Property Confiscation and other paranoid concerns

[Escapee5150]

The Things that worry me the most about purchasing is:

1. The drug deal cash transaction. The fear of losing all your money at once.

2. The government confiscation of foriegner's apartments, which I am not that worried about, but maybe that is naive. The fear of losing all your money at once.

3. What if they decide to take down my building, and only want to pay me half of what I paid?

4. The possibility of them building a building next to me that blocks out my sun. Maybe tearing down the old building a building a giant one. Cutting my value in half.

5. The neighborhood changing. Like all the good restaurants closing because their leases were too high. Or a bunch of different type of people moving in. Like fat mamby pamby European or American tourist types. I prefer Argentines by far. They are more fun, more sexy, more honest, more real, thinner, cooler, and oh yeah, more sexy.

6. My tastes changing. Maybe I decide I want to live in a more natural environment and not base my happiness on the excitement of living in the city with all the parties, restaurants, and other people. And then I end up wanting to sell in a down market.

7. The Federal Reserve raising interest rates too much and the worldwide housing boom imploding. Thus, cutting the value of my property 30% , and leaving me stuck with it forever, and only being able to rent it out for a small amount.

8. Possibly discovering something, maybe out your neighborhood, that you did not know before that is negative.

9. Zoning Changes that again rob your sun.

10. Technology changes that make it way cheaper to print a much better building.

11. Other people's perception of your neighborhood changing, where they deem it to be no longer desirable.

All of those are the biggest gotchas that I can think of. And yes, they are all very paranoid. But it is good to think of everything before you buy.

Think of all these things first.

And then when it is time to buy, turn your mind off and let your feelings rule the day. You have got millions of years of evolution telling you what to do. Those hairs on the back of your neck better not be standing up.

Also, consider how this plays into your lifestyle and financial stuctures. Is it going to be more of a drag than it is a benefit. Or too much of a time suck.

As one guy put it. Don't buy to make money. Buy because you like the lifestyle.

My experiences in looking for apartments keep giving me new information. I keep discovering better values the longer I look, even though prices have risen. It is very difficult to even know exactly what you want. I am generally a location location location person. But here, almost all locations are not that bad. Or good.

Good luck to all.

[StrayLight]

The Things that worry me the most about purchasing is:

1. The drug deal cash transaction. The fear of losing all your money at once. Well, in my case, it was in a bank. I had a realtor I trusted through and through (the sister of an Argentinian collegue at work) It was a little spooky, but at some point you need to trust something or someone.


2. The government confiscation of foriegner's apartments, which I am not that worried about, but maybe that is naive. The fear of losing all your money at once. I did a fair amount of research into this before I bought, although that's been well over a year now. First, Argentina has no significant history of confiscating property from foreigners. Second, the applicable Argentine laws apparently say that failure to pay property taxes are the only grounds for seizing property anyway. Third, if you knew the Argentine testate and inheritance laws, you'd know that property ownership is a big fucking deal, and that the government is probably not going to risk a popular uprising by starting to seize property. Finally, there is some U. S. Law or something that precludes certain kinds of foreign aid to countries that do not respect private property rights. I don't remember all the details now, but it's basically in Argentina's best interest not to be fucking with foreign citizens' property.

[Escapee5150]

First, Argentina has no significant history of confiscating property from foreigners. People say things on this board that contradict that, and they say it like they know, but don't give any details. When I ask around, I hear, in general, no they have not confiscated property. I. E. Real property. Which is what I am told, but also by real estate types. But I do think that is actually in general acurate, but only in BsAs. Out in the country, it is probably more like a lottery. Very easy to erase a line in a computer. Or heck, paper, probably out there. I'd like to get my citizenship, then be Mayor somewhere, and steal property too. That would be cool.

I do know of a guy that had some kind of mortgage business and they took the whole thing, and bankrupted him. This was a friend's uncle. But this was back like in the 70's. Maybe during the military dictatorship.

