Introduction
[Richard Bexon] Good afternoon, Mark. How you doing?
[Mark Savoia] Good, Richard. How are you, my friend?
[Richard Bexon] Good. A pleasure to have you on the podcast, sir, as always.
[Mark Savoia] Thank you. I appreciate it.
Market Overview: Global Capital Movement
[Richard Bexon] Not at all, not at all. Well, Mark, the first question I love to ask everyone is, you know, I think there’s been some volatility and that’s probably here to stay in Western markets recently. I mean, what are you seeing happening here in Costa Rica over the past say like two or three months.
[Mark Savoia] Two or three months. I’m going to see an influx of people. So we have a lot of Middle Eastern from Abu Dhabi, Dubai. We have a lot of Americans that are moving here because of the uncertainty with the US what’s happening with Trump coming into power. There’s a lot of people that aren’t too certain that, you know, with all the deficit that’s happened in democracy, that their money is going to be safe. Now, knowing that they’re bringing their money into Costa Rica, their money is protected because they are private identities. Right. So there’s a mass influx of people moving their wealth into Costa Rica, which is a good thing. And I always tell people, you know, when following guidelines, it’s almost like a shark in the water. The shark has bottom feeders on the bottom and those sharks are, those bottom feeders are always protected because the shark is the main player.
[Richard Bexon] Yeah.
Banking System: Chinese and International Influence
[Mark Savoia] Now we know in Costa Rica we have Russia, Dubai and China. China. Their, their wealth is all held here in Costa Rica and it’s held in US currency. The biggest bank in Costa Rica is the bank of Hong Kong. You have to be a Chinese descent to be part of that bank. Right. So I always tell people when they ask, you know, why and what do we do and why Costa Rica? I say, just like a shark with the bottom feeder, if the bottom feeder is continuously cleaning the shark, there is no predator that’s going to be stronger than the shark that’s going to protect the bottom feeder. So I go, we have to look at it as ourselves, as us being the ones underneath the shark, cleaning the shark. So when you follow the big guys with their cash, you know that we’re going to be safe because they’re not about to lose their wealth.
[Richard Bexon] That’s the first time, I think I’ve heard that in my whole 20 years here, Mark. That The Hong Kong bank is the biggest bank here in Costa Rica. The biggest holder of US dollars.
[Mark Savoia] It is. Wow, the biggest bank.
[Richard Bexon] How do you know that, if you don’t mind me asking, Mark?
Hