Ocean Views at Guaciomos

We are currently negotiating the final details of the contract for this property. I assume we will successfully secure this under contract, but it depends on whether they provide us with the necessary time needed to sort out the due diligence.

This particular property is located in Guaciomos (often confused with Guacimo) and sits between Escobal and Atenas.

Situated on a mountainside, it spans hundreds of meters in elevation from top to bottom. Covering 35 hectares (86 acres), the property has panoramic views from every vantage point, with most areas offering ocean views on clear days.

At slightly over $5 ½ per square meter, the price would be ideal. However, 15 of the 35 hectares fall within a restricted area.

Among all the properties we're considering, this one involves the most complex due diligence process. There are several reasons contributing to its complexity, with the primary ones being:

#1 Unregistered spring on the property

Springs pose significant challenges for properties in Costa Rica. They require protection with a 100-meter buffer forming a circle around the spring. I've witnessed properties with amazing potential lose their value due to poorly positioned springs.

We believe this spring's location won't significantly affect the property. It seems to be situated where nearly half of the restrictions will apply to the neighboring property. There's also hope that a considerable portion will fall within the restricted area.

#2 Challenging topography

The number of quality lots we can create will be the largest influence on our decision to purchase the property. Our plan involves dividing the land into 1500-2500 sq m lots (.37-.62 acre) to create between 50-90 lots. Properly laying out the entire property before proceeding will demand additional time and expenses.

#3 Restricted area

Costa Rica, like many places, presents opportunities and risks due to undefined areas within regulatory frameworks. Similar ambiguities exist more frequently than people realize, even in the United States, but they are prevalent throughout Costa Rica.

We're considering the condo approval process for this property, a path that involves taking charge of all infrastructure while allowing for smaller lots than the current zoning permits. To comply, we'll need to allocate a specific amount of open space accessible to all residents.

The ability to use the restricted area as a common space will increase the value of this property. I will be able to create additional lots and will cut in walking trails as my common space. While I anticipate no issues, certainty only comes through addressing this in the approval process. Comparatively, obtaining condo approval is akin to securing a development agreement in the States—there's latitude on both sides.

Unfortunately, clarity won’t come until 18 months & 200k later, making it impossible to know before purchasing the property. I’ll need to be able to proceed, accepting the worst-case scenario. 

Let’s dive into what this project could potentially look like financially.

For simplicity, I'm basing these numbers on 20 hectares.

Among the properties we're considering, this development would offer the most upscale home and finished lots, primarily targeting foreign buyers.

My goal is to build higher quality homes to boost the value of the whole development. When constructing an entire community as opposed to individual homes, the collective value of the community becomes crucial. Maintaining a high standard throughout allows for increased sales prices.

I intend to invest slightly more in the homes here. This strategy could potentially result in homes selling for around $600,000, based on the same budget outlined earlier.

My ultimate objective with these is to establish a community that offers a remarkably high standard of living at an affordable price.

I've selected this area for its favorable climate, proximity to excellent beaches, the international airport, and downtown.