the episodedescription box there's going to
be information about how tocontact you, how to get your
various handbooks that you puttogether, and also a link to
(32:13):
some of those developments youtalked about that you've done in
Belize on the second episode.
So I would encourage anyonethat's watching today to be sure
and go back to episode two,episode one.
Some of it may be a little bitoverlapping, but the totality of
it is just great informationcoming from a great guy that's
(32:35):
been there, done it 30 years.
That's a long time, it reallyis, and you don't look too old
either, to tell you the truth.
Michael Cobb (32:43):
Well, I used to have hair Anyway.
Hugh Gilliam (32:47):
Well, listen.
I look forward to seeing you inWashington DC soon.
Michael Cobb (32:51):
Yep.
Hugh Gilliam (32:52):
And we'll be there for an International Real
Estate Federation chaptermeeting, and you're a part of
that, as I am also.
And again, thanks so much forjoining today and hopefully
we'll have some other time laterto maybe talk about Panama or
some of the other countries thatwe need to be discussing.
Michael Cobb (33:12):
Thank you so much.
Thank you, I look forward to it.
Hugh Gilliam (33:15):
Thank you.
Thanks for joining in ontoday's episode of RealtyCast
Global.
Make sure to subscribe to thepodcast to be notified when new
episodes air.
Welcome to RealtyCast Global, where we
bring insights and advice fromtop professionals in the global
market.
Join us for a journey ofculture and real estate from
countries across the globe.
Welcome back, Michael.
Episode 3, Investing in CentralAmerica.
We have learned a lot ofinformation about what to do and
(00:26):
what not to do, and there's onestatement that you say and I've
thought about it over and overand over you don't know until
you know.
And I think if we could walkaway with one thing today, it's
buyer beware.
The second thing would be youdon't know until you know, and
(00:48):
there's a meaning behind that.
It goes beyond words.
It's about being educatedbefore you make that first step,
and don't just fly into thecountry and say, oh my gosh, how
wonderful it would be to have avacation home here and I could
do this, this and this, and allof a sudden you bought it, and
then the problems begin,sometimes if you don't do your
(01:09):
homework.
Sometimes if you don't do yourhomework, as we talk about
investing in overseas properties, you've put together a
wonderful document calledOverseas Investment Guide.
This is one of three that I'veseen.
You may have more and we'regoing to put that in the episode
(01:30):
description, part of ourepisode, so that you can see,
our viewers can see, how to getone of these investment books,
because I think it's importantto have this if you're thinking
about anything beyond the UnitedStates as far as investments,
(01:50):
the first question why you havewritten about perception and
reality as the primaryinvestment factor in the region,
sure, yeah, you know, in themarkets, like in Wall Street, in
(02:11):
the financial markets, there'sa term called arbitrage, and
arbitrage is basically aknowledge gap.
Michael Cobb (02:38):
Right, it's an information gap, and I remember,
in fact, they made a movieabout this.
It's an information gap, and Iremember, in fact, they made a
movie about this where they laida line in New York City, could
transact on information thatnobody else had Right, until it
got there a second later.
So they could be they.
It was an information gap, itwas arbitrage, right, and they
could make the money in the whatI call the information gap.
(02:58):
Well, central America, somecountries more than others,
right, have this incredibleperception gap.
I would say look, the Zogbycompany did a survey of 103,000
US citizens.
I mean, that is a hugestatistical sample, right?
103,000 US citizens weresurveyed, 11.6 had said that
(03:22):
they had seriously consideredowning property overseas.
So let's just call that one outof 10, 11.6, one out of 10,
right.
So one out of 10 people hasseriously considered owning
property overseas.
One out of 10 US citizens,right, but nine out of 10
haven't.
Let's be very clear, the biggernumber just never has
considered it.
And so, from a perceptionstandpoint, even a country
(03:44):
that's done a tremendous job ofpublic relations.
Costa Rica, oh my gosh.