Heck, those dictator guys even tried to take the Faukland Islands. What idiots. I think I heard Jackson say something like the Fauklands were a British colony before Argentina existed. I would not be surprised. How ridiculous. That helped cause the downfall of their dictatorship (my understanding) in 1983.

On a side note, an AR musician friend told me that you could not even have long hair until like 1983, after the dictatorship. Which explains all the long hair, beatlesc, hippie, guitar, rebellion style you see here. God, I love that.

Sorry. Apartments. Apartments. I'm going to get in trouble. Shhhhh The board police and all. Hi Jackson:)

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Hi Escapee5150,

Yes, I'm going to move this to a new thread titled "Property Confiscation and other paranoid concerns"

Thanks,

Jackson

Thanks,

[Escapee5150]

Well, in my case, it was in a bank. I had a realtor I trusted through and through (the sister of an Argentinian collegue at work) It was a little spooky, but at some point you need to trust something or someone.I trust Suzanna at Reynolds Propiedades. A german AR chick. She is cool. I like her, and I trust her and Reynolds Properties.

[Escapee5150]

I also met MCSE tonight. By his posts I really was not expecting too much, but I think that is a language translation / style (and yes math) problem. But after meeting him, he was awesome. A very nice guy, very smart, hard working type, and very very knowledgeable out AR. That is the key right there. He knows this place much better than others that I have met.

I think he is about as likely to find you a good deal as anyone. Probably much better than Saint on the buy side. Saint excels on the sell side, which is where the money is. But in real estate, you make your money when you buy. Plus, I never do what people tell me to. I would have died a long time ago doing that.

I also checked out his apartment in Las Canitas. It was nice. Not my particular style though. I like warmer more focked up stuff, like the old style rickety elevators, or my 100 year old, cool, POS house in Dallas. But if you like cleaner, more modern styling, then it might be cool. The area though was awesome. It is the best area to live in that I have seen in terms of coolness without touristiness. The location was a winner, but it depends on what you want.

[StrayLight]

People say things on this board that contradict that, and they say it like they know, but don't give any details. When I ask around, I hear, in general, no they have not confiscated property. All I can say to that is that I spent a long time with some real estate lawyers grilling them about constitutional property rights and related stuff, and I came away satisfied.

Another point to keep in mind is this (which I do not take credit for coming up with): Argentina is another country, it is not another planet.

SL

[Escapee5150]

All I can say to that is that I spent a long time with some real estate lawyers grilling them about constitutional property rights and related stuff, and I came away satisfied.

SLThanks for your due diligence and sharing your grilling of lawyers with us. Since the US Constitution has not meant anything since the 1930's, the rule of law means nothing to me, or anyone else. Oh except lawyers but only while they billing hours. They use the violent force of law to scare you into giving them money for the most part.

I don't go on logic. I go completely by feel. I am simply not smart enough to read all that stuff and don't believe what any government agency or lawyer or CPA tells me.

My feeling is that you are completely safe about owning property. Argentina is not like Venezuela, where it is my understanding that Chavez just took it all the foreigner's property in the last year or two.

I think your property rights are safe, but only in the city. Owning land in a province would be totally different.

I am basing my decision completely on feel. These people have class and style and elegance. I love them.




Another point to keep in mind is this (which I do not take credit for coming up with): Argentina is another country, it is not another planet.

SLYes that is correct. The USA is the alternative universe. Our men have been duped into thinking life in the USA is normal. Chump city.

[Hunt99]

Argentina is not like Venezuela, where it is my understanding that Chavez just took it all the foreigner's property in the last year or two. The difference is that Venezuela begins with a "V" and Argentina begins with an "A".

[Moore]

Does anyone have any historical evidence of Argentina confiscating real property?

