Pros-Cons of Apartment Ownership From Experience

[Daddy Rulz]

By law, American citizens are taxed on their worldwide income, where ever it is earned. Failure to declare and pay is a felony.

But to quote a certain real estate guru: "Taxes? Only the little people pay taxes."

There is some exemption for us little guys making less than 82K and not spending more than 30 days per year in Los EEUU no?

[Saint]

As I posted, I won't name names. The fact that you chose to post about this I'll comment to your post. You have several things wrong. Yes, I DID tell you that I did NOT want to commit the $250,000 to $500,000 at the time. That is absolutely true. I also told you that I was NOT interested. If you recall my exact words were, "I think there possibly MIGHT be a time in the future but I have NO interest now and I am comfortable and I know I can build the reputation better and just really comfortable with how things are". Yes, you did offer to provide the capital. But again, I had no interest then and honestly, I have no interest now. I've turned down all 4 offers. As I told you 1.5 years ago. I am comfortable with my current lifestyle and set up and again I'll say it hasn't nearly reached the potential yet and even when it did....I probably still wouldn't sell. Money isn't everything.

NO, your part about me contacting other companies is EXACTLY FALSE. I NEVER at any time contacted ANYONE. ALL 4 offers I received were unsolicited. I've never even once hinted to anyone that I wanted to sell, nor shopped my company at all. (The offers started coming in after my company was mentioned in the most respected financial magazine in the world).

I resent the fact that you are implying that I did. I never at ANY time broke the confidentially of our conversation and the fact that you decided to post yourself is your problem. I am not the one that broke confidentially. I was very surprised last year when I saw Exon posting about this and I was surprised when I saw your email to Exon, so it was you that broke the confidentiality of our conversation. It's also important to note that I was never interested and I think even you will agree to that. I NEVER at all expressed interest in it.

NO, I didn't distance you until you accidentally sent me an email that you MEANT to sent to Exon. It was at THAT time that I saw that you are the type of person that would talk about someone behind their back. I never raised the rent 30% for that property that you were in (that I no longer manage) You neglect to mention the fact that I gave you a huge discount so really when you claim 30% raise, while technically it is true, you neglect to mention you probably got a 30% discount to the posted prices. Demand steadily went up on the property and once the lease ended it just didn't make sense to offer that 30% discount. Also, it's not true that people stopped answering your calls and making repairs to your requests. That isn't true. You even have a post on here praising the quick service.

I'm not claiming to be some big time operator. I never did. As I told you 1.5 years ago. I'm very comfortable with my lifestyle and position. I didn't move to Argentina to get rich. No one would move to South America to get rich. Again, it's important to note that I NEVER at ANY time took anything you said. I'm happy being "small time". If I wanted to be "big time" I'd have accepted your offer back 1.5 years ago. You and I BOTH know I could have made millions of dollars with that. "Small time" is just fine with me.... :)

Also, not all the companies that are offering to buy mine are trying to do what you said. This latest one here in Chicago wants to do something similar. I'm NOT interested in selling as I told you before.

Anyway, I wish you no ill well at all and actually I hope you are doing well. I know you to be a gentleman. Really, the only problem I've ever had with you was the email you sent me accidentally. I'm just posting the facts as they are. Although I'm not interested in selling, I'll still accept the first class trip to the USA to hear the pitches.

Best of luck to you. Remember as I told you 1.5 years ago.... "Money isn't everything". In fact, sometimes it complicates your life. Making $5 +million a year honestly wouldn't change my lifestyle so there is not really a reason for me to complicate my life. I will NEVER be an employee again...

PS. Yes, Hunt99 is right. You must pay taxes as a US citizen. His quote is from Leona Helmsley who spent 18 months in jail for tax evasion.

[Hunt99]

Do Americans not have to pay US income tax on all capital gains?

By law, American citizens are taxed on their worldwide income, where ever it is earned. Failure to declare and pay is a felony.

But to quote a certain real estate guru: "Taxes? Only the little people pay taxes."

[Moore]

People HAVE been making money, selling their properties, paying 0% capital gains taxes on the sale when you buy as an individual (1.5% transfer tax when you sell that you can actually legally get deferred if you are using the proceeds to buy another property in Buenos Aires)

Do Americans not have to pay US income tax on all capital gains?

[Pete Puma]

About a 20% ROI with the cash flow not counting the appreciation. You can be free and clear in 5-6 years. Nice job. Reminds me of Las Vegas 10 years ago. PUMA

[Starfe]

The very first post is the same as the last post. Nothing really changes over time. What a shame.

