The Good, the Bad, and the Tumbling Down--What You Could Buy in Panama City Right Now

International Living Postcards--Saturday Edition
http://www.internationalliving.com

Saturday, Nov. 12, 2005
Panama City, Panama

Dear International Living Reader,

It's all over. But for the 75 attendees who attended the International Real Estate Forum in Panama City this week, it's all about to begin.

In the past six hours, I've led three separate groups on field trips through Panama City to evaluate live different classes of real estate currently on offer, to show these International Living readers how and where to buy smart in this market.

We looked at a renovation project in the historic Old Town, Casco Viejo. You could carve up this 5-800-square-foot colonial building several ways (but I would try to get four apartments and three retail units out of it). Old colonials of this caliber are available in strictly limited supply.

Next, we went to the headquarters of one of the leading developers in Panama City to kick around numbers for various off-plan developments. We went into detail about the importance of timing and terms, including when and how to negotiate price. Off-plan properties are pre-construction opportunities. You get to come in at the blueprint stage. Before the first roof is raised…before the first nail is driven…ideally, before the ground is even broken. That means you pay less--to get more upside potential.

We wrapped up with a look at a resale property, evaluating it as a rental opportunity. As it turned out, it didn't stand up to our rigorous assessment, but running the numbers live and in person as we did was a useful exercise for everyone.

Normally, when I do this on my own, evaluating these types of properties, I'm in and out in under 10 minutes. But this was a good group, with smart questions, and we discussed in detail the angles and opportunities for each property.

Frankly, I'm beat. But, as ever, your Forum Insider, Thom Hickling, is standing by to tell you in greater detail what happened when 75 new real estate mavens were let loose in Panama City.

I'll let Thom take it from here…

Lief Simon
Real Estate Editor, International Living

The Good, the Bad, and the Tumbling Down--What You Could Buy in Panama City Right Now

Live from the International Real Estate Forum
Panama City, Panama

Dear International Living Reader,

You can't learn to ride a bike by reading a book.

And, likewise, you'll never make money in global real estate by reading reports, studying strategies, or even attending seminars. Eventually, you've got to get out there and do it.

Dreams, questions, study, and research all have their place. But nothing is accomplished until you take action.

After two days of intense learning, presentations, workshops, and Q & A sessions, Lief Simon, editor of Global Real Estate Investor, led attendees from the International Real Estate Forum in Panama City on a series of three field trips to see current opportunities on offer in the city. It was a true hands-on learning experience. A couple of dozen of us filled the tour bus for the excursion I tagged along for and headed first to Casco Viejo, the old colonial section of the city, less than 10 minutes from the Miramar Intercontinental Hotel where the conference had been held.

The properties on Lief's agenda were not large enough to accommodate viewing by all 75 conference attendees at once, so Lief had arranged to break our big group up into three smaller tours--two hours each. As I said, I joined the final trip of the day.

I'd like to share with the highlights of this excursion, and also show you how you can save hundreds, even thousands of dollars and get started in what Lief calls "the most profitable and fun way to invest today."

A Hot Time in the Old Town

Driving through a bustling commercial district, then past the gates of raggedy Chinatown, we entered the Panama City neighborhood most likely to experience revitalization in coming years. In fact, the renaissance is already under way.

This is the spot where International Living has put down roots in this city. Two years ago, IL purchased and restored a French-colonial building in Casco Viejo that is now home to our Panama office as well as three apartments (which we offer for short-term rental and use as a base when our globetrotting staff is in town).

Casco Viejo (old compound) was built after the pirate Sir Henry Morgan sacked Old Panama (Panama Viejo) in 1671. Today little is left of Old Panama but a few ruins and stone walls. You can walk around it all in a few minutes.

Casco Viejo, on the other hand, is a sprawling neighborhood situated eight kilometers from the original city on a more easily defended rocky peninsula. I've spent hours wandering the streets here. They're safe…even if they don't always appear so. Parts of this area are still tumbling-down. But special police on bicycles patrol constantly so you're never really at risk.

