Expert: Russ Martin - 9/29/2006

Question
Hi Russ, I have been thinking of buying a land sight at Costa Esterillos Estates that is being developed by "Costa Developers". This is to be a gated community similar to the nearby coastal communities such as Nativa, Del Pacifico, and Monterey. This sounds like a good opportunity, but I have heard that there are some "shady" people who run scams on foreigners. Is Costa Developers ligit? SO+ Mussio Madrigal are the arquitecos, and Pathman Lewis,LLP are the attorneys affiliated with the developer. Any information that you can give will be appreciated greatly. In Peace, Dray  drsmoke23@msn.com

Answer
Ok, you have "heard" correctly, there are some shady operators that are heavily promoting Costa Rica real estate through telemarketing, S*AM email, the Internet (often Pay per click ads) and even TV ads.

There are some common denominators:
- They are scam artists, so they prey upon your greed promising fantatastic (dare I say unbelieveable?) returns.  Is the return on your investment that the developer is promising very high and very short term?

- They make you put money down on the property before you can see it, in some cases as much as $25,000.  

- They tell you have to purchase now or you will miss the boat.

Finally, anyone who is considering buying real estate, particularly in a foreign country, should not buy it sight unseen.   

Now I can't comment specifically on Costa Developers, because I don't have enough details on their project.  There are many good developments that offer nice pre-construction prices.  However, you can not close on any lot until you have electricity, a road and water to the lot.  You should not even put very much money down until those essentials are in place.

I can tell you that you should compare prices between all the developments you mention.  I am very familiar with the Nativa project, and there you have concrete roads already in place, underground utilities already in place and the master plan has already been approved at INVU.  Monterrey I believe is similar and it has a luxury hotel already in place too.  So if the prices are similar (close) and the infrastructure is not actually in place then it would be a very bad deal.  

In any case, to answer these types of questions, I have developed a specific checklist in PDF format that you can download.  This will allow you to rate any developer and determine how risky an investment with them will be.
http://american-european.net/living_costa_rica/index.php/topic,366.0.html