[Dickhead]

In 1889, the Torrealba regime nationalized all the property of the Swiss and Dutch immigrants who lived in northern Chubut, near the border with Rio Negro province, near the present day El Bolson. They made a show of having the property appraised, but the appraisers were all cohorts, and in many cases relatives, of Alejandro Torrealba. Most modern day historians figure the compensation at 15-20 cents on the dollar. These immigrants, who were largely engaged in dairying and cheese manufacture on a subsistence level, returned to Europe but continued to seek additional compensation through local attorneys sympathetic to the cause. Finally, in 1897, a high court packed with judges appointed by the rival successor regime of Reynaldo Espinosa, granted the petitioners additional compensation on the order of 50% of the initial compensation. However, inflation in the interim had been something like 250% , rendering the additional compensation almost moot.

[Hunt99]

Does anyone have any historical evidence of Argentina confiscating real property?Why does it have to be real property in order for it to be confiscation? The government's taking away of my business would hurt me much more than their taking away my home. There is plenty of current expropriation going on in South America, of both real and intangible property. The trend is sharply increasing, and this activity does include Argentina.

Will Kirchner or his successor target foreigners' condos for expropriation? Not as an initial step.

[Moore]

Why does it have to be real property in order for it to be confiscation? The government's taking away of my business would hurt me much more than their taking away my home. Because real property, more specifically residential property, seems to have a sacred, special status here. I'm sure that anyone could list 100 examples of very different laws and practices in the business sector of Argentina versus that of USA.

Still waiting for a real property confiscation example in the last two centuries.

[Dickhead]

In 1928 Hipolito Yrigoyen got re-elected even though he was already in his 80s and senile. His second wife, Romina, convinced him to expropriate the farmlands adjacent to those of her family in La Rioja province. In this case there was NO compensation. Romina's younger brother was subsequently murdered under mysterious circumstances. Many historians inferred that the neighboring family was responsible.

[Rock Harders]

Mongers-

If you were to take a closer look at the property confiscation in Venezuela, or the proposed similar property confiscation in Bolivia, all the lands in question are vast pieces of what those governments decided were "underutilized" potential agricultural lands. I have never heard any mention of confiscated buildings in either Caracas or Santa Cruz de La Sierra. The reason that the governments of Venezuela and Bolivia want to seize these large land tracts is because a system similar to Medieval feudalism exists in which absentee landlordism is prevelant and the Venezuelan / Bolivian peasants do not own the land they till.

If I was Ted Turner and I owned half of Patagonia, I might be concerned that someday the Argentine government might seize my land to be put to better use as either a national park or as agricultural land. IMO, I think the Argentine government should seize 99% of his land and turn it into a giant national park / wildlife refuge.

The point here is that it is pretty absurd to think that the Argentine government is going to confiscate your 2 bedroom apartment in Recoleta as part of some xenophobic nationalist restructuring. There is simply no incentive for the Argentine governement to do this. Nevertheless, I do not think buying an apartment / house here is a great investment, you could make greater returns with more liquidity elsewhere. On the other hand, having a nice apartment in a nice area of this city will always have an intrinsic value no matter how bad the economic situation gets. If somehow Argentina straightens itself out (not likely) your apartment value will soar and if it sinks as it habitually does, you will still have the cheap steak, cheap pussy and cheap / relaxing lifestyle.

Suerte,

Dirk Diggler

[AllIWantIsLove]

Still waiting for a real property confiscation example in the last two centuries.I know you understand this stuff better than I do, so can you please explain why what Castro did in Cuba is not confiscation of real property? And how about what just happened in Venezuela? I don't know if it's technically confiscation but it seems to me that it amounts to the same thing.

Thanks, Bob

[AllIWantIsLove]

Dirk,

As usual you make a lot of sense. But were Argentina to confiscate Ted's property in Patagonia, wouldn't that lower ALL real estate values? Wouldn't there suddenly be many, many fewer foreign buyers in the marked?

Bob

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Hi AllIWantisLove,

Thanks for breathing a bit of sanity into this discussion.

The answer to your question is YES! Of course! If the government of any country starts confiscating foreign-owned property in their country, the value of all real estate in the country would plummet. This would be especially true here in Argentina where foreigners are the ones propping up the real estate market by buying property. Saint's purchases alone have probably added 10% to all the property values in Capital Federal.