Our bus stopped at the corner of Avenue A and 6th St. San Felipe, in front of a grand colonial of 540 square meters (5,812 square feet). The old building stands majestically recalling the glory of its time and original owner, Nicanor de Obarrio, a leading figure in the Panamanian independence movement. Once this was a single-family dwelling, a symbol of status and wealth in the glory days of Casco Viejo.

Matilde Obarrio de Mallet, the sister of Nicanor, received the house from her brother. Lady Matilde, who eventually married Lord Mallet, England's Ambassador to Panama, was the founder of the Red Cross in Panama and is a role model for strong and compassionate Panamanian women to this day. Despite the peeling paint, the decrepit floorboards, and the stench of neglect, standing in this proud old structure, you can feel a connection with its important history.

Apparently, this building once housed Panamanian bureaucracy and may have provided temporary housing for President Porra while the Panamanian Casa Blanca (White House), a few blocks away, was being remodeled. But that was some time back.

Unlike Panama Viejo, which was sacked in the 17th century, Casco Viejo was slowly strangled, over many decades, by misguided government policies. Ridiculous rent controls locked in prices to 1940 values and turned Casco Viejo into a slum for decades. The wealthy aristocrats who had made this their home abandoned it for the suburbs and the new, sparkling high-rises downtown. The mansion we were viewing was probably a slum dwelling for dozens of families at some point in its history.

Rebuilding Casco Viejo

Right now, the streets of Casco Viejo are torn up, and work crews are doing something with the sewer system. All over, you see the slow but steady process of gentrification. Two major reconstruction projects are taking place a stone's throw from the building we'd come to see.

Lief explained some of the benefits of this property from a buyer's perspective. It's large enough to subdivide if you wanted to make condo units. The first floor was and could be again a commercial property. And commercial property goes for about $1,500 per square meter (as opposed to residential property, which trades for about $1,200 per square meter).

The casa grande is in relatively good shape, although inside, as Lief says, it's a total gut job. Lief explains that this is great selling point. In an area like this, you can buy properties that have already been restored. However, 9 times out of 10, things won't have been done well or right or to your specs. So you'll pay for the work that's been done…then pay to have the work redone, too. But with a property like this, where nothing has been done inside for decades, you save the architectural details that warrant preservation, tear out the rest, and rebuild the way that you want.

The building has a terrace on its roof. An ugly roof detracting from the classic colonial architecture covers it, but that may have protected the building from greater damage over the decades. The historic status of the community means you wouldn't be allowed to add a rooftop terrace when rehabbing another building, but as this building already has it, you would be permitted to keep that feature and improve on it within historic architectural guidelines. It's a feature that sets the building apart from others and could make it a more enchanting place to live.

Restoration and construction costs in Casco Viejo currently run about $60 per square foot to bring a building up to the standards that, say, IL has done in our building, Casa Remon. The asking price for the building we viewed with the group was $350,000--or about $60 per square foot. So you'd be spending the same again to restore the building to pristine condition.

Glory Days Long Gone…But Soon to Return

Walking through the building, you could see shadows of its glory days.

The ostentatious stairway, for example, leading to the second floor. Our group debated whether this was something to be preserved when rehabbing the building…or, would it make more sense to save the wooden banister and incorporate it into a stairway that took up less space? Everyone agreed that the ornate woodwork adorning the arches over the interior doorways definitely had to be saved, but that the walls they decorated could go to make way for a design reflecting modern lifestyles.

In more prosperous cities, without restrictive rent controls, for example, historic colonial neighborhoods like Casco Viejo thrived during the decades that this neighborhood was abandoned. It's as if this old neighborhood was stuffed into a time capsule.

Other colonial cities with gorgeous old buildings like the ones you can find in Casco Viejo have been "modernized" over the years. Classic mansions have been turned into supermarkets, appliance stores, car dealerships, or Laundromats. The colonial facades with their understated beauty have been replaced with whatever hellish fashion was in vogue during the 50's, 60's, 70's, or 80's. Casco Viejo, on the other hand, hasn't suffered the rape of progress… just the burden of decay.