[Saint]

First of all, Exon I appreciate you keeping the discussion intelligent (minus bashing or questioning Badboy on where his money came from). I never was bashing or slamming you. I was only posting FACTUAL posts. Everyone has their opinions and are entitled to it. It's one thing to post opinions, however I think even though you post opinions, you still have to stand up when your opinions are wrong or have been wrong. My only point with your posts (and always has been) is you have been posting for years (I believe since 2002) saying it's a mistake to buy here and it's a waste of money, going to lose money, can't get it out, yadda, yadda, yadda.

My only point is that you have been wrong since 2002. People HAVE been making money, selling their properties, paying 0% capital gains taxes on the sale when you buy as an individual (1.5% transfer tax when you sell that you can actually legally get deferred if you are using the proceeds to buy another property in Buenos Aires) and making excellent cash flow via rentals (much better than any sort of real estate in the USA) Again, I think for as much as people like Hunt99 want to bash, he and others simply can't deny (and may be a bit pissed) that I have been right on the call on 1) real estate; 2) the exchange rate 3) tourism rates / trends and 4) the economy since 2002.

Again, it's ok to have opinions. That is normal. You are keeping the conversation intelligent which is good. There is simply no need to bash anyone. I think anyone can agree ALL my posts since I started on this board I've NEVER bashed anyone, carried myself like a gentleman, respected people's privacy. NO ONE can deny that. I have over 800 posts and if you go back and do research you will find that I have traveled all over the world and offered helpful advice on many of my journeys. My posts don't bash anyone, they are not drivel and are meant to help people.

Exon - I'm NOT saying that it makes sense for everyone. I'm not even saying it makes sense to buy to live in down here. Another poster asked me if I have purchased with my own money. The answer is yes. As I mentioned, I purchased over u$s 1 million in properties in BA with my OWN money. Another u$s 50+ million with other client's money in the past 3 years. I'm continuing to buy and in fact I just bought another one (with my own money) last week in Palermo Soho in a new highrise that will be done in April 2007. I bought it with my money that is legal, I paid taxes on and again, my reputation is stellar and everything is above board.

Exon - I actually agree with one point of yours. It doesn't make sense to buy to live in here. That is true. Case in point, I live in an apartment that would cost me u$s 500,000 to purchase. I lease instead. I pay u$s 2,000 per month for an unfurnished apartment. I own many apartments in BA. You know what? I don't live in ANY of them. Why? With that u$s 500,000 I bought 3 apartments and I NET after all taxes, fees, expenses, utilties over u$s 8,000 per MONTH on them. It doesn't make sense to buy that apartment and live in it when I can make u$s 8,000 per month and take $2,000 and take it to pay the rent on my apartment and still have $6,000 free and clear in net cash flow. Also, keep in mind those properties that I purchased for u$s 500,000 I've received UNSOLICITED offers (I don't buy to flip) to purchase for up to 70% more than I paid for them so the capital appreciation has also gone up 70% since buying them. Some I have sold for VERY good profits but again, I didn't list them to sell. It was purchased by someone that actually stayed in them that really liked it and liked the business model so Yes, I did sell them and I'm still managing them so still making money with them.

Investing in South America and Argentina, as I mentioned is not for everyone but it makes sense for many and again, My only point Exon is that many of your posts were not factually correct. I do agree with your point if you don't live here in Buenos Aires or at the very least have an ethical, honest person / company managing it then it doesn't make sense. (Look what happened to the this original poster and his property management company!! That I agree with. As I said before, it won't make sense for 99.999% sense of the guys that read this forum I'm sure.

Pete Puma - There is risk in ANY investment as you know. I've never said there is no risk in investment in South America. Obviously every investment from gold, to oil, to stocks and even bonds have some sort of risk. You are exactly correct in your analysis that you posted. Even with cash deals that you can't leverage...it's still interesting. I have some apartments that I purchased in 2003 that will by paid off in full by the end of this year in rental income alone. That doesn't even count the capital appreciation on the property. Capital appreciation is icing on the cake but what I really like is the cash flow. The amount of monthly cash flow has been wonderful.

Also, I think you will find that even posters on the board that have bashed the Argentina economy on this and other boards have contacted me in the past to try to partner or work with my company in schemes to make millions of dollars per year. Obviously those that are financially savvy probably can figure out that my business model is extremely lucrative. I'm here in Chicago meeting in yet another meeting with some banks that want to buy my company. This is the 4th such meeting in the last year and I have 2 more meetings in New York next month. I'm not going to name names but these are VERY financially intelligent companies/banks that know a thing or two about investments.

