Here is my story:
I was a corporate executive and Partner in a successful company in the USA. I made the big bucks, lived in the big house, drove the BMW, etc. One day I asked myself, "what would I honestly do if a doctor told me that I only had 3 years to live"? I mean what would I seriously do. How would I change my life?
The answer was I would travel and see the world. I made a list of all the places in the world I always wanted to visit but never did because I was too busy working. I made a list of cities/countries all over the world. I followed through on my plan. I acted as if I only had 3 years to live. Of course I still had to work so this "what if" scenario did have some limits. Basically I told my Partners that I wanted a lot of vacation time or I would quit. Fortunately, I was a rainmaker so they gave in and I got the vacation. This all started in 2001.
Argentina was the first place on my list. I fell in love with Buenos Aires as soon as I arrived. I bought an airline ticket on Hotwire.com so I couldn't extend the trip by paying an extra extention fee. I was down in Argentina for 10 days initially. Hotwire doesn't allow you to change the ticket at all. I was having such a great time that I ended up buying a new round-trip ticket (from Argentina back to the USA) to extend and stay a few more days. It was expensive at around $900 but it was worth it. After all, if I only had 3 years to live -- what's another $900?
There was something about Buenos Aires that I really loved. I couldn't describe it to friends in just words. I loved a lot of different things about the city. The fashion, the sense of style, the architecture, the food, and the the beautiful women. The city is extremely safe, contrary to the warnings I got before the trip.
I felt like coming back to the USA, quitting my job, selling my house and cars and moving to Argentina. The only problem was that I wasn't anywhere near retirement and I couldn't speak Spanish. Two big obstacles if you want to move to a foreign country like Argentina.
I gave up the dream of moving to Argentina but I kept traveling around the world. I would travel to Switzerland come home to work for a few weeks. Travel to Peru. Come back and work a few weeks. Travel to the French Riviera and come back home to work. Travel to Cuba and follow the pattern for almost 3 years. I hit almost every country in South America. Traveled around Cuba, Mexico and almost all of Europe. Still, Buenos Aires was always in my heart. I came to Buenos Aires almost every month. I was staying in expensive hotels and I was spending a fortune.
I started to try apartment rentals and I had a horrible experience or got cheated almost every time with the local companies. One time I sat in an old chair and it fell apart. I hit my head on the wall. The rental company had the nerve to charge me u$s 200 of my deposit. I told them in any other country not only would I get my deposit back but they probably would have gotten sued! Other times they did not meet me at the check-in or check-out. Still other times there was a bait and switch and the apartment I booked was not the one I was checking in to.
There wasn't much I could do. I noticed that the locals have no concept of repeat business. They try to extract as much as they can out of you with the first transaction and don't care if they ever see you again. It went against everything that I learned and followed in my professional business career. In the USA, we build up relationships and hope to have a mutually beneficial relationship with our clients for many, many years. Here in Argentina, they try to make the most they can just one time. Never forget that Argentina is ranked as one of the most corrupt countries in the world (See Transparency International's corruption Index here) Only worse are countries like the Congo, Ethiopia, Zimbabwe, Niger, Sudan, Iraq, Haiti and Chad. Argentina consistently ranks year after year as one of the most corrupt countries in the world. Look at the most recent survey. Argentina ranks worse than Algeria! Pretty shady company, huh??
I kept returning to Argentina. Not wanting to stay in an expensive hotel everytime and not wanting to deal with the hassles of a short-term rental, I decided it was cheaper and easier to just lease an apartment for a few years. I went out and found a posh luxury apartment. The problem here is that you can't pay month to month for the most part without a "guarantor" that will basically put up their property in case you stop paying.
Good luck finding that. I had to prepay a 2 year lease with cash. Plus security deposit. I'm talking about an estimated u$s 25,000 up front! Before signing the lease, I asked the owner if I could sublet the apartment when I wasn't there to use it. He was hesitant at first but finally let me once I told him that I wouldn't sign the contract without that clause. It was hard for him to say no with $25,000 in CASH sitting on the table. We wrote in the subletting clause in the contract. I never thought about making money or a business out of it. I just wanted to cover my expenses of the u$s 1,000 per month I was paying. I reasoned maybe I could rent it out to friends that came down.
Leasing that one apartment would be a decision that changed my life forever. I started a website – www.apartmentsba.com --I was amazed with what I found out. People were really looking for a luxury apartment that was larger than a hotel room and more comfortable with more privacy. I not only was covering my monthly rent but I was making money. I was amazed at what I discovered. I furnished it very well, got a US style expensive mattress and it was in a luxurious building. I charged about $150+ a night and it was still about $200+/night cheaper than the Four Seasons or the Alvear Palace. I quickly went out and subletted 3 more apartments. All in a nice section of Recoleta.