As it was abandoned, no historic buildings were torn down to make space for gas stations or high-rises. Abandoned for a half-century and left to rot, of course Casco Viejo has problems. Parking is scarce. As is decent hotel space. There isn't any. Anyone doing retail here now is an urban pioneer. It can be rough. But this place has a brilliant future ahead of it.

Casco Viejo is unique. With a little imagination, you can see the potential for this neighborhood to become something like the French Quarter in New Orleans (pre-Katrina).

To put the opportunity of Casco Viejo into perspective, remember that Panama is a strategically important center for shipping, trade, and commerce. Until scientists figure out how to tele-transport giant shipping containers over wireless Internet connections, Panama is going to remain at the center of East/West trade.

And I have trouble imagining how Panama City's most interesting and historic neighborhood, Casco Viejo, doesn't continue to evolve into the country's hip hotspot.

Opportunity Doesn't Knock Twice

Lief has an interesting perspective on the area. A few years ago, he proposed buying a large building that used to be a newspaper office. It has a spectacular view of the Bay of Panama…and its own parking. But Lief couldn't find partners to take on what seemed like an ambitious project at the time. When we drove past the now fully rehabbed building with "For Sale" signs on the condo units, I couldn't help but wonder how much longer these kinds of opportunities might last.

The attendees on the tour asked intelligent questions, and everyone seemed to get a lot out of the experience. I overheard some folks day-dreaming aloud about what they would do with this stately colonial. From the balcony, you see children playing in the streets, men working on dilapidated cars, and women gossiping on the steps with their babies on their laps.

It's not much of a stretch to imagine a day when the neighborhood becomes the Panama City equivalent of Washington, D.C.'s, Georgetown. The president's home is here, as is the French Embassy and Panama's Minister of Tourism, the former salsa star Rueben Blades. Artists and forward-thinking yuppies are moving in, along with expats from around the world.

Exploring the Investment Possibilities

Lief explained the kinds of deals potential buyers might want to consider here and pontificated on the potential the various strategies might provide.

He talked about the pluses and minuses of:

* Short-term vacation rentals

* Long-term residential rentals

* Commercial property

… in this historic neighborhood. Then we all loaded back into the bus and went on to our second stop, the headquarters of Empresas Bern, one of the leading developers in Panama City.

Chairs had been set up for us in the lobby. We were surrounded by models of commercial and residential high-rises currently under construction around the city.

Lief explained the intricacies of pre-construction opportunities. He detailed the concerns that a potential buyer should consider, both long- and short-term. Then he gave us his opinion on the future of the market for these types of construction.

For 30 minutes or so, Lief fielded a stream of questions related to specific projects and general concerns, like plans to clean up the water in the bay, to develop waterfront tourism projects, and to provide a new water treatment system for the city.

Lief addressed exit strategy. Who would you sell to in the future if you weren't interested in owning for the long run? He gave his take on the prospects for resale to other buyers and selling to expats, and he shared his opinion on prospects for future growth in the local market.

Reselling Property in Panama City

The last leg of the excursion took us to a resale apartment in an older apartment building. Lief wanted us to see how older apartments compare with the new ones and how to calculate comparative values for these properties.

There's apparently a lively business in resales, as Empresas Bern has a division of their operation to facilitate such sales.

When we were done, Lief went back to his room to collapse and get some much-needed rest before his next appointment later in the evening. Some of the participants made arrangements to do more in-depth explorations on their own.

Others on our staff had to prepare for the last meeting of this trip to Panama. Leading local businesses focused on tourism and real estate were invited to a brief cocktail hour to kick off a new effort International Living is organizing called "Club Panama."