I won't name names to protect anyone from being embarrased but I will say that one of the frequent bashers on the Argentina economy is at least one of the people that have approached me in the past about possible partnering schemes to make money together. Obviously this poster was exactly right as the companies and banks that have offered to purchase my company are trying to do the EXACT same thing that he proposed. It is interesting to note that I shot down the possibility of working with him when one time he accidentally slammed me to Exon in an email that he accidentally sent to me instead of Exon!!! Ha, ha. Too funny!

I TOTALLY agree that many of you are "tough guys" behind your screen alias and your anonymity. Many of you say things that you wouldn't say face to face or in public or in front of your business colleagues or your friends/family. That is Totally correct. I'm not saying 100% but I would totally agree with the poster with this point. Not only on this board but many other boards with screen names. I remember a few years ago before I moved to Argentina, I had a stalker that called my work (I was a Partner in a successful company in the USA before) and he was from one of these message boards. He for no good reason other than the fact as it turns out he was jealous of my life (which he later admitted). He was such a "tough guy" behind his emails to my company, his phone calls and threats.

I hired a private investigator and I ended up tracking him down (don't ask me how). This guy wasn't some "loser" but he was a very successful executive in the USA. He read one of these message boards and I had never met him. He never traveled but he wanted me to stop posting. It took 3 months but I tracked him down. The private detective found out where he worked, his wife's name, his kids, name, how much he made per year, the value of his house, his partner's names and numbers. So one day I called his house and I left a message to his house and told his wife that John "Saint" called. I think it freaked him out. Later, I left a message at his office with the same. I tracked him down to all the places he worked, the hotels he stayed at. He was traveling on business and I called him at his hotel one day. I told him that I was coming over there to confront him. I told him that maybe his wife would like to know what he has been doing. This is a totaly LOSER that was contacting my company for no reason.

This guy was crying and begging me not to do anything. He apologized and in the end, I didn't want any money. I only asked for 2 things. An apology and to tell me the reason why he did it. He did apologize and said he was just envious that I could travel to wherever I wanted to go and do the things I did. So in the end I do believe that people say things on these boards or act in a way that they would not in real life. After this incident I never met anyone from a message board again. Be careful on these boards. A lot of crazy people out there. If you are married or working for someone else that you might be embarrased by your association with this board then you shouldn't meet up at all. Trust me, there are DEFINITELY ways to find out who you people are. You may think you have anonymity but with time and money there ARE ways to find out your names, where you work, family, etc. I'm just posting this to say be careful as there are crazy people out there. I know, I experienced it.

PS. Hunt99 - Actually I was in Punta del Este LAST week in the house that I recently built enjoying it and the beach and closing some land deals there (as it turns out, my calls on Punta del Este were also correct). I didn't meet with Kirschner THAT trip but I HAVE met him in the past. I'm in Chicago right now and it's FREEZING and I WISH I was in Monte Carlo again (I loved it there my first trip) . Ha, ha. Cheers all.

Saint

[Exon123]

If thats how you feal you shoulda bought two or three places down their BadBoy.

Say, I've got a question for You.

Did You personally earn that money You just spent on a place down there? Or was it the proceeds of some Eastern European scam? Or maybe your Grand Father left it to you? I can't prove it but you didn't earn it.

I place a much higher value on my money than You do. You'd been much better off having signed a long term lease and invest the money using the income to pay rent.

Moreover, you give the Argentines another 4 years of inflation like we've all just wittnessed then look at what your property is worth. You'll be moving just like everyone else and when everyone starts listing their property see what its worth. The only market is foreign money, (we all admit Argentines can't afford property) When that foreign money starts pulling out, and it will, You hide and watch what that shits worth.

Its cheap for a reason

Exon

[Pete Puma]

I agree and disagree with you, to a certain point. I disagree with the foolish comment. There is are great deal of risk involved with Saint's investments, but there is less competition since there are not a lot of people with cash who want to invest that heavily in the BA market. One mans risk is another mans opportunity. Would I do it. No. I don't like investing where I don't live and I don't like condos. When I invested in Las Vegas I moved here. There were plenty of condos at that time that they were giving away. I am a west coast guy I like single family houses. Condos were great for cash flow, you could get your money back in 6-7 years even with an all cash deal. If Saint has that ROI then it is an interesting investment. You mentioned the down side, the up side is he can buy many properties in a big city, not an easy thing to do anymore. Fortune sometimes favors the brave. I wish him luck on his quest. PUMA

[BadMan]

Ex,

I think we all know real estate in BA is severely undervalued. I do believe that prices will go up alot more before they start to go down. The place I bought here in BA would have cost me 500 US in any major city in Europe. I am not worried. Again, I am not investing my life savings here. The amount of investment here is small at this point and worse case scenario is I break even. No worries man, but thanks for the free advice.

Bad

[Exon123]

Now, Now boy's don't be naughty and nasty to one another.

