Transcription
Hey you guys, welcome back. This Sunday, I have a great, informative interview with Liz Larat. She is with Impresses Burn. Can you hear these birds in the background? Those are the wood rails; they’ve been so active lately. So, um, Liz is going to give the details about this new project that Impresses Burn is developing. It’s called Palama Bonita, and it’s going to be in Playa Bonita, where there’s an existing, uh, Weston Hotel. There’s the Casa Bonita, um, condominium tower.
So I met Liz actually like 5 years ago when I first moved to Panama because I was supposed to buy a Burn condo in Gorgona—no, Gorona—it was the Royal Palm building. But that was when my house didn’t sell in California, and I had to cancel the deal; lost my deposit. But everything worked out okay because, for me, I decided, um, I didn’t want to live full-time at the beach; I needed some cooler climate. So I hope you enjoyed this conversation with her. And for full disclosure, I was given a few nights’ complimentary stay when I was interviewing her and toured the area and learned about the project. So enjoy.
Um, how did you get to land in Panama? What’s your story of ending up in Panama, and how did you end up working with Burn?
Yeah, so I used to run hotels in Australia, actually, and then I came to Panama and, um, met the Burn family. And they obviously have tons of hotels here—like nine hotels—and, um, yeah, the rest is history. Started to work with them out in Coronado, um, we opened the Coronado Bay building for them, and, um, yeah, just the rest is history. I’m still there; they keep building great product, and yep, I’ve still got a job.
Yeah, job security to have.
Yeah. What do you personally love about living in Panama?
Oh God, definitely the climate. Like I love the warm weather. Like whenever I go to cold places, I’m cold, and everything hurts. But I love the weather. I love the people; it’s easygoing. I mean, I come from a very easygoing place, you know, Australia, where I was raised, and, um, so I like that low-key vibe. And really, I love to travel, so I love that Panama is so close to so many places. So I love Panama as much as I love not being here, ’cause I’m always nipping away to different places. I was just over in Italy for a bit, and I went by Istanbul. Oh my God, there’s so many direct flights, so it’s easy to kind of get around.
That’s awesome. Can you tell my subscribers about this new project and where it is going to be?
Yeah, okay. So the closest beach to Panama City is Playa Bonita. Okay, so it’s like 15 minutes from Casco, the old town, um, the government has just started a new bridge alongside the existing bridge, and they’re about to do a metro tunnel under the canal. And then, uh, on the other side of that bridge, about 15 minutes is a beach called Playon. So Playon has got an existing Weston Hotel, and then next to it there’s a a residential tower called Casabonita—that’s actually where I live—and then next to that building, on the private beach, they’re going they’re about to launch the first Marriott-branded Weston Residences in Panama. So generally, it takes about 6 months to pre-sale, 6 months to 12 months to pre-sale, um, and then the building will take about 3 years to build.
Okay. Yeah. What excites you the most about this project?
The fact that I can sit in my pajamas and make calls with just dressed up on top and pajamas on the bottom, uh, from my living room making calls… uh, no, it’s I mean it’s it’s the first Marriott-branded, which is massive, um, in the country. So it’s great because we get a lot of people that are investors that are looking to diversify, people looking to get their some funds out of the US, taking some money out of the stock market. And I think one of the main things why people, one of the main reasons people choose Panama as a destination is they’re looking for a plan B, especially with so much political turmoil. A lot of our clients moving here are coming from the US, and people are looking for a place that they could possibly move to if they need it. Um, so the options with something like this is you can buy into a building where it’s going to have management by by the largest hotel group in Panama, and the rental leads are going to come in through the Marriott Group, which is the largest hotel group in the world, um, and then it can, you know, people can use it part-time or just put it full-time into the rental pool, um, come back and forth. Many people come to Panama, as you know, to escape the snow. So it’s a great opportunity to get out of the winter months and come to Panama for a couple of months and then rent the property out when they’re not here, um, and really, people generally like pure investors are generally looking for that chunk of equity in the buy, trying to buy into something that’s out the gate, you know, so getting out on the ground floor, lower prices, that type of thing.
Yeah. And the fact that it’s located, like you said, at one of the beaches, the closest beach to Panama City. And I’ve been spending time here, and it’s just amazing to see the ships coming to transit the canal and the city lights from the city, but here you feel like you’re away from it all.
Yeah, it’s got a light resort living. Like I love it. Like I love nightlife, I love restaurants, I love to be in the city, but I don’t really want to be like in it, in it. And so I moved into Playa Bonita in Casabonita building about 10 years ago, and I never—I mean, the bridge gets a bit annoying because the traffic gets heavy in the afternoon, but now with the new bridge coming in, that’s going to definitely make it more attractive to live here. But the peace and tranquility of this place is is just incredible, you know.
So from the, um, actual plans that you’ve seen, do you have any favorite aspects about the project in particular? I’ve noticed that it’s going to have, um, a restaurant. Yeah, and tell me, tell me about some other things that the project is going to…
So it’s pretty much going to have everything that you can imagine in a Weston Residences. So restaurants, bars, um, swimming pools, saunas, a fitness center, a wellness center, um, yeah, all the amenities, all the bells and whistles that you can imagine in a Weston Residence—super high-end. Um, the apartments will be fully furnished, so like a lot of our clients are from abroad, and the last thing they want to do is come to Panama and try and work out how to furnish a place. So the apartments will come fully decked out, sort of ready to ready to roll. So there’s obviously a few packages, like design packages, that they’ll have to choose from.
Yeah, that the units will all come standard, high-quality, sort of hotel style, but standard because for people that want to put their apartment in the rental pool, they kind of have to all look the same.
Oh, interesting. Okay. When you think about this project, who is the ideal buyer? You know, who, what’s the profile of someone who would be looking for an investment property like this?
Yeah, I think we could look at like the people that have bought in the existing tower, the the residential tower, Casabonita, and it’s really people from all over the world. I mean, at the moment, definitely a lot of North Americans because there’s so many direct flights from Panama to the US and Canada, and many people are snowbirds; many people do want a plan B place to use part-time, as I mentioned. So definitely Canadians and Americans, but we’re also seeing like a lot more people from Germany moving to Panama, a lot more people from France, um, you know, the reality is countries that are having problems at the moment, we kind of benefit because many people want to get out. So we’re getting a lot of investors from Colombia at the moment; there’s a new left-wing government in power, so a lot of people with money from Colombia are also wanting to invest in other places, um, but I would say the core market is definitely the North American market, um, and also Panamanian, the local market, people that want a beach property. The trend here, as you know, is people love to go to the beach on weekends, so, um, it can be a little bit of a hike to get out to Coronado and Gorona, the the main, sort of, expat community, and the main beach is for for locals on weekends. So this is a close beach to the city; it’s the closest swimmable beach, 15 minutes, and a building with all those amenities, it is like, sort of, a nice weekend away for the local market. So it is mixed, but yeah, there’s people from all over the world.
Yeah. What are some of those amenities?
Okay, so the building itself is going to have its own restaurants and bars and fitness center, wellness center, um, they have to keep everything in standard with a Weston Residences, within a Weston, Marriott—generally all of the hotels are franchises, so you have to follow all of the rules and regulations. If you buy a franchise with the with the Marriott group, you got to follow all the rules and regulations. So, as you know, like it’s the the high-end restaurants and bars and, um, buffets and formal dining, and people will also have access to all of the restaurants and bars of the Weston Hotel next door. Now, the Weston Hotel next door is more of a conference hotel; it’s more for short stays, um, but they have their own buffets; they have an Asian restaurant, like sushi place, um, steak house. So owners will be able to use the restaurants in the existing, um, Marriott Residences, the Weston Residences or the Weston Hotel next door. And there’s also like that private beach club, the Pearl Club, which is the the clubhouse on the ocean, so that will also have restaurants; it has a spa down there, um, a full, fully equipped gym. So owners can pretty much bounce around from the different projects.
So when you were talking about the, um, you know, investor profile of someone who might be interested in this project, who can they expect to be the renter of their condo unit?