Although this program is not yet ready to be announced to the public, the businessmen and -women gathered for the meeting were excited about our new plan to promote more tourism and investment in this country and were enthusiastic about jumping on the bandwagon to offer discounts and incentives through International Living to promote Panama as a destination for IL readers.

Putting Your Investment in the "Path of Progress"

One topic Lief returned to again and again during the Forum, that I want to share with you here now, was the strategy of investing in real estate that is directly in the path of progress. For example, buying where a new airport is being built, roads are being constructed, or major developments or improvements (for example, a golf course) are planned. When you invest in the path of progress, you greatly increase your prospects for success.

Panama appears to be making a lot of progress. The economy is getting back on track. The government is encouraging tourist infrastructure with generous tax incentives.

And because of the importance of the Panama Canal in international trade, it's difficult to foresee a situation that would seriously threaten the economic future of this county--the hub of the Americas.

An Information-packed Learning Experience!

The Forum has ended. The tours are finished. Some attendees wisely booked a few extra days in Panama so they could enjoy the pleasures of this beautiful country.

Everyone comes to an event like this for his or her own reasons. Everyone, though, came excited to learn about this strategy that can enrich lives not only financially, but in many other ways as well. Some came with an interest in Europe, others for Latin American opportunities only. A few were interested in doing developments of their own… and others were simply looking for the best profit opportunities on offer right now, regardless of location.

A few readers came to the event specifically to buy real estate from some of our exhibitors. Some deals were inked on the spot. Most developers in the exhibit hall offered attendees special discounts during the Forum. But, more typically, attendees learned so much that they needed to go home and let it all soak in for while before making decisions about their future plans.

Yes, the forum is over, but in some ways the adventure has only begun.

That's because for many attendees the groundwork for building a fortune in international real estate will be laid… and the profits will be realized in the months and years ahead.

Unfortunately, unless you were one of the 75 attendees with us in Panama this week, you missed out. That's too bad. Opportunities like these don't wait for you.

But that doesn't mean you have to miss out entirely.

This is Your Final Insider's Peek at This Unique Event

My name is Thom Hickling. For the past week, I've been your inside reporter for these special International Real Estate Forums in Washington, D.C. and (with Brandon Clogston) Panama City. I've tried to put you in the room with those of us convened in these important meetings.

However, it's been impossible for me tell you everything that's taken place here at the Miramar Intercontinental Hotel and on the real estate field trips we've taken with Lief. Indeed, nothing replaces the experience of being here with the group.

Lief Simon Shows You…
"How to Be a Global Real Estate Investor"

But if my reports of what this group of International Living readers has experienced together this past week have inspired you (as I hope they have), then I have good news.

Lief has published a comprehensive home-study course that teaches you how to become an international real estate investor. He shows you how to get your share of the profits that are on the table worldwide right now.

How To Be A Global Real Estate Investor reveals Lief's investing strategies and insights. It shows you how to find the best real estate--just like Lief does, for himself, his partners, and his readers.

With nearly 400 pages, this is a complete course that teaches you--step-by-step--how to build a profitable international real estate portfolio. It covers EVERYTHING!

* Why International Real Estate is the most exciting and profitable investment you can make today

* How to tell if you have what it takes to be a global real estate investor

* How to evaluate for yourself what kind of property will suit you best and make the most sense for your age, investment style, risk tolerance, financial situation and personal goals

* How to calculate risks and rewards overseas

* How to structure your purchase

* Four ways to finance your overseas purchase

* How to determine the best real estate options for you

* How to manage and even how to furnish your overseas properties

* How to become a land developer

* You learn the marketplace specifics in 18 different countries that Lief has identified as Lands of Great Opportunity right now (the principles are applicable everywhere--but these are Lief's Top Picks)

* How to collect a range of short-term rental properties

* How to harness your 401-K to cash in on overseas real estate opportunities

* You'll learn about building overseas, title insurance, tax issues and advantages, foreign corporate structures, and much more…

This is no ordinary book or manual. In fact, there is no other publication in the world like it. It will never make the New York Times Bestseller list. This is specialized information for a unique group of forward-thinking investors.

