Best Areas to Rent-Buy-Live in Buenos Aires

[Quester3]

No sarcasm from me. In this day and age, single digit millions really isn't that much.

Moore- unless O is utterly foolish which I don't imagine he is, nobody is going to keep their entire net worth in one single stock, so I'd assumed 3% was plenty as the income generator from parking that cash into a money market to fund his income needs, and capital growth even on top of inflation would come from what are presumably his diversified assets.

If there are no diversified assets and just stock options from Google, then that's a whole different ball game.

[Orlandoirish]

Gents:

Nice to know you boyz can do the math. LMAO. BTW, its not too difficult to get 10K shares WHEN YOU WORK FOR GOOGLE AS IT DIRECTOR OF THEIR ORACLE APPLICATIONS SUITE.

LMAO.

[Exon123]

You stay put with the Berkshire, Hunt 99 but lets sell the Google and we'll buy that Denny's in Cleveland that Moore was trying to compete with El Alamo we were all talking about sometime ago. Thata be a winner.

Or possibly one mite be interested in my Calpine Junk bonds.

Exon

[Moore]

I don't know, are you talking class A or B shares of BRK? Warren would probably hold 'em!

[Hunt99]

Yes, this is all fine and well, but what am I to do with my 10,000 shares of Berkshire Hathaway?

[Moore]

3% gross interest is closer to 2% after taxes. Now take out inflation and you're losing money and your real principal is shrinking. Unless you're very old and only have say 10-15 yrs of life and expenses left, you need to be in equities and earn a historical longterm rate of 10.5% After taxes and inflation that gives you an income of about 5%. Thats about $200k per year net (and not allowing your purchasing power to shrink) or $17k / mo on which you can live fairly well in Argentina.

[Quester3]

One more zero there Exon.

Not $400k - it would be $4.35 million.

10k Google shares at today's close would be 4,352,300.

Even at the most conservative capital protection income account with zero risk, say a large multi-CD or multi-linked BofA investment services money market accounts, he'd earn 3.2% as of today. Or a yearly income in just interest at around $139k.

After taxes assuming the most incompetent tax account that saves you nothing and you get screwed the max tax rate, that leaves a monthly interest income of $7076 take home pay to live off. Only been here in BA a few days, but $7 grand a month seems pretty easily livable down here.

Drop the FDIC insurance and go with a tiny bit of risk like an E-trade money market account and that little 4.1% interest rate difference is an extra $38k - or basically about $9k monthly interest income.

[Exon123]

Good idea Orlandoish.

Hmmm lets see, at today's close your Google shares would be somewhere north of $400,000 dollars. I suggest you sell them at the market tomorrow morning a buy a little condo or something in New Mexico, fuck today's up grade.

Rent the condo and have your leasing agent put the proceeds in your checking account here in the USA. Then using your ATM card slowly withdraw the money and spend it on "Pussy" in Buenos Aires, the rest you can just waste.

Thats what I do.

Exon

[Orlandoirish]

Mongers:

Thanks for all the feedback, think I will keep my 10,000 share of Google IN the market and rent in BsAs! It's not worth the risk. Although tempting.

Cheers!

[Guiller]

I agree with the comment of Exon: it could take a long time to sell property. The reason is that, although the banks have plenty of money for mortage loans, most people who have a job cannot qualify for applying. One should bear in mind that the real income of this large portion of the society (which involves most of the middle class) was drastically reduced after the devaluation of 2001. So, being the middle class out of the market, the only potential buyers are either local or foreing investors, and this fact drastically reduces the possibility of selling a property in a short time. If one waits long enough and the property is worthvalued, eventually one could sell it, but on the other hand, investors have many choices, do not have practical pressures (like the need to have a place to move in) and would try to reduce the selling price to a real minimum.

Cheers

[Fred88]

Actually, of course, if Exon ever had to work at a 7-11, in about six months he'd have the franchise and be buying another one down the road. Then. Well, then, back to BsAs!

Peter / Fred88

[Hunt99]

if I Fuck Up I'll end up working at 7-11 which means no more pussy in Argentina for Exon.

Exon, fetch me a large Cherry Slurpee. Chop chop! And also two Big Bite hot dogs, while you're at it.

[Exon123]

"Exon Id like to know what US markets you recommend. I was considering doing what you recommended - buying a place and renting it out. But from what I see and read, the US prices are so incredibly inflated that you generally can't cover costs and the mortgage with the rental income"

Look real hard at the "Sun Belts" away from the water. The beachs are to inflated, expensive!

My choice would be New Mexico, buy in the path of progress and wait for the "Baby Boomers" to retire and come to you, And they will.

On my last trip, six weeks, I had some interesting experience's in renting an apartment. I ended up renting from Roxana simply because she's my friend and I wanted her to have my money rather than some "Porteno".

But what I found out was theres property all over Buenos Aires for RENT, and more coming on line everyday. In case no one has noticed theres a building boom in Buenos Aires & the whole town is under construction. Which means there more product than customers. Much like "pussy" down there. To prove my point go to some of the rental website's and look at there inventory, there are hundreds of them.