Yeah, okay. So the main rental, the main like high season here in Panama in any beach community is definitely North American winter. So when people are wanting to escape the snow, they come to Panama, right? So pretty much December until April is the high season in Panama. The great thing about this particular beach, because it’s so close to the city, you’re also getting tourism, right? So renters that are coming to Panama for tourism. I think we need to keep in mind like Panama’s got the fastest-growing economy in Latin America, and that’s pretty much due to the Panama Canal, right? And we’ve got this huge banking system. Tourism for us hasn’t been the most important way that Panama’s clicking along, right? It’s not one of the main reasons why Panama has the fastest-growing economy in Latin America, but the government, the previous government to the one that’s in power now, they started some huge infrastructure projects that are actually going to, they say, are going to triple tourism numbers in Panama. I mean, you’ve got that cruise ship terminal that’s just opened up; it’s now the start and end port for some of the major cruise liners in the world. I mean, that’s got capacity for like 10,000 people. The conference center just opened up; that’s got capacity for 20,000 people. And with that new bridge that I mentioned and the the metro line, the Playa Bonita area is going to appreciate no matter what, and that’s also going to make it easier for people to to stay in this area, um, people before the end of before and after their cruise are likely to come and stay over in the Playa Bonita area. So tourism is is on the rise in Panama, um, and I mean definitely across the street from Panama Pacific, um, from Playa Bonita is Panama Pacifico. So Panama’s got those three special trade free zones where multinational companies don’t have to pay taxes. One of them is in Costa del Este, not far from the airport; the other one is just across the street from Playon, which is called Panama Pacifico. Now Panama Pacifico has got a ton of multinational company offices. Dell have got a huge call center over there, um, and that’s where, um, you’ve got also a lot of families living; you’ve got tons of amenities. So, uh, we’re finding in the existing Casabonita building that a lot of the renters are actually executives from these multinational companies. What I love about investment projects in Panama is trying to set yourself up in an area where you’re not just relying on one type of renter. Like I know in 2008 in Costa Rica, when the market crashed in the US, investors that had bought rental properties in Costa Rica, pretty things pretty much tanked because the Americans weren’t traveling. Great thing about Panama is you’re not relying on just just one income stream, one type of renter; you’re relying on executives for multinational companies; yes, tourism is on the rise, but executives from multinational companies tend to be year-round, um, Panama also does a lot of stem cell treatments; there’s a couple of stem cell, uh, places, and people like to recover in Playa Bonita rather than in the city, so that tends to be like a lot of renters that do, sort of, week, one week, two-week rents, um, up to monthly rentals. So it is a real mix, but definitely like the high season is sort of November, November, December until April.
Yeah. Are you seeing any, um, optics in medical tourism in Panama?
Definitely, really, yeah, yeah, because it’s so tough, especially like a lot of Canadians, uh, the wait, wait time is so long. A lot of people come down to Panama to get radiography, like scans, um, to get knee replacements, definitely to get plastic surgery, the bums and the boobs and that type of thing, um, but yeah, I mean, Panama’s got incredible medical, um, you know, we got two John Hopkins affiliated hospitals; we’ve got a Mayo Clinic affiliation down here, um, it’s fairly inexpensive compared to the the private system up in in North America. So we are seeing like a lot of medical tourism. This would be a perfect place to recuperate.
Oh yeah, I know you might never want to leave.
Yeah, exactly, exactly. Um, so when you talk about the location, can you talk a little bit about Howard because when I drove through, yeah, Panama Pacifico, I and I’m not too familiar with, you know, the history of Howard, but it was an Air Force Base, obviously.