They may have been the bestpublic hired, the best public
relations firm ever to turntheir country into this
unbelievable destination.
Right, it's just Costa Rica, oh, costa Rica.
Oh, okay, fine, I mean,whatever you love it, hate it,
(04:04):
doesn't matter, but they did atremendous job of selling their
country right?
But even so, many, many, manyAmericans would look at Costa
Rica and go oh my gosh, I wouldnever go there.
I don't want to get killed,right, or whatever.
You know right.
Mexico, oh, mexico, is reallydangerous.
Nicaragua, you got to bekidding me.
You know whatever, right?
And so you've got thisperception, even on the part of
(04:27):
people who do travel, right,it's very.
They might think, oh, I'd go toCosta Rica, but there's no way
in heck you'd get me toNicaragua, right, okay?
When in actuality, the crimestatistics in Nicaragua and
Costa Rica are almost identical.
Sometimes Nicaragua is a littlesafer, sometimes Costa Rica is
a little safer.
But you wouldn't know that fromperception right.
From perception, you'd think,oh, nicaragua, I'm going to get
(04:50):
killed if I go there.
Costa Rica can't wait, lookingforward to my vacation, whatever
.
So you have this perception gap,and what the perception gap
does is it largely in many cases, determines pricing, right.
So, for example, when we likeNicaragua and Costa Rica border
right, costa Rica is on thesouthern part of Nicaragua.
(05:12):
If you literally took a pieceof property in Costa Rica in 10
miles south of the Nicaraguanborder, right on the Pacific
Ocean, you said I want to buy ahalf acre lot on the Pacific
Ocean in Costa Rica, 10 milesfrom Nicaragua, you'd pay I
don't know three, four, $500,000for the property.
Pick the number, but that kindof number, maybe more, maybe
half a million and up, right.
(05:33):
If you literally went 10 milesinto Nicaragua and bought the
exact same property same ocean,same view, same weather, same
everything you might pay $2,250,right.
So it's half price, right, andthere's no difference except for
perception.
Perception is the difference.
Now, the nice thing aboutperception is that it changes
(05:57):
right.
Things can go up, things can godown, right, and so generally
what we've seen over you know myexperience, 30 years of working
in the region is thatperceptions of the region have
gotten better, some countriesfaster than others, some
countries slower than others,but the perception is getting
better.
And as the perception getsbetter, this arbitrage closes,
(06:20):
this perception gap closes, themoney is getting made by
somebody.
And so why this perception gapis so important, right, and why
we talk about it in theinvestor's guide is that if you
can be ahead of a change inperception for the better, right
, but sometimes changeperceptions for the worst too,
(06:42):
don't get me wrong.
I mean it can go either way.
Future is hard to predict, ofcourse, right, but generally
over a longer term 5, 10, 15years the perception in the
region has gone up and if youcan be ahead of the perception
with your purchase price and letperception catch up to it, you
made the money in the middle.
You, the investor, made themoney in the middle, and that is
(07:06):
the importance of perceptionversus reality.
And again, each country hastracked differently.
Each country's had its ups andits downs and definitely it's
not a straight line, it's abumpy line.
But overall the countries ofthe region have largely gotten
better in their perception onthe part of many North American
property buyers and vacationers,and that bodes well for the
(07:31):
people that bought when theperception was negative or not
popular.
Hugh Gilliam (07:36):
So it's kind of an ever-changing thing.
You're talking about perceptionFor the positive, as I would
say, is the right type ofadvertisements, and you see
great things happening, peoplemoving large hotels into the
(07:59):
area and you see a little bitmore stability.
That perception maybe changessome in the mind of the investor
that's moving there.
Michael Cobb (08:09):
So I think that's or the traveler, yeah.
Hugh Gilliam (08:11):
Or the traveler.
Michael Cobb (08:11):
Yeah, right.
Hugh Gilliam (08:12):
Yeah, I think that's a great thing to think
about.
I've never really thought aboutit that way.
You also produce a path ofprogress chart.
You produce that, a path ofprogress chart.
You produce that, and why wouldthat?
Be important to me or you, asan investor, a path of a path of
progress chart.
Michael Cobb (08:33):
Right, you know, and we touched on this last last
time when we're talking aboutBelize.
But this is that chart Rightand we say I mean basically
countries like Nicaragua notvery popular pacific side of
costa rica, very popular right,and so I call it the investment
return curve, right, and it is apath of progress curve, but
(08:54):
it's also a popularity curve andI think, fundamentally, you
know you've got, you've got two,two things going on.
One is you development right,path of progress, and some
progress can be internallygenerated, right.
A country either gets moneyfrom the World Bank or it has
its own tax base and it investsthat money in infrastructure
(09:15):
roads, bridges, publictransportation, whatever it is,
telecommunicationsinfrastructure, although a lot
of that tends to be privatesector, thank goodness.
A lot of that tends to beprivate sector, thank goodness.
And so you know, so you've gotinvestment in, just call it,
general infrastructure that candrive this development curve or
this path of progress curve,right, but the other piece of it
(09:35):
, when it really comes down tothe typical North American
investor, most North Americans,very few North Americans are
investing in telecommunicationsor, or, or, or, makila
manufacturing or call centers,although you know there is that
type of investment as well, butyou're in the, you're in the
real estate business, I'm in thereal estate business.
Most real estate investors arelooking for appreciation and
(09:59):
cash flow, most people lookingfor cash flow over appreciation,
right, as investors in the realestate space, and so you know.
So, while we have thisinfrastructure piece the
telecommunication, roads, water,blah, blah, blah kind of ground
up being generated not by us asinvestors, right, you've also
got this piece that has to dowith popularity, and the
(10:20):
popularity piece is, well, howmany people are traveling there,
right, I mean?
And to use the analogy of ahoneymoon couple, right, that's
really how I put these countriesor locations within a country
on the chart.
I just simply said if somebodygot married this weekend, where
are they going on theirhoneymoon next Monday?
And you know, not many going toNicaragua, and a whole bunch of
(10:44):
them go into Costa Rica andthen everything in between.
So this popularity effecttraveler, overnight visitor
really has a lot to do with twothings One, the price of
acquisition and two, the amountof cash flow that you might
expect.
Because, again, if it's popular, that means there's lots of
honeymooners and travelerscoming down.
(11:05):
They're staying in your, inyour condo or your home, they're
renting it.
However you do it vrbo or youknow whatever, or it's a branded
product, something like that.
Anyway, the overnight occupancyis what's generating cash flow
in a very popular destination.
You're going to pay more forthat.
You're going to pay more toacquire the asset.
If you buy something in a lesspopular country or a less
popular location, then you'regoing to pay less.
You're going to pay more toacquire the asset.
If you buy something in a lesspopular country or a less
(11:26):
popular location, then you'regoing to pay less.
Your acquisition costs will belower.
Your occupancy early years willdefinitely be lower, right,
your ADRs average daily ratewill be lower.
If you're a patient investor andyou say, look, I got a three,
five, seven-year timeline, Iwould rather acquire, I'm going
to use really simple numbers$100,000 versus $200,000,
(11:47):
because I can do the math in myhead, right?
So let's say you boughtsomething in Nicaragua for
$100,000 versus something inCosta Rica for $200,000, right.
Something in Nicaragua for $100versus something in Costa Rica
for $200, right.
And your occupancies were equal.
But they wouldn't be.
But let's just say youroccupancies were equal, right?
50% occupancy, you know.
$100 a night, right?
So that's what?
$365 divided by two, that's$17,000.
(12:09):
You know, in Costa Rica, let'sjust say, your average daily
rate was $200 a night.
Well, now you're at $34,000, ormaybe it's $36,000, whatever.
Anyway, but you see the pointright.
But your cost was $200 toachieve a higher cash flow.
But your ROI might actually belower because you're basing it
(12:31):
on a $200,000 acquisition cost,right.
Whereas if you're willing tospend $100,000 and take a longer
timeframe, like as it goes,your acquisition cost is
$100,000.
That's fixed.
You've spent that right.
As your occupancy goes from 50%to 60% and your ADRs go from
100% to 120% to 150%, your ROI,by the time you get to a
(12:53):
property that's worth $200,000that you only paid $100,000 for
ROI, by the time you get to aproperty that's worth 200 that
you only paid 100 for, now yourROI might be, like you know,
high, you know whatever.
I mean 15, 18, 20, 24%, righton your original cash flow, on
your original acquisition cost,right.
And so, on the other hand,maybe the cut this is why it's
an investment you win, you lose,you're an investor, risk,
(13:14):
reward, reward.
On the other hand, it flatlinesand it never becomes more
popular.
Or, you know, god forbid ittanks and it gets really
unpopular, right.
I mean that's the risk side ofthe equation, right.
But the reward side again over.
In most cases, you know 3, 5, 7, 10 years like, what's going to
happen is you're going to gethigher ADRs, higher occupancy,
(13:38):
but your fixed cost is muchlower.
But there are people who say Idon't want that risk, I'd rather
just buy something in CostaRica for $200,000, $300,000.
I'd rather have a lower ROI buta much more predictable
investment.
And so those are the twoextremes.
A country like Belize, I think,sits in the sweet spot.
(13:59):
It's climbed maybe halfway upthe popularity curve.
The acquisition prices arestill very, very reasonable.
There's a lot of room forappreciation of the asset, but
it's already popular enough tocash flow very, very well.
And as it continues to climb inpopularity, occupancy rates,
adrs should go up as well.
(14:19):
So you can kind of bookend it.
Not very popular, most risk,very popular, least risk,
something in the middle, thatkind of maybe the sweet spot
that lets you catch the rest ofthe curve up.
So anyway, that would be my whythat curve is important and how
we as investors, with differenttimelines, really would look at
(14:40):
where we would want to positionour investment, you know, along
that curve.
Hugh Gilliam (14:45):
That makes complete sense.
But let me ask you this I'm nottrying to put you on the spot,
but if you were to determinetoday which region in Central
America would be the best regionto invest in, what would that
be?
What region would that be?
Michael Cobb (15:03):
You know I am very specific.
People ask me this question alot and I answer it right now.
I've answered it for about ayear this way and I'll probably
answer it for another year totwo years.
I think there's a three-yearwindow and we're about a year
into it right now.
Belize, generally, ambergus Key, more specifically the Best
(15:25):
Western Studio Condos veryspecifically.
It's a branded product, itserves a mainstream traveler, it
serves a cruise ship kind ofcustomer right.
It's a middle-class product,it's a two, three-star product
and again, this is the idea.
A lot of times people get hungup.
Well, I don't like Best Western.
You know what?
(15:45):
I don't like Hawaiian pizza.
But if I owned a pizza parlor Iwould sell Hawaiian pizza
Because it's not about what Ilike, it's about what the person
walking through the door likes,right.
And so, you know, a lot oftimes people kind of get hung up
on this idea.
Well, I don't want to.
I would never stay in a BestWestern.
Ok, you know what, if you got,if you got one hundred fifty,
(16:12):
one hundred sixty thousanddollars to invest in a, you know
, in a, in a, in a property,you're right, you're probably
not staying in the Best Western,right?
But?
But there are a lot of peoplewho do, because it's a very
price point product, it's an,it's an, it's the only off water
, it's three blocks off thewater.
So I mean, literally, you know,five minute walk, you're at the
beach, right, but you're notpaying beachfront prices.
You're paying one hundredtwenty hundred fifty bucks a
night to stay there.
That traveler, that middle classtraveler looking for certainty
(16:35):
of product, they know whatthey're going to get, it's a
standard.
They're going to get the bestWestern right.
And so for that traveler thereis no other option on the island
of Ambergus Key.
And so again, belize generally,because it's really in the
sweet spot of the curve, spot ofthe curve, ambergis Cay,
(16:57):
because that tiny little islandoff the coast of Belize
generates 70% of all the tourismrevenue for the country of
Belize.
And then the Best WesternStudios, because it's a branded
product off the water for amiddle-class consumer and
there's no competition for thatproduct on the island today.
That to me, is bullseye,bullseye, bullseye.
Hugh Gilliam (17:17):
Just drilling it right down, Yep, how important
is it to that investor to findout how many units a developer
is selling in that area.
Michael Cobb (17:41):
I think it's critically important.
Hugh, I think one of thebiggest factors that I would
always ask when a developer isselling property or selling
product condo product especiallydepends.
So let me bifurcate the worldand say lifestyle is a very
different thing.
Lifestyle has nothing to dowith numbers, right, I mean, can
(18:04):
you afford it?
That's the only number thatshould ever come into play with
a lifestyle purchase.
Right, can you afford it?
But after that it's do I likethe view out my front window?
Do I like my neighbors?
Can I walk to my favoriterestaurant?
Have I found a rotary club or achurch nearby?
How far is it to the hospital?
Right, I mean, there are awhole bunch of factors, you know
(18:27):
, that come into a lifestylepurchase that have nothing to do
with numbers whatsoever.
Right, have nothing to do withnumbers whatsoever right.
But then if you go to thenumbers side, which is an
investment purchase and I wouldsay vacation, slash investment,
because a lot of people you knowthey decide they want to own a
vacation property and they'lluse it two, three, four, six
(18:49):
weeks a year, but the rest ofthe time they want to rent it
out.
Right, and so they want thecash flow that comes from the
unused time.
And so I think there, you know,you know it largely should be a
numbers analysis.
Right, it should be a numbersanalysis.
So on the lifestyle side, thedeveloper can sell 100% of their
product because they're just,they're trying to create
neighborhoods and community thatyou know, where people can
(19:09):
enjoy themselves.
So there's no reason for adeveloper to keep any inventory
in that right.
But on the investment side,yeah, hugh, your question's
right.
On the money, right, if thereturn on investment is so great
for a buyer who's coming alongtoday to buy one, right, how
many is the developer keepingfor themselves?
(19:30):
Right, how many is thatdeveloper keeping?
Because, if they truly believethe numbers they're showing you,
right, and the numbers are goodnumbers, right, and they should
be.
And we can't really talk aboutnumbers.
So we're not going to talkabout numbers.
But but at the end of the day,if it's a number that's
compelling enough to make youwant to own it as an investment,
right, probably it's a prettycompelling number for the
(19:51):
developer too, right?
So the so the question becomesokay if this is such a great
investment, how many are youkeeping?
Right, and I think that'sreally the right question to ask
.
In our Marriott.
So we have the Marriottfranchise on the water, marriott
residences and, by the way,that I would say would be also
(20:12):
an incredible ownershipopportunity for folks looking at
Ambergus Key.
Right, it's not the kind ofinvestment that the Best Western
Studio is.
Right, the Best Western Studiois Class B kind of commercial,
not commercial residential spaceright, it's Class B.
Right, but there's a lot ofmoney in Class B residential
space right, that's what that is.
The Marriott is oceanfront.
(20:33):
It's an incredible ownershipopportunity and beautiful
residences that are oceanfront,marriott type of thing.
Right, but in that particularproject we are keeping at least
130 of the 202.
We're going to keep over 60% ofthe residences in that Marriott
(20:54):
project.
Only 70 were availableoriginally for private ownership
and about half of those arealready sold.
So we got another 35, whateversomething like that, left in
that particular uh, uh, thatparticular, uh, marriott
oceanfront residences in the inthe bayman gardens, the best
western.
