"In the Pursuit of Uncommon, High Yield Investment Opportunities, You Can Count on Us to Always Find the Way"
We refer to "Past & Present" here, because we have included some areas of research/opportunity from our recent "pre-Stonehenge" past, so you can gain a better understanding of where we have come from, where we are now, and the directions we may be leaning towards.
We have seen solid gains in Panama from this time test strategy buy low, rent for a great return and hold for further appreciation. Our strategy here was to purchase existing, quality concrete construction...
We first started to look at Oil and Gas opportunities in 2004 when oil was around $35-$40 per barrel (considered very high at the time). Our research was clear, as high as oil prices "seemed" to everyone around us, we believed very strongly that we would see $70/bbl oil within the next couple of years and then spikes to $100 or even $200 in the years to follow.
Our strategy, then, was to locate and assess small scale drilling projects that would allow the "average guy" to participate directly in Oil & Gas. Typically we assessed "Private Placement" opportunities which allowed an investor to put up a portion of the drilling and exploration cost and in turn achieve a percentage ownership of the resulting production.
Our rationale was that oil would provide a great commodity hedge against the skeptical future of the US dollar, direct drilling provided amazing tax incentives and we saw Oil and Gas as clear winners in the years ahead based on future price increases which we believed would be caused by extremely tight supply and demand factors.
Today looking back, we see that our $70/bbl oil price prediction was achieved and feel that past Oil & Gas ventures will become increasingly more attractive as the "Peak Oil" phenomenon gains traction and supply/demand factors take oil into what we believe will be $100 and even $200/bbl price ranges. China perhaps has been an even bigger factor than we imagined and will accelerate/exacerbate what is already a very tight supply/demand curve. With the weakening US dollar and geo-political turmoil we believe we may see $100/bbl oil as early as 2007 and $200/bbl prior to 2009.
For more current information regarding "Peak Oil" and assessing Oil & Gas private placements, visit OilAndGas101.net.
Fortunately, for us, Panama has been a relatively undiscovered destination, including its strikingly beautiful beach front on both the Pacific and Caribbean sides. Only recently has there been a surge in real estate prices and this surge has not yet arrived at all beach front locations. Many coastal properties reside in the hands of local farmers and fishermen who, while not owning the properties, have certain rights, known in Panama as "Rights of Possession". While rights of possession can be purchased, the purchaser will still not own the property, but will retain those same previous "Rights of Possession". For this reason and some associated risks, "Rights of Possession" represent a significant price discount over "Titled" property. Therein lays the opportunity.
Purchasing a "Rights of Possession" beach front property and then taking it through the titling process adds significant value to the property. Only then can the property be truly owned. This allows one to develop as one wants, have a mortgage if one chooses or in our case sell at a huge profit. In fact, we have seen properties increase 10 fold in value through a combination of titling and price appreciation (as titling can be a 1, 2 or even 3 year process).
Our strategy here is 3 fold. Firstly to add value based on the titling process. Secondly to purchase property that currently has no road access but where road access is already contracted for and construction has begun. Thusly we are able to purchase at a reduced price, property with no road access, and later, upon completion of titling and road construction sell a titled "road accessible" beach front property. Thirdly we see this form of property ownership as a great hedge against an increasingly shaky US dollar. For many reasons we view this as a very conservative opportunity and even more so since the supply of attractive beach front is so limited.
The greatest returns will be made by purchasing the "Rights of Possession" at the absolute lowest price. As the market for these relatively unknown beach front properties continues to show price increases this will impact the bottom line return. Ten fold returns drop to 8, 5 and 3 fold returns quite quickly with increases in the original purchase price of the "Rights of Possession" properties. This is clearly a situation of "The Sooner the Better". As we are not in a position to purchase all the real estate along the Panama coast we welcome inquiries from interested parties. As it stands now, we believe the window of opportunity for such lucrative real estate investments will remain open through 2008 at the latest. Please contact us if you desire more information regarding such opportunities or visit our Opportunities - Non-Accredited section of the website which is open to everyone.
Teak Forestry is one of those amazing opportunities you just never hear about and when you do you might have initial doubts. The fact is however, that managed timber is conservative, consistent, an amazing commodity hedge against the US dollar and actually can produce very attractive returns.
According to Dr. Steve Sjuggerud, president of Investment U, “Timber beats stocks. Managed timber, has actually beaten the stock market – with less risk – over the long run. From 1973 – 2002, managed timber returned roughly 15% annually while stocks returned about 11%.......Timber is uncorrelated to stocks. Trees don’t know about the war in Iraq, or the bear market in the NASDAQ. While stocks couldn't keep up with inflation in the 1970s, timberland never had a losing year! Trees just keep growing year after year. So timber is an excellent way to balance your portfolio as its value rises even when stocks are falling.”