Okay, I was just kidding about that last observation, although that wouldn't stop Saint from proclaiming that he alone is responsible for adding a billion dollars of value to the Argentine economy.

Anyway, the people that would be hardest hit in any government confiscation scheme would be local owners, who still own 90% of the country's property. BTW, "local owners" I am sure includes every major political player in Argentina.

Think of it like this: Any time some back-woods Argentine politician starts spouting of slogans like "Argentine lands for Argentinos", his campaign contributors and his constituents quickly pull him aside and tell him the equivalent of "Shut the fuck up you idiot. I've got my property for sale and the only buyers with money are the foreigners."

Thanks,

Jackson

[Rock Harders]

AllIWantIsLove-

I think that it would depend on the exact circumstances of the nature of the confiscation of Ted Turner's land. For example, if the Argentine government declared that they would be distributing the land to peasants and landless villa miseria dwellers, to be followed by more land re-distribution, real estate values may take a big hit in some regions / markets. However, if the Argentine government announced that they were turning the entirety of Turner's land into a Patagonian national park / wildlife refuge for the sake of the environment, I doubt that prices of apartments in Recoleta would budge one bit.

Suerte,

Dirk Diggler

[Hunt99]

The point here is that it is pretty absurd to think that the Argentine government is going to confiscate your 2 bedroom apartment in Recoleta as part of some xenophobic nationalist restructuring. There is simply no incentive for the Argentine governement to do this. You're right, Dirk. Such a thing could never happen.

For example, I enjoy jetting down and spending weekends in my two-bedroom apartment in Havana. It has a great view of the ocean. The government down there has no incentive to take it away from me. There have been some rumors that the government was going to start expropriating the underutilized sugar cane plantations which are in a neo-fedual state, and then move on to the cigar factories, but I bet those are also nothing more than lies spread by the Bush Administration.

But even if the Cuban government did take those assets away from the multinationals that abuse the workers and peasants, there's no way they'd touch my apartment, since I never exploited anybody. More importantly, property rights are sacred and enshrined in the Cuban Constitution. In five hundred years of history, there has never been any land expropriation in all of Cuba.

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Hi Hunt99,

With all due respect, there's a world of difference between modern day Argentina and modern day Cuba, a difference so great that I think it defies comparison.

Thanks,

Jackson

[El Aleman]

Folks, get down to a bit of realism.

Everything can happen, and property confiscations happened in many places of the world. They happened in the early 50's in the eastern part of my country, like in many countries that turned communist in the aftermath of WW2. It happened in Cuba. And in many countries, it has been reversed, and most property given back to their owners, for example in East Germany.

And it can happen in Argentina, Spain, Germany, and the U. S. Of A.

The question is, how likely is it. At this time, I don't see the threat of a hardcore communist revolution anywhere on the world. This idea seems to have found it's place in the "errors of history" dumpster. The superpower without which Castro could never have got into power ceased to exist. And anything short of a real revolution will not change the structures of a society so much that Jackson's remark does not hold anymore.

With every investment, you have to assess your risks and benefits. When buying stock in any company, you basically bet your money on the expectation that the company's management does not fuck up big time within the next half year (and that happened more often than property confiscations) and that there still is a market for the co's products in a few years. I, and that is my personal opinion, consider the risk of property getting confiscated in Argentina low enough to be neglected.

Just my 2 unconfiscated cents,

El Alemán

[Dickhead]

Also I outrightly fabricated all that shit I wrote two nights ago and I've just been waiting for someone to call me on it. Sounded pretty good though, huh?

[Saint]

I don't post anymore to the ISG boards but a few of my friends that read this section told me about this thread so I thought I'd share my comments.

I really got a good laugh from Jackson's post! Ha, ha. Funny guy. No not billions but tens of millions of dollars. Yes. I'm not sure how much my buying has raised property values but let's just say it's a fact that I was one of the largest buyers of residential real estate the past two years and I don't see any slowdown in sight now that I'm working for hedge funds and investment funds buying tens of millions of dollars of property.