Um, we, we didn't start out thisway.
We are the demand actually,hugh.
(21:15):
The demand has been incredible.
We have literally sold outevery way.
The demand actually, hugh, thedemand has been incredible.
We have literally sold outevery building before we built
it.
We have sold out every buildingbefore we built it.
This building that's going upright now is 26.
And I think we haven't sold six.
We are designing as quickly aspossible the next building,
which is our harbor building,which will have, I think, uh 30
(21:36):
in it, and as soon as that'sdesigned and we can start
selling in that, we willimmediately stop selling in
galleon because we want to keepas many as we can there.
It's probably five or six inthe out of 26.
So what's that 20?
We'll keep about 20 of those,but in the Harbor building we
want to get back to keeping atleast a third of those.
So so, each building about athird, but in our Marriott we're
(21:58):
keeping about 60 percent, alittle over 60 percent.
So it is.
It's the right question to ask,absolutely.
Hugh Gilliam (22:04):
So you know, we talked about in the last episode
.
We talk about baby boomers thatcould move to Central America
and have maybe, you know, lowercost for living.
They got a pleasant climatethere.
What about?
And then, cultural attractions?
What about access to healthcare?
Michael Cobb (22:24):
Yeah, well, you know, that's the thing.
And again, this, the perceptionversus reality.
You know, belize has prettygood medical care.
I wouldn't call it world class,I would just call it pretty
good medical care.
It's a small country under400,000 people, so you don't
really have, like the economicinfrastructure to support, you
(22:46):
know, a major hospital.
Right, they've got a couple ofhospitals, they've got some
clinics.
It's pretty good.
I mean, it's pretty goodmedical care, right?
Nicaragua, by contrast, is thesecond poorest country in the
hemisphere.
Second poorest right.
And you would think to yourself, my god, the medical care there
must be dismal.
Actually, they have world-classmedical care, right, they had
(23:08):
the 13th hospital that was jcigold accredited, joint
commission international in allof central america.
Right, think about that.
The 13th hospital from Mexicoto South America, jci Gold
Accredited.
And you would say to yourself,well, how does that make any
sense, the second poorestcountry in the hemisphere?
Well, let's just look at thepopulation 6 million people, 10%
(23:28):
of which are middle-class ormore.
It's the typical smallermiddle-class.
There's more than 10%, but 10%,you know, are kind of, you know
, well off.
And I would say that 5% ofthose people are really well off
.
I mean, nicaragua's gotbillionaire families and
centimillionaire families andmany, many, many, you know,
(23:51):
millionaires, right?
And so you've got 300,000people in the country that all
want world-class medical care.
And when you've got 300,000people that are all pretty well
off, guess what?
You have Really good medicalcare and so, right, it's this
weird, you know, kind of thing.
Panama has got the JohnsHopkins facility associated with
(24:13):
one of its hospital systems,costa Rica has the SEMA system,
and so, again, you've got reallygreat medical care in the
region, world class.
And the thing that's just sohard for people to believe is
just simply how inexpensive itis.
It's world class.
Doctors that trained in the USand Europe and Canada and speak
(24:35):
great English, right, I mean, wehad all of our medical care.
We lived in Nicaragua for 14years.
We had all of our medical care.
I mean literally, and it's soeasy.
Like there's no calling yourprimary care physician and
waiting this and doing no, no,you call up, you say I need to
come in and see you.
They say, okay, can you get intomorrow at two o'clock?
Say yes, so you go in, right,you see the doctor.
She says, and this happened tome.
(24:56):
She says, hey, I need you to godownstairs and get an x-ray,
you say no problem.
You walk down to imagingwhatever they call it there,
right?
You walk in.
You hand them your I guess thecase hand them my Amex card,
swipe it through 60 bucks.
You go in for your x-rays.
You wait I don't know 10minutes in the lobby.
They hand you this thing ofx-rays.
