Buying Property for the School
July 10, 2007
While I was in Nicaragua recently, I had the chance to move forward with the technical school I am planning to establish for the new community my partner and I are developing. A group of people from the village came by my house to talk. Their idea is to begin by focusing on English and computer classes for pre-kindergarten kids and English classes for seniors. They have already gotten eight volunteers, qualified teachers, who have started teaching some of the courses.
I told them that I am impressed, and made arrangements to meet the teachers at a later time. We also discussed their compensation. They don't need to be paid formally, they assured me. They are doing it for the community. But if they get some sort of "present," that would be nice. I told them not to worry.
They have found a place to build the school that is perfectly located - a parcel of land that sits between the two hamlets they come from, Limon Uno and Limon Dos. I asked them how big the parcel is, and they said "half a manzana" (about an acre). Then I asked what it would cost, and I thought they said a thousand dollars. A thousand dollars sounded like the right price to pay for an acre of land - but then I realized they meant $10,000.
When I first came to the Tola area 10 years ago, you could buy farmland for $1,000 an acre. Today, it costs 10 times that much. The first beachfront lots we sold at Rancho Santana were priced at $39,000. Today, those lots are selling for more than $150,000. The people who were brave enough to buy back then were richly rewarded. HL, one of our first buyers, bought 10 lots (beachfront and beach view) for about $250,000. They are now worth about $2.5 million.
This is good news for the early buyers, and it has been good for our plans to convert this place into a world-class residential resort community. But it will make it difficult for me to buy the land I need for the technical school.
I told my visitors that I would take a look at the site they found later in afternoon.
At 5:30, I headed over there with N, who has been helping me with my local charities. We liked what we saw and asked if there was more than just half a manzana. As it turns out, the family that's selling it owns the entire field, about five manzanas, which would cost me $100,000. If I pay even half their asking price, I'll be $50,000 over budget. That will mean $50,000 less I can spend on building the school and paying the teachers.
I told the family's representative that I would think about it and get back to him. I will come up with something - a realistic offer for all five manzanas.
I should have bought thousands of extra acres when we bought the land for Rancho Santana. That's how the big developers get rich when they move into unchartered territory. I will remember this lesson if I ever decide to buy more property somewhere in the developing world.
posted by M. Masterson @ 2:39 PM,
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