For those of you paranoid, just don't purchase here. It's that simple. From my experience, the people doing the most complaining probably couldn't buy a nice property here anyway as it's all cash.

I'm not posting to sell anything. I'm only posting facts. El Aleman makes excellent points. There is risk in ANY investment. For those of you that think there is no risk in the USA, you are sadly mistaken. ALL investments have a risk. The way I look at it, I would rather own an apartment in Recoleta instead of 300 shares of Google.

The La Nacion had an article on May 13, 2006 that told of how properties in good areas of the city have gone up 30% in value in the past year. I doubt that those that purchased are too worried about the same things you are worried about. The properties I purchased have increased tremendously in value and have provided an unbelievable amount of cash flow via rentals. I've received unsolicited offers on several of the properties I own. Some for as much as 70% more than I paid for it just less than 2 years ago. I'm not buying to flip and make a quick profit (although I have sold one that I got a great offer on and was too good to pass up and I will still manage it and make profits with no risk)

The point is this. If you can't stomache the risk then don't buy here. Life is full of risks. Investing in South America is not for everyone.

One thing is for certain and undeniable. I've been 100% spot on target on Argentina on 1) real estate; 2) tourism and 3) the exchange rate the past several years. Go back and read the posts and I think you will see that is the truth.

Good luck all.

P.S. Oh yeah...there are a lot of folks a lot smarter than random guys on WSG that post that are investing in Argentina. These include some of the biggest financial brains and most successful people and companies in the world. That in itself doesn't mean anything but I only post it to remind you all that it's not just random mom and pop types buying here. Remember, purchases here for foreigners here are ALL 100% cash so these aren't pikers.....

[Dickhead]

Saint is without a doubt the most intelligent, perspicacious, handsome, virile individual on the face of the earth. Just an unbelievable, tremendous, all-around individual. Hell of a shortstop too.

[Saint]

Thanks for the compliments Dickhead.:P.

Hey, like me or hate me. My posts on many, many message boards over the past several years have been beneficial and accurate.

[El Perro]

Saint is without a doubt the most intelligent, perspicacious, handsome, virile individual on the face of the earth. Just an unbelievable, tremendous, all-around individual. Hell of a shortstop too.I didn't know he was Venezuelean.

[Moore]

BsAs has the most psychologists per capita in the world. I'd include that fact in my sales pitch to foreign clients if I were a local real estate tycoon. Personally vouching for their expertise would be even more convincing during a 10 million dollar negotiation (hedge fund and REIT clients excluded).

Diagnosis:
Pathological narcissism is a pattern of thinking and behaving in adolescence and adulthood, which involves infatuation and obsession with one's self to the exclusion of others. It manifests in the chronic pursuit of attention, in social dominance and personal ambition, bragging, insensitivity to others, lack of empathy and/or excessive dependence on others to meet his/her responsibilities in daily living and thinking. Pathological narcissism is at the core of the narcissistic personality disorder.

Narcissistic personality disorder (NPD) is a form of pathological narcissism characterized by an all-pervasive pattern of grandiosity (in fantasy or behavior), the need for excessive admiration or adulation.

Narcissistic adults are widely thought to be the result of bitter disappointment, of radical disillusionment in the significant others in their infancy.

Please seek professional help immediately.

[Gandolf50]

The superpower without which Castro could never have got into power ceased to exist.

El AlemánI seem to remember the good old USA putting Castro into power (along with the two dictators before him!) Did the US cease to exist?

[El Aleman]

I think you know which one I mean. Should my historical knowledge leave room for improvement I kindly ask to excuse the fact and blame it to the circumstance that I got my education in a different part of the world as you.

El Alemán

[Gandolf50]

I think you know which one I mean. Should my historical knowledge leave room for improvement I kindly ask to excuse the fact and blame it to the circumstance that I got my education in a different part of the world as you.

El AlemánNo problem, most Americans don't realise we put Castro into power!

[DrakeCapital]

I don't post anymore to the ISG boards but a few of my friends that read this section told me about this thread so I thought I'd share my comments.