You take it back upstairs tothe doctor.
She puts it up there and shereads it and then you walk out
(25:21):
and maybe the doctor was 35bucks, I mean 100 bucks, 100
bucks.
You've gone and seen the doctortwice, you've had your x-rays
and I mean, and it's all done,on tuesday tomorrow, by 3 30,
you're driving home, right, Imean this and, and and so wow,
yes, you should have insurance,and we did.
We had this great expat policyfly anywhere, anywhere in the
(25:42):
world, you could get covered,you know.
You know air evac services,right, but we had a high
deductible because we would justpay out of pocket for stuff
like that.
You go see the doctors 30 bucks, 20 bucks, I mean, you know, 50
bucks, I mean it didn't matter.
And so, yeah, great, medicalcare, incredibly inexpensive,
and physicians who, because theydon't have to deal with all the
(26:03):
insurance nonsense and like6,000 pages of paperwork for
every visit.
They actually have the time tospend with you as a client, you
as a patient, and and engage you, which I found incredibly
refreshing.
Uh, uh, and not all of usdoctors feel so pressured, but
but many do.
It's like a mill you're in,you're out, boom, boom, boom.
(26:24):
I have some doctors here that,whatever it seemed to be, they
are very caring, but there, byand large, almost every doctor's
really caring because they havethe time to be so anyway, yeah,
it's incredible.
Hugh Gilliam (26:37):
It's like getting back to the practice of medicine
, the way it should be.
It goes back to care, caringfor the individual.
Not that they don't care here,but they're rushed and they have
a thousand different pieces ofpaper on each one.
Michael Cobb (26:50):
I don't blame the doctors here.
I mean they're stuck in asystem that really, you know,
crunches them right.
Hugh Gilliam (26:56):
It really does.
One more question, and I'mgoing to let you kind of give us
a little review of where we'vebeen.
But so we've talked about babyboomers and retirement, but just
say that we have a tech familythat you know.
Mom and dad, both are heavyinto technology.
They can work anywhere in theworld with as long as they have
Wi-Fi, that computer, by theirside, and they've got three
(27:18):
children.
So, moving to Central Americawith three children that need to
have an education while mom anddad work, how does that work?
How does that look in terms ofeducation?
Michael Cobb (27:32):
Yeah, well, you know, look, I took a
two-year-old daughter.
We had another little daughterwho came along.
Both of my girls were educatedin Nicaragua.
They went to a German school, aGerman-Spanish school, for a
number of years.
Then we moved them to a Nordicschool, which was
Spanish-English, when they got alittle bit older and then we
kind of finished them off withsome homeschooling and there are
(27:56):
some really great educationalinstitutions.
Costa Rica has Waldorf School,it has a Country Day School.
It's got all these countrieshave a US like an American
school or an internationalschool that's largely on the
American curriculum for forembassy people, right?
Because the embassy people aretwo, three years and they need
to keep their kids on a prettypretty US standard kind of
(28:16):
curriculum country to country asthey as they move around, right
?
So so you'll find Frenchschools, german schools, nordic
schools.
You'll find, like I said,waldorf, country Day.
You'll find Christian schools.
There are Christian schools andmany are in Spanish or English
and bilingual.
So you'll have that option aswell.
What I've found is that, if you,and then there's homeschooling
(28:39):
Look, let's be really straightup.
I mean COVID put most kids athome.
Homeschooling Look, let's bereally straight.
I mean COVID, put most kids athome I mean almost all kids or
whatever for six, eight months ayear, and so the curriculums
have become far more robust andI think parents have become far
more comfortable with theconcept of like, wow, this is
actually okay, my kids don'tneed to be in school to learn
what they're supposed to learn,and they have a choice of
(29:00):
curriculums today that theywould have never had before,
because there is no choice whenyou send your kids to school and
I mean, you can change schools,of course, but you can't really
change the curriculum, right.