The price of timber has consistently beaten inflation. Timber is thought of as a good inflation hedge, and the numbers show that to be true. According to legendary investor Jeremy Grantham, over the last century, timber prices have risen at 3.3% above the rate of inflation.
With most timber deals you own not one, but two prime inflation hedging commodities, property and timber.
Steve and Jeremy are referring to the quality of timber investments in general. Now consider for a moment that teak, the world's most valuable hardwood grows 3 times as fast as pine and sells at double the price.
Teak operations we have assessed return conservatively 15% - 20% on the growth of the trees alone and when you factor in the increasing price of teak you can easily see returns of 20% - 25% in what many consider to be a conservative investment.
When we are assessing Teak Investment opportunities consideration is given to the management first and foremost and secondly because Teak takes a while to grow we like to feel comfortable with both the short and long term exit strategies.
Teak is where we'd like to see everyone in our investment family place a portion of their conservative funds for diversity, stability and relatively high returns.
We first became interested in Panama several years ago, in regards to potential tax strategies. We soon discovered a land of rare circumstance and opportunity. While Panama's boom has already produced phenomenal returns we see many reasons why this is only the beginning of a much larger and more enduring trend.
Panama's situation is unique and in large part due to the geographic benefit of being the "thinnest" country separating two large oceans and the subsequent canal that has initiated and will continue to drive, both directly and indirectly, future growth. While the current canal expansion itself is a massively impressive $5.3 Billion dollar project it is a drop in the bucket for what is about to take place in Panama.
Before we get into some serious numbers, let's put things into proper perspective. Panama has a total population of only 3 million, approximately 100 times smaller than the United States. So when we speak of a $5.3 Billion canal expansion you could liken that to the effects of a $530 Billion capital project in the US. The economic benefits of such a project in the US would be enormous to say the least.
Now imagine if the US were to initiate 10 times as many mega projects for a sum of $5 TRILLION in new projects to be completed over the next decade. The economic impact and subsequent spin-off would be nothing short of astounding. Now you have an idea of what is about to take place in Panama.
We are talking about mega-projects like:
$8 Billion Oxy and Qatar Petroleum Company refinery in the Western part of the country.
Imagine a decade or more of massive scale projects and you can understand why we do not see Panama as a bubble phenomenon. We simply view Panama as an exceptionally unique situation and opportunity.
We have seen solid gains in Panama from this time test strategy buy low, rent for a great return and hold for further appreciation.
Our strategy here was to purchase existing, quality concrete construction units in Panama's banking district. Due to a shortage of quality hotel space there is an excellent market for short term rentals in this area. We work with a very professional property management company in Panama so as to avoid any personal headaches. Returns on the rental component alone project out at better than 10-15% per year. The capital appreciation of course has been much higher than that and we are expecting 50-100% on our properties through the course of this year.
We will continue to hold.
Unfortunately this is one of those windows that may have already closed. That is if you were looking for a revenue producing property that returned 10% or higher on your money. With higher purchase prices the rental return will obviously be lower. We see 5-7% as more realistic now. It's still a great way to hold your property for appreciation value but if you are looking for an income source it's around half what it was a short time ago.
If you still have in this strategy feel free to call us. We will be more than happy to spend some time discussing options.
We are currently assessing 2 large scale development projects in various stages of completion and distress. When we refer to distress, it usually means the money has run out and it's likely that something serious and unforeseen has occurred. This could be due to inexperience, poor planning, dumb luck and a host of other factors.
In Panama when the money runs out it can be very challenging to achieve any kind of bridge financing. With no financing, obligations pending and the clock ticking it is often prudent to sell out for what you can. Here is where being in the right place at the right time, with the right amount of cash can make small fortunes.
In situations such as these we will take on partners in order to quickly finance the purchase of opportunities and then flip them or take them through to a level of development where the lots can be sold quickly at fire sale prices.
If you would like to know more or would like to be put on our list of interested potential partners please give us a call and we be more than happy to discuss details.
Although, our president and his family, grew up around gold in South Africa, it was not until 2001, with the price of gold under $300/oz, that they started to again look for opportunities in gold. With the gold price having reached multi-year highs in 2007, despite what we believe to be market manipulation to keep its price down. we believe it is poised to go over $1000 in 2008 and in fact we believe it could even go to multiples of that figure by 2010.
Although we currently do not have an existing gold opportunity we love gold. It represents something we have been involved with in the past and will continue to keep a portion our personal portfolio in it. We believe it to be the ultimate hedge against the crumbling US dollar and paper money in general.