Example: I had a friend whom joined me down there. He rented a beautiful one bedroom in Recoleta on Junical he picked out months in advance which was empty waiting for him. The rent was $200 per week, $600 per month. On a long term lease it would be less then that.

Moreover, the best way would be to find a place you like. Then cut a rent deal with the owner on a long term basis. Much like Jackson has done in Recolrta, with an option to renew the lease.

Heres an interesting question.

How many people do you Mongers know with a $100,000 US Dollars they have liquid and could just plop it down on property in Argentina without selling anything or changeing there standard of living?

My guess NONE.

I hang with some "Big Players" and even they would be hard pressed to do that. Their money is always working, so should yours be. They would be foolish to liquidate assets, good preforming assets, to buy property in Argentina and take such a risk.

As I said I do this sort of thing for a living and if I Fuck Up I'll end up working at 7-11 which means no more pussy in Argentina for Exon. Something I just could not live with.

Exon

[Moore]

As Hunt99 says, in BA (and other cities like Cordoba, Rosario, & MarDelPlata) you generally want to be closer to the center, and also on the correct side of it. Palermo and Belgrano are great options (north of center, well within capital yet far enough from Microcentro to have a more relaxed feel) If you're looking closer to the center, you definitely want to be north of Cordoba Av.

Check out Saint's extensive posts about the real estate market and his business. I know of another local company, tierraestates.com, which is run by a British guy and also mainly geared towards foreigners buying (and selling) property in Argentina.

As Exon says, the liquidity level here is nowhere near that of the USA, but its not illiquid either. "Flipping" new properties under construction has become quite popular around Recoleta. People put about 30% down on say a US$150k apt and then sell it a few months later (still under construction) for 160k, making a quick 20% return. Part of the liquidity problem is that the vast majority of Argentines have essentially zero net worth.

There is a new building on Ayacucho very close to my apt which is just being finished. I went in there about 6 months ago when it was just being started to have a look and there were already only 2 units (out of about 20) available. Every buyer had to put down about us50k (around 30%) to secure a unit. Thats just one example, but there is cash out there if you're selling something desireable.

I would not buy property or anything else as an investment in Argentina. However, if I decide to remain here forever then I will buy an apt as my permanent home. You can buy a good 90m2 place in Recoleta for about US140k and completely renovate it for under US10k. I think thats a pretty good deal. Rents are going up like everything else, although I expect the peso fx rate to shoot into the stratosphere not later than next year. Inflation at 1000% and the fx rate quoted in inches of 100peso bills per dollar. Thats when it gets really fun.

And when there is blood in the streets, thats when the ballsy people load up on local assets, like some people did here in early 2002 and others did on Wall Street in late 1929. I'll wait for the dust to settle just a little while.

Exon, I'd like to know what US markets you recommend. I was considering doing what you recommended - buying a place and renting it out. But from what I see and read, the US prices are so incredibly inflated that you generally can't cover costs and the mortgage with the rental income.

[Exon123]

Argentina's real estate is an all "CASH" market, there are "NO Term's" such as 30 year morgage's, bank Re-Finances or Home Owner Equity Loans.

I believe the major reason for this is the 12% inflation rate admitted by the government, which in fact is more like 20 to 25 percent Inflation in real life.

Since the above is True there is "No Liquidity" in Argentina's Real Estate, You can "Buy" but you can't "Sell". Once you own the property you can't "Sell" it so theres no way out. Your stuck with your investment pretty much forever, since the Seller needs Cash at Closing to protect Himself against the 20 to 25 percent inflation mentioned above.

Using a $100,000 cash as an example, (about what you'd expect to pay for decent place in or near Capital Federal) You'd be much better off using it as a down payment on a rental property here in the USA. Servicing the excess debt with the rental income and renting in Argentina. Sure you might have some debt you've leveraged, maybe even some negitive cash flow, but you've got "liquidity". You can get out of the deal, something that down the road will be priceless. You can't do that in Argentina, its all cash and in US Dollars to boot.

I recently spent a few nights in Jacksons apartment. As I was moving out a prominate Argentine was moving in. It turned out he was born in Recoleta a few blocks from Jackson's place and now is an investment banker in New York City. He works his trade only in Mexico & Europe, not in Argentina, he doesn't trust his country men. He went on to tell me that all his wealthy Argentine friends had indeed bought property at rock bottom prices after the devaluation and were now selling it as fast as they could. He went on to say that he had a friend whom is a director of "UBS" in New York (Union Bank of Switzerland) a very large international bank, And that they had very large loans in certain sectors of the Argentine economy. Jackson's new tenant went on to say that he asked his important banker friend where all the money was going. The banker told him their big clients were moving money out of Argentina just as fast as they could to Miami, New York, the Caymans, Switzerland and Europe, any place but Argentina. They didn't want to hold peso's, only Dollars or Euro's.

Now all of the above has got to tell you something. When you read the papers down there all you hear about in is strife and unrest coupled with strikes, protesters, inflation, corruption and a crooked government made up of "Home Boy's" that you could never trust.

Heed Exon's advice, Exon does this type of thing for a living and Exon is damn good at it. Matter of Fact all of Exon's mongering money comes from just this type of thinking.

Exon