The subject is just how foolish it is to expose large amouts of captial in Argentina. The market has no liquidty, corruption is rampant, inflation unless stopped will make it undesirable to live or vacation their, You can't get a mortgage because they'd have to charge 20% or more just to keep up with inflation. Thats the reason its all cash and in USD no less.

Simply put "Your Fucked if You Buy Anything There"

Any good business man is going to look for the "Back Door" of any business deal before he goes threw the "Front Door" and commits to the deal. One must always maintain an "Exit Stratagy", I don't see one in Argentina.

And finally their are millions of investments one can make with large amounts of capital here in the USA that are much safer with better rates of returns than property in Argentina. Investing the money and using the income from it for rent is a much better stratagy. Your money is safe and you can walk away from a lease, you can't if you own the property, especially if you've put down all cash.

Exon

[Captain9026]

I don't think 99% is a stretch. I am sure at one time or another all of us have said something on one board or another we probably would not have said to someones face purely because it would not be appropriate. In the instance when I made my mistake I learned a valuable lesson and decided I would not say anything on a message board that I would not say face to face. I can promise you will never see me name calling or making fun of anyone on this board as that is not how I conduct myself in public and I will not compromise my standards or behavior just because my identity is hidden.

[BadMan]

Sidney? Are you smoking crack, I know you have run away to the Dominican Republic in hopes of avoiding my wrath (another joke asshole) And NO, I have never flamed without being bashed first.

Bad

PS, you are safe, I would never hit a granny ;)

[Hunt99]

"Saint & Hunt, I don't know either of you, but Hunt, your posts are hilarious and I couldn't stop laughing! "

Yeah Hunt's a real funny guy.come back down to BA Hunt between 3/18- 3/25. I've been hoping to meet this guy. We'll hit some of those restaurants you rave about, drink a few bottles of that stuff you drink, what is it called again, wine or something like that. We'll tell a few courtroom stories. We'll put a roof on a Comedor with Capt. Dave.come on down Hunt, I've been waiting to meet you.

I am deeply sorry, but with last night's business deal with SAINT! everything in my life has turned around. So I won't be able to join you.

And how terrific last night was! After concluding our real estate deal, SAINT! invited me to fly with him on his private 747 to Monte Carlo. We arrived a few hours later. We played bacarat with Jacques Chirac, a senior Prince of the Saudi monarchy, and the aforementioned Bill and Melinda Gates. Some piker named Warren Buffett was recruited to serve us our drinks and to explain to us those old-fashioned silly ideas about investing. How 20th century that old fossil is!

SAINT! introduced me to Karolina Kurkova, and he was so kind to describe me in the most flattering terms, so this hot babe was all over my bones last night. Really, I couldn't keep proper track of my cards, and that Saudi prince took me for a hundred thousand dollars in thirty minutes. Oh well, it's only money.

Anyway, for dinner Emeril Lagasse served us some wonderful stuff, I don't know how to pronounce half of what we ate, but SAINT! sure can, so you'll have to ask him. After dinner we stepped outside to have a smoke (damn smoke-free laws have been extended to Monte Carlo). We were accosted by some Gypsy children who looked exceptionally tattered and poor. Much to my amazement I learned that SAINT! speaks fluent Roma. He chatted with these young rascals in their own language, gave them pearls of wisdom including a tip on an apartment building for sale in San Telmo which they can turn a tidy profit on if they buy it. He then discreetly put a big wad of cash into the hand of one, and shooed them away.

As for your kind offer Slick1, as I was saying, I would love to come visit you in late March, but SAINT! is taking me with him to Davos, where he has been asked to give a private lecture to the leaders of the Federal Reserve, the European Central Bank, the Bank of England, the International Monetary Fund, and the World Bank. He has been approached by these institutions to consult on how to avoid a collapse of the international banking system due to excessive real estate speculation. As the world's leading authority on real estate, SAINT! was the obvious choice. Alan Greenspan was a distant second. Also, keep this under your hat, but a little birdie last night told me that they may acclaim SAINT! the head of a new Worldwide Central Bank, but don't say anything, let's leave the surprise for the end of next month.

OK boys, I am back in Manhattan this evening. As I said, the Cristal is on me at Scores. SAINT! has jetted off to Punta Del Este and is scheduled to consult with Nestor Kirchner this evening. I understand that K has offered to step aside and to nominate SAINT! as Peronist nominee for President this year. Of course, it would be a giant step down in prestige for our friend, so SAINT! has to figure a way to let him down gently.

[Pete Puma]

To say that 99% of the people here will change their tone if the conversation was face to face is a bit of a stretch. If you think you can read people that well then play in the El Alamo poker game. You should have no problem knowing what everyone is doing.