Because many years of research and hundreds of thousands of miles of investigative travel have gone into this one-of-a-kind publication, it's not cheap. This is the kind of research that large public companies, investment firms, and the richest families in the world would pay thousands to get their hands on. But because Lief doesn't work for a huge corporation or some billionaire fat-cat investor
--but for a small group of like-minded individuals--this report will not sell for thousands. Instead, it's reasonably priced at only $395. Quite a value when you consider that this information is not available to individual investors anywhere else… at any price. It's unique.

And that is what makes it valuable. How To Be A Global Real Estate Investor gives its readers an edge over other investors. The only people who have ever had access to this kind of information before are Fortune 500 companies, the largest multinational corporations, the world's wealthiest family dynasties… and subscribers to Global Real Estate Investor.

Oh, and those who attended the meetings with Lief these past several days in D.C. and Panama City.

A "Mind-Bending" Opportunity For You to Have it All…

During these International Real Estate Forums, Lief is making a special offer for those of you unable to hop a plane to attend these important meetings.

It is, in fact, a once-in-a-lifetime opportunity. Lief is offering (and this is the last day of the offer) the chance for you to own How To Be A Global Real Estate Investor for a very special price.

All the information…all the secret tactics… all the unique strategies… all the hard-earned experience…and all the ways to make international property the driving force in your investment portfolio…will be delivered to your door right away--if you take advantage of this International Real Estate Forum special offer now.

This is a comprehensive home-study course giving you everything you need to get started in global real estate. It's almost like being behind closed doors at the Intercontinental for the Forum this week… well… minus the cocktail hours, chats over coffee, and face-to-face meetings with experts, developers, and international investors.

THIS IS YOUR LAST CHANCE:

Get "How To Become A Global Real Estate Investor"
Delivered To Your Home And Save Up To 48%!

To make it even easier for you to decide to give this a try, here's the deal: If you order your copy of How To Become A Global Real Estate Investor on this last day of this special conference offer… you'll save $70 off the regular price of $349.

The exclusive strategies, insights, and secrets developed over 25 years are useful, concrete, and actionable. This is advice from hard-won wisdom…the kind you get only by taking the chances and making the mistakes. Which Lief and his team have done for decades now. All their collective experience has been compiled into this single practical guide to real estate investing overseas.

But Wait… There's MORE!

Lief has authorized me to sweeten this deal for you, to make it absolutely irresistible.

If you order now, again, on the last day of the special conference promotion, Lief is willing to also give you a FREE 3-month trial subscription to his one-of-a-kind publication, Global Real Estate Investor. This private service isn't for everyone…and it isn't cheap either. It can't be. Lief and his team travel hundreds of thousands of miles a year looking for the best real estate deals in the world. They do legal checks and serious research that is simply unavailable anywhere else in the world. And Lief's strategies work!

Every issue of Global Real Estate Investor contains priceless profit insights… and specific actionable advice that you can put to use right away. This three-month trial subscription sells for $185. That's practically nothing considering the valuable insights you'll learn.

If you don't at least give it a try, you could miss out on the real estate opportunities of your lifetime.

If you decide to go for it, you risk nothing. This offer is backed by our standard 100% money-back guarantee. If you are not completely blown away by the information that you receive, simply cancel within three months of the trial membership, and you will receive a full refund. No questions asked.

If you are impressed by what you are learning--and we are confident that you will be--then do nothing, and we'll continue your subscription to Global Real Estate Investor. That way you won't miss even one opportunity. In the coming issues, Lief will be showing you the deals that he's recently uncovered in Croatia, Argentina… and all over the world.

This offer ends midnight tonight. And it won't be repeated again… so I urge you to act now. You won't be able to gain access to Lief's insights (and those of his team of experts) for such a low price again. We're never made this power-packed offer before…and we have no plans to make it again.