My apartments stayed full year-round and I built up a reputation of nice apartments, honest service and not cheating people. I answered emails very quickly and offered a high level of customer service. I never seriously thought about moving down here. Still, I put together a business plan for a few years and told myself maybe someday years down the road, I would quit my job and move to Argentina.
In my extensive travels around the world, I mostly stayed in 5 star hotels. After all, if a doctor told you that you have 3 years to live, wouldn't you want to stay in the best places? Not just because of that reason. Think about it. What is the reason people spend up to $300+ per night for a room at the Four Seasons or other fancy hotels? Because it's a known entity. People know they can count on good quality service, a nice mattress, clean sheets, hot water, AC and a really good experience. When they are flying halfway across the world, they don't want to have to deal with a problem. That kind of peace of mind is worth something. I told myself in the back of my mind if I could create something like that I would have a real business. I knew my competition would not be other cheap apartments for backpackers or budget travelers. I decided to go after the market that usually stays in the Alvear Palace or Four Seasons. My competition are the 4 and 5 star hotels.
Basically, after about 50+ international trips in 3 years, and I don't want to mention how much of my savings I spent though traveling --my “doctor told me I have 3 years to live” scenario played out. 3 years had passed and I traveled the globe. Buenos Aires was still in my heart and in my mind.
One day I decided to quit my job where I was making a good income, had a lot of vacation, sold my house, sold my car and decided to move to Argentina. I made 3 life changing decisions at one time. Any of these decisions alone is a major event but I (1) quit my job where I spent almost the past decade; (2) sold my house, cars and all my personal possessions and (3) moved to a foreign country. Needless to say I was a little nervous.
I knew that I had a solid business plan that could make money. I moved to Argentina and I started looking for properties to purchase. I had already researched the laws here. I knew that I had a business model that would work if I implemented it properly. I built up a network and paid for surveys from foreigners that purchased here. In the research phase while I was putting together my business plan, I put an ad in the English speaking newspaper here and offered to pay foreigners that purchased property hear to tell me about their experiences buying here. A scary thing -- Almost all of them made mistakes or were cheated, lied to or worse. I paid about $200 per survey and I did dozens and dozens. I was spending several thousands of dollars but I knew that it would be worth it if I didn’t get cheated. Something interesting was that even though most of the foreigners were cheated or lied to, they did not regret their purchase and they loved Argentina. That told me volumes.
I have been posting publicly on various investment message boards since 2002. So far, I have been dead on target on (1) tourism, (2) real estate and (3) the exchange rate. I continue to see real estate and especially apartments rentals to be a viable business. I see real estate rates here exploding in the next several years. There is increased local and foreign interest in real estate here. Also, keep in mind the locals do not trust the banks so the one stable investment for them is real estate. All the wealthy people I know here in Argentina have one thing in common. They ALL own multiple properties and they all are renting them out.
I also accurately forecasted that the USA real estate market would drastically fall and was overvalued. I told anyone that would listen in 2004/2005/2006/2007 to sell their USA real estate and buy real estate in Argentina. I gave exact reasons why the real estate values would fall in the USA and the reasons why it would rise in Argentina (which it did).
I knew it was time to sell when I saw my cleaning lady in the USA, who could barely speak English and recently came from Mexico, buying a $350,000 house with no money down and no documentation and knew that the market was going to collapse, which it did. I also forecasted that the US dollar would weaken against the Euro which it has done. I advised my investment clients to start selling off their stock market portfolios in late 2007 before it crashed and also to heavily short sell financial companies, banks, bond insurers and insurance companies in late 2007 throughout all of 2008. That advice made several of my clients extremely wealthy while the stock market and specifically the financial sector drastically fell.
Those that are thinking about investing in Argentina might do well to think about real estate. I believe that conventional type mortgages will come into the picture in the future. When that happens, real estate prices here will be like anywhere else in the world. Property rates will explode. Also, keep in mind once you establish rentals in your property, you are turning your real estate into a business. I have received unsolicited offers to purchase just about every apartment that I own. The offers are at least 50% higher than the purchase price that I paid just a year ago. It's clear to see that the people that want to buy my apartments want to purchase it as a business, not just an apartment. Every apartment that I buy for myself and my consulting clients turns into a mini business. I would compare it to owning a room in a hotel. You can use it whenever you want without paying a fee and yet you still make the income when it's rented out. The "hotel" (my company) rents it out for you, takes care of paying your bills and collecting the money and you get the rental income every month.