And so I think this flexibilitythat we've seen in people's
lives vis-a-vis education oftheir children has come a long
way and I would say, in somevery profound and important
positive ways, taking the stepto Latin Americaica, central
(29:25):
america, uh, yeah, it, it, it'snot, it's not a big leap anymore
.
I don't know that it ever was.
I think, coming back toperception and reality, I think
a perception was this giant leap, but you know, it's more like a
little jump, you know, and and,and probably the younger you
take your kids, the better righttaking high school kids,
probably more challenging, moreso from perspective, like I
don't want to leave all myfriends, right.
(29:45):
So I think you know there'sthose kinds of considerations as
well.
But I'm a huge advocate ofraising children, you know,
outside their home culture.
And the reason is is that whenyou raise children in a culture
that's not your home, your myhome culture, right?
You spend a lot of time talkingabout cultural differences,
(30:08):
right?
You talk about culture, whereasif you're growing up in one
location in the States, yourparents are US, your kids are US
, you don't talk about culturebecause it's just what it is
right.
But the moment you start talkingabout why they do it
differently than how we do it athome, or how we do it in the US
, or how grandma and grandpa doit different, whatever, now, all
of a sudden, you've engaged achild in this awareness of
(30:31):
something called culture, whichmost people never have an
awareness of, because we're justin it, like we're just.
You know it's air, we're justbreathing it, right.
But now, all of a sudden, yougot this different air and so
you can switch from differentair, but now you know that
there's air.
Wow, hugh, what a differencethat's made in our children's
lives.
I can see it in how they reactto situations, how they think
(30:52):
about things, and I wouldactually have to say that, even
more than the language.
I mean, they're both totallyactually, they're trilingual,
they're fully bilingual English,english, spanish.
They speak german pretty wellbecause they went to the german
school when they were little,and so you know, uh, but and
that's, that's a great gift.
By the way, that's a great gift, but I actually think the far
(31:15):
bigger gift for, for for ourgirls, is, uh, this
understanding of culture and andthe fact that they are
bi-cultural, uh, that that arebicultural, that's a big one,
that's a huge one.
Hugh Gilliam (31:28):
Well, see, I think that's.
I'm glad you brought that up,because the cultural part of it
is a huge part of the education.
I mean that is, if not, I meanreading, writing and arithmetic.
I mean that's great, but you'vegot this culture and
understanding and you, youexperienced it and you carry
that with you everywhere.
And so it's a different, it's adifferent level actually.
Yeah, michael, listen, you've.
(31:49):
You've given us so muchinformation and we appreciate
you so much and it's just anhonor to have you with us today
and the fact that we've hadthree great episodes and, as I
said earlier, in the episodedescription box there's going to
be information about how tocontact you, how to get your
various handbooks that you puttogether, and also a link to
(32:13):
some of those developments youtalked about that you've done in
Belize on the second episode.
So I would encourage anyonethat's watching today to be sure
and go back to episode two,episode one.
Some of it may be a little bitoverlapping, but the totality of
it is just great informationcoming from a great guy that's
(32:35):
been there, done it 30 years.
That's a long time, it reallyis, and you don't look too old
either, to tell you the truth.
Michael Cobb (32:43):
Well, I used to have hair Anyway.
Hugh Gilliam (32:47):
Well, listen.
I look forward to seeing you inWashington DC soon.
Michael Cobb (32:51):
Yep.
Hugh Gilliam (32:52):
And we'll be there for an International Real
Estate Federation chaptermeeting, and you're a part of
that, as I am also.
And again, thanks so much forjoining today and hopefully
we'll have some other time laterto maybe talk about Panama or
some of the other countries thatwe need to be discussing.
Michael Cobb (33:12):
Thank you so much.
Thank you, I look forward to it.
Hugh Gilliam (33:15):
Thank you.
Thanks for joining in ontoday's episode of RealtyCast
Global.
Make sure to subscribe to thepodcast to be notified when new
episodes air.
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