You Have Nothing to Lose… and the World to Gain

How To Become Global Real Estate Investor is a comprehensive, nearly 400-page guide providing you a clear-cut roadmap to investing in real estate overseas. It's organized similarly to the conference we've held in Panama City this week. It starts with the basics, then works its way logically to the most advanced strategies.

Because the package is yours to keep, you can review and refer to it as often as you like and anywhere and anytime you want to. You need only to take this simple step toward turning your dreams of international real estate investing into a profitable reality.

This comprehensive package provides you with a complete understanding of international real estate investing. You learn the strategies, the tricks, and the techniques that can make this so incredibly profitable… and interesting and fun, too. How many investments can enrich your life like this?

You'll learn how to structure your purchase, manage your property, and save on your taxes, too. What's more, with the free subscription to Global Real Estate Investor, you have the perfect complement to your home-study course.

Your subscription provides you with your own personal scout to find you the best possible deals to take advantage of right now. It allows you to be an armchair investor if you want. Or…you can travel and explore some of these opportunities yourself. But you will never have to do the deep research all over the world, the heavy lifting of research, travel, and pounding the pavement looking at deals that just won't make the grade.

This package makes it simple. Learn about the opportunities and how you can profit in the home-study course, then have access to the best deals in the world in Lief's regular reports… and decide where and when you want to invest. Then if you like, travel and explore the most exciting and profitable deals firsthand.

Catch the Wave of the Great Global Land Rush

There are now more than 300,000 daily readers of our IL Postcards. Not all these readers, we realize, are interested in these kinds of opportunities. But if you've read this far, you are. You're ready to take a first step. Here's your chance. Packaged. Easy. Cheaper than it ever will be again.

Let me repeat myself, one last time: This is your last opportunity to get both Lief's home-study course How To Become A Global Real Estate Investor packaged with a FREE trial subscription to Global Real Estate Investor. It's a combined value of $534!. And, right now, through midnight tonight only, you can have it all for just $279. And that comes with our money-back guarantee.

Don't Miss Out on Deals That Could Reinvent Your Future!

Learn how to pick markets that could more than double in just one year--as Lief did recently with a $60,000 investment in Romanian real estate that swelled to $110,000.

Learn where and how to get in early before prices pop. That's what some of Lief's readers have done--the ones who invested in the Santa Rosa resort on Nicaragua's gorgeous Pacific coast saw their lots appreciate 50% in just two weeks!

Learn how to take full advantage of local markets just 16 months--like Lief did with the apartments he bought that were going for just $787 per square meter in beautiful Buenos Aires--and were worth $1,400 16 months later!

And learn how to do all this with less up-front money, lower risks, and fewer worries than with any other kind of investment you have ever made.

Take advantage of this International Real Estate Forum special offer now!

Remember, the savings I've detailed here will only last until midnight tonight…when this conference coverage ends, then this special is over, never to be offered again. will then be sold at the full retail price, $349… and without the FREE trial subscription.

How To Be A Global Real Estate Investor will then be sold at the full retail price, $349… and without the FREE trial subscription.

Click Here To Reserve Your Complete Investors Kit Now For Only $279

Sincerely,

Thom Hickling
"Your Forum Insider"

P.S. I want to offer you one further inducement to act right now. This week, we recorded Lief's introductory presentation at the plenary session of this forum. It's called "The Pros and Pitfalls of Global Real Estate Investing." Let me send you a copy of the recording FREE with your order. In it, you'll learn details of Lief's recommendations on where and how to invest $50,000, $200,000, or even $500,000 in overseas real estate right now. Plus learn key insights from his deep real estate investment experience. If you order now, everything you need to get started will be sent immediately to your doorstep as soon as the conference ends. It's all in ourInternational Real Estate Forumspecial offer. The clock is ticking. This is the final day this offer will be made.

Important note: In the interest of full disclosure, we want you to know that International Living has fee agreements in place with agents and developers in Casco Viejo, and receives commissions on real estate sales from Empresas Bern.