I really got a good laugh from Jackson's post! Ha, ha. Funny guy. No not billions but tens of millions of dollars. Yes. I'm not sure how much my buying has raised property values but let's just say it's a fact that I was one of the largest buyers of residential real estate the past two years and I don't see any slowdown in sight now that I'm working for hedge funds and investment funds buying tens of millions of dollars of property.

For those of you paranoid, just don't purchase here. It's that simple. From my experience, the people doing the most complaining probably couldn't buy a nice property here anyway as it's all cash.

I'm not posting to sell anything. I'm only posting facts. El Aleman makes excellent points. There is risk in ANY investment. For those of you that think there is no risk in the USA, you are sadly mistaken. ALL investments have a risk. The way I look at it, I would rather own an apartment in Recoleta instead of 300 shares of Google.

The La Nacion had an article on May 13, 2006 that told of how properties in good areas of the city have gone up 30% in value in the past year. I doubt that those that purchased are too worried about the same things you are worried about. The properties I purchased have increased tremendously in value and have provided an unbelievable amount of cash flow via rentals. I've received unsolicited offers on several of the properties I own. Some for as much as 70% more than I paid for it just less than 2 years ago. I'm not buying to flip and make a quick profit (although I have sold one that I got a great offer on and was too good to pass up and I will still manage it and make profits with no risk)

The point is this. If you can't stomache the risk then don't buy here. Life is full of risks. Investing in South America is not for everyone.

One thing is for certain and undeniable. I've been 100% spot on target on Argentina on 1) real estate; 2) tourism and 3) the exchange rate the past several years. Go back and read the posts and I think you will see that is the truth.

Good luck all.

P. S. Oh yeah. There are a lot of folks a lot smarter than random guys on WSG that post that are investing in Argentina. These include some of the biggest financial brains and most successful people and companies in the world. That in itself doesn't mean anything but I only post it to remind you all that it's not just random mom and pop types buying here. Remember, purchases here for foreigners here are ALL 100% cash so these aren't pikers.How'd that work out for ya?

[Exon123]

DrakeCapital.

Your comment below regarding Saint's real estate wisdom is priceless.

Exon

[QuakHunter]

Then this is the correct forum. Read this post from today's BA Herald. Poor Bastard.


PENSION PROMISES BROKEN.

I am a former beneficiary of one of the AFJPs (private pension funds) that the government closed with the flourish of a pen and the acquiescence of Congress a little over a month ago, pocketing my retirement savings and those of millions of other Argentines with the promise that we will "earn more under the state system."

Earlier this month, the government announced that pensioners would receive a one-off 200-peso special bonus "before Christmas," which was paid December 18. And then it was announced on radio and TV that December salaries and aguinaldos (year-end bonuses) would be paid by December 23. When on that day I went to the bank in Barracas where I had always collected my aguinaldo year-end bonus and December benefit before Christmas under the private system, I was told that there was no money for me. I was told to go to the ANSeS office at Paseo Colón and Calle México for information on the matter. There, after spending more than hour in a queue, I was told to return on January 5 to find out when I will be paid my December aguinaldo and salary.

So it was that I had to spend Christmas having to pinch every centavo, and will have to do the same for New Year. (I earn a minimum pension because when I was a state railway worker, the government paid most of my salary off the books and the pension was calculated on what was left. The basic salary)

This is shoddy treatment for citizens who worked all their lives, made their pension contributions and deserve more consideration. It is an example of the classic "come back tomorrow" meted out by public "servants" to taxpayers in most government offices. And the prospect of having to endure it for the rest of one's life is doubtless one of the reasons that nine million Argentines who are still working chose to remain within the private system when they were given the chance to opt between public and private management of their pensions last year. Is such treatment perhaps a "vengeance" for having preferred a private pension fund?

Jorge Bernabé Bordón

[Hunt99]

Sounds like America, circa 2016.

[QuakHunter]

Sounds like America, circa 2016.You've been hurt, haven't you?