Yeah, when the US were here, um, Panama Pacifico was the old Howard, and Panama Pacifico, which is literally a two-minute drive from Playon, to like literally across the street, it’s got the largest airstrip in Latin America; that’s actually where the US were testing space shuttles when they were here, um, but now it’s been converted into actually the largest single-owned development by one owner, which is called London and Regional in in Panama, and they built, um, they’re mainly doing townhouses, small condos; it’s heavily, um, targeted towards families; there’s a ton of international schools in there, Alan France, the French school, who’ve got a massive school, uh, there’s lots of families. And what that means for Playa Bonita is the more families and executives from multinationals that move into Panama Pacifico, the more amenities there are for us living in Playon. Literally, if you need to do your grocery shopping or go to the hardware store or to go to the medical center or mailboxes, you don’t need to go across to the city; literally everything’s just across the street. So I find it, you know, I’ve been living in Playa Bonita for the last 10 years and raised my kids here, and I find it very, uh, convenient. And now with the new bridge going in and the metro line, more and more goods and services are starting to open, uh, literally in the last month they’ve opened up a Starbucks, um, and I mean, Starbucks, as we know, it’s kind of like a real estate company; they open up where there’s demand. So Starbucks has opened the main, um, wine store, Philippe Mor has just opened up, and and yeah, so it’s it’s an easy place to live because we have tons of amenities.
Yeah, what I liked about, um, exploring this area is that it feels very much like a suburb. Like I get stressed out when I drive in the city; it’s just like, I just get stressed, but here there’s plenty of parking; there’s paved sidewalks, you know, it it feels more comfortable and a lot less stressful.
Yeah, yeah, it’s true. I mean, as we know, Panama City, downtown Panama City, there was no pre-planning; it was just like a vomit of buildings, right? A lot of the streets don’t have sidewalks, um, a lot of the electric cables are not underground, but Panama Pacifico is a pre-planned community, and definitely Playa Bonita is a pre-planned community. So yeah, you don’t have the hassle of potholes and flooding and, you know, all that jazz.
Yes, it’s like you, you know, it’s, um, it’s a little bit of an obstacle course when you’re in the city driving or walking.
What are some new by attractions? Let’s say someone’s here on, you know, for a month; what can they see and do from here that’s within an hour’s drive?
Okay, so actually in the beach, at the beach of Playa Bonita, there’s stand-up paddleboard, there’s kayaking; there’s a bay further over called Veracruz where there’s some great like local beachfront bars and restaurants. If you want to eat like the fresh fried fish and the picaderas and the local ceviche, um, that’s a a super fun place to go. And I mean, we’re so close to the city, so you’ve got the Old Town, Casco Viejo, which is like it feels kind of like Havana, feels like Cartagena, the old colonial buildings, amazing nightlife, amazing gastronomy, like the restaurants in Panama, and new ones keep popping up. Let’s not talk about it, or I’m going to get hungry, but, um, new ones keep popping up all the time. And people come to Panama also because they want to see the Panama Canal, um, and so there’s a visitor center, um, you can have like a really long, um, boring day if you want to go across the whole canal. I did it once; oh, it was a long day, but you can, there’s tons of locks, I think 11 or 12 locks, um, so it’s a it’s quite the the hike, but a lot of people love to do that. And I mean, you’re only an hour from El Valle, right, which is where you live, your hour—no, about an hour and a half from El Valle.
Yeah, it’s yeah, yeah, yeah, about an hour and a half from El Valle, but there’s great hiking up in that area, um, there’s the beach communities of Coronado and Gorona and San Carlos and…
…and Chame. You’ve got kite surfing for people into that, um, and you know, from the city it’s a quick flight up to David if for people that want to check out the Boquete area, which is the main mountain community up near the Costa Rica border, um, but I mean a great weekend trip or a great day getaway, you can jump on a ferry from the Amador Causeway and pop over to Taboga Island, which is literally a 45-minute ferry ride, and there you’ve got white sand beach that the the local vibe, just beautiful. You’ve got the Pearl Islands if you want to jump over there; you’ve got the San Blas Islands on the other coast, on the Caribbean. So I mean, Playa Bonita is close to the city and is close to exploring Panama. The country is super small; I mean, you can drive from the Pacific to the Caribbean in an hour from downtown Panama City, um, so the country itself is small, so it’s really easy to have the city or Playa Bonita as a base and then go away for a couple of day trips or, you know…
…so getting over to the Caribbean side, like ’cause I love, um, Portobelo, I like snorkeling, and how far is that about from Playa Bonita?