I have apartments that I charge about u$s 150/night and they stay booked about 20 days a month and they are booked solid 3 or 4 months in advance. Why? I put about u$s 25,000 - $30,000 into EACH apartment in high end furniture, mattresses, bedding, high-speed Internet, USA phone lines, cell phones, lighting from Italy, etc. I use the same mattress that the Four Season's Presidential suite uses. I'm talking about a 4,500 peso mattress($1,200+). Most local apartment owners are using their grandmother's mattress and furniture that was passed down from family member to family member. I don't compete against the other apartment rentals in town. I compete with the hotels. And the truth is that when you compare the amenities, the space, and the price... the hotels can't compete with what we are offering on our higher-end luxury properties.
The locals can’t and won't do what I'm doing. Most won't even make the investment to order high-speed Internet. Do you think they will buy a 4,500+ peso mattress? The majority of my clients aren’t looking for a cheap apartment. The backpacker type isn’t my clientele. I figured out a long time ago that there are thousands of cheap apartments with furniture that has been passed down from family to family. However, there were no real luxury property rentals. I went after the people that usually stay in the Four Seasons or Alvear Palace, the Loi Suites Recoleta, and the like. I pioneered the luxury rental market here in Buenos Aires (and quite possibly the world) and now many are attempting to copy it.
There are other companies that have basically copied our business model on both the apartment rentals and also the consulting assisting people to buy. Consider that many of these companies do not even have an office, are not a legal, registered corporation in Argentina and have only purchased a few properties in the past. I have purchased tens of millions of dollars in real estate in Buenos Aires and have been told that I have purchased more residential real estate in Buenos Aires the past 3 years than any single individual in the world. My company and I have been featured in many prominent newspapers and magazines around the world - (See our Media section)
It's not as easy as people think it is. Most people that don't know my story mistakenly believe I am some American that just started purchasing property here and started renting it out. They don't understand that I took years to put together a business plan and follow it through methodically. That is the reason why I have been so successful along with the hard work and long hours and a totally dedicated and professional staff of wonderful employees.
Many people have attempted to do what I am doing but they looked at it as competing against other apartments rather than competing against the hotels. Many people told me that there wasn't a market for what I was doing. I proved them WRONG. I created the market and the apartments based on what people were looking for. On a weekly basis my new clients tell me that they were always looking for properties like mine vs. staying in an expensive hotel room. Unless the hotels all go out of business, my company will be thriving well into the future. We have plans to continue buying properties and going even higher end on our new properties. We don't fear competition... we welcome it. I have created one of the most successful real estate consulting and property management companies in South America.
Moving to Argentina was the best decision of my life. I’m working much harder here. In the USA, I rarely worked more than an 8 hour day except during my busy season. Here I routinely work 12-15+ hours a day but I find it rewarding. The difference now is that I own my own companies so I'm working for myself. I'm creating valuable corporations. I have already received offers from individuals as well as major financial institutions in both the USA and UK to purchase my company. I have turned down all offers so far as I never plan to work for someone else again.
I have become an expert in the field of buying residential real estate in Argentina. I challenge anyone to find someone in Argentina that knows more about buying real estate as an investment than my company. Consider this, the locals that have lived here all their lives have started to hire me and are paying my normal consulting fee rates. Imagine a Porteño paying an American to help them purchase property in their own city.
As I mentioned, moving to Argentina was the best decision of my life and I never see myself moving back to the USA. The USA is one of the best countries in the world. I don't miss it though. I didn't move because I had to or I was going through some mid-life crises. I moved because I truly believe that you should be with the person you enjoy being with, you should visit the cities you've always dreamed of visiting and you should live in a city that you are passionate about.
I found that most people complain about various aspects of their lives yet they do nothing to change it. To me it's very simple. If you aren't happy with your partner you find another one. If you don't like your job - quit and find another one. If you don't like the city you are living in - move to another one that you like better. Life is what you make of it.
Everyone that I knew told me it was very "risky" moving to Argentina, leaving a good job and the money. For me, the "risky" thing would have been to stay in the USA and give up the chance to fulfill a dream. It would have been "risky" to grow old and one day be sitting on a rocking chair and wonder how my life would have been if I moved to Argentina. Risk is a subjective term.
Most people lead very ordinary lives. They have an ordinary job, live in an ordinary house and do ordinary things. I found that if you want an extraordinary life you must do extraordinary things. Moving to Argentina was one of those things and after moving here I knew I made the right decision. I certainly didn't move to Argentina for the money. If I wanted to make a lot of money I would have stayed in the USA. Still, I figured if I could be in the city that I love and have a successful business, I would fulfill my dream. It's hard work but very fulfilling. I'm very fortunate to be living my dream.
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