So from Playa Bonita, literally to get over to the Caribbean coast, it’s about an hour to Colón, and then from Colón to Portobelo another another 45 minutes. You have to go through Sabanas; there’s always traffic in Sabanas; there’s always a little bit of a bottleneck.
True. So what about, uh, someone who’s not necessarily interested in residency, and can a non-resident purchase property in Panama? What would that look like as far as, you know, the percentage down and how that’s structured?
Okay, so the great thing about buying real estate in Panama is you have the same rights as a local; you don’t have to be a resident to be able to buy real estate in Panama, right? You can stay in Panama for 6 months at a time legally anyway. I’ve got tons of clients and friends that don’t bother with residency, they just because they’re never going to be here more than 6 months at a time. You can only drive for 3 months at a time on your license, but you can actually be here for 6 months at a time, um, so if you’re not doing the the Fast Track residency with 300,000, the normal payment plan is generally is 30 or 40% down in construction. So as the building’s going up, you’re putting down milestone, milestone payments. So generally it’s 10 or 15% down at the signing of the contract, and then in 12 months another 10%, in 24 months another 10%, and, um, and 36 months that the final amount to complete, 30 or 40% down.
Yeah, there is another residency though that I think we could also mention, and that’s the Friendly Nations Visa. So our North American clients, there’s a list of countries that are a part of the Friendly Nations, um, part of the Friendly Nations group where the government will give you residency with a $200,000 investment, but you do have to keep in mind with that particular visa, the project has to be completed; you can’t do that for preconstruction, and the 200,000 has to be already in Panama.
Yeah, that’d be perfect for the units that are available in this building.
Exactly, yeah, exactly. Yeah, you mentioned, you know, someone who’s in love with the preconstruction concept. What is attractive about preconstruction? Why is it something that people consider doing it?
It’s the flexibility of the timing. So many, many, I know many of my clients are waiting to sell their primary property in the US or waiting to sell another property where they’re from, and so it just gives you time. I mean, something like the Weston Residences, you’re going to have around, um, you’ll have around 4 years till until the building’s finished, right? So it’ll take about like I said, 6 months to a year to pre-sell and then 3 months to build. So it just gives flexibility, um, sorry, three years to build. Three months, imagine that. Um, yeah, in Panama, I know I need another coffee. Um, yeah, so it so it just gives flexibility, so, um, you only have to put down that 30 or 40% in construction, and then when the building’s done, there’s also the option of doing local, um, financing with a local bank. We’ve got a a really close relationship with a a mortgage broker, uh, company here in Panama, um, that help us get longer-term loans for clients, but for people that don’t need a long-term loan, there’s also developer financing. Now, the great thing about developer financing, it’s not really financing; it’s more like a rent-to-buy. So you can put down your 30, 40%, and then when the building’s done, the developer can give you the key and you can start renting the unit out, right? And then you pay the monthly interest payments because no one’s paid the developer off, right? So it’s kind of like rent-to-buy, so you pay monthly rent, interest and rent the property out, hopefully have the rent cover your interest payment, um, in an ideal situation, um, and that will also depend on how much deposit you’ve put down, and then you do small principal payments each year, and you got 5 years to do this, and then at the end of the 5-year period, um, it’s just a balloon payment, and you pay it off. So something like the Weston Residences, you’ve really got nine, like eight and a half years to come up with that final payment ’cause you’ve got the few years during construction where you put down those milestone payments, and then you’ve got 5 years of, well, 3 to 5 years of developer financing, um, the great thing about developer financing is there’s no prepayment penalty; you can pay it off at any time, and there’s also no pre-approval process. So you don’t have to worry about your credit score; you don’t have to worry about your tax returns if you’re already retired and you’re not getting, um, you’re not working to get the income; you don’t have to worry because the developer has your down payment, obviously, and the deed is transferred once the apartment’s been paid off in full.
Yeah, so it’s a really easy process, but if you need longer terms, there’s always the option of doing local financing. One thing I learned recently though was, um, with mortgages in Panama, the the rates are always adjustable; there’s no fixed rate.
Yeah, yeah, that’s right; that’s right. I mean, if you had asked me probably 6 months ago about doing local financing, I would have just for a foreigner, I would have just gone steer clear, right? But I we we’re working now closely with, um, this mortgage broker company that is actually getting us results. I mean, we’ve had about 12 approved in the last sort of, um, in the last month, um, and that’s been for my clients that are of all different ages, all different walks of life, all different income streams, um, so, but you do have to keep in mind that the interest rates here in Panama are higher; like local banks are charging it about about 7 to 8%.
Yeah, yeah, the, um, so this preconstruction actually does sound like a really good, um, option for someone who, let’s say they have a house in the states, why, and they did want to get in on that, you know, kind of the opportunity cost, you know, to get in on preconstruction, but then it gives them time flexibility to sell their house or not, right? They might decide that they want to, you know, keep this investment just as investment purposes, or they can sell their house because they’ve been making trips to Panama and then decide how much they love it and want to move here.
So that’s right. And we’re also seeing a lot of people take a line of credit out on their properties up north, wanting to keep the property, take a line of credit out and use that to buy property in Panama. And often the interest rates are slightly lower than what they are in Panama in the US at the moment.
Yeah, usually about 2 points less.
Yeah. Um, one question I’ve always had because I also was supposed to buy in Royal Palm, but again, that financing didn’t come through that I had. So in a newer building, um, what happens usually a condo has to build up reserves, right? Or anything that has to be repaired for, you know, a big structural, uh, how does that work in a new building when they don’t have the reserves?
Okay, so the great thing, some of the real estate laws here in Panama really do protect the the end-user. Um, developers have to pay for any unsold and undelivered, um, inventory, um, pretty much from from once the building gets its occupancy permit. So the developer has to actually pay. So, for example, in the the existing Casabonita, the building where I live, the developer still is is paying $250 a month for any unsold inventory, right? From the moment that the building gets its occupancy permit. So that’s a way to build up the reserve fund for the building, right? Um, also there’s a one-off fee that all owners pay when they take possession of their unit, um, generally it’s like I know in the Playon building it’s it was $500, like one-off setup fee for the administration of the building, sorry, $400, and that was to pretty much go towards setting up the social areas and the common areas. So, and I know that like Burn as a company, they don’t they don’t promote super low maintenance fees just to get people to buy because that’s bad business. I mean, these guys have been in the business for over 45 years, right? If you start doing that, you’re really going to pee people off. I mean, the building that I mentioned that I first opened for for Burn and, um, Coronado Bay, when I was when I opened that building, it was at 150 a month, right? And now the maintenance fee is still under 200 a month, and that that’s like…
15 years. 15 years on. So they don't kind of put a low; they know how much it costs to run a building, right? And to also make sure that you've got an ample reserve.
Yeah, Liz, you've been an incredible source of information. I'm really impressed with how much you know. Your knowledge base is so extensive, from, you know, just the local area, the infrastructure projects, financing, you know, preconstruction deals in general. Impresses. Burn.
Specific thank you so much for your time. And do you have any final thoughts you want to leave with my subscribers?
Um, well, I have to say it's wonderful to see you again. It's been a while. It's it's my absolute pleasure. And you know, I just love that your um—it's French, I'm not even going to say it—but I love your joy in life, and I love the fact that you've you've done this, and and you're real. And I think it's great that your subscribers are are following you, and you you bring in a a very real perspective. And I I think it's amazing. So thanks for inviting me to to do this with you.
I hope you guys found that information helpful, and information on the Pama Bonita project in particular. If you're interested, I wrote a 20-page preconstruction in Panama guide to kind of give you the rundown on what to expect, how to evaluate a developer, what kind of questions to ask, how to mitigate risk, and structures of the deal. Um, it's really important to be informed, and you can download that from the link in the video description box. Also in that guide that I wrote, you can find the brochure for Pama Bonita, the new project.
Thank you so much for watching. And if you're interested, you can email me about the project, and that email is also in the video description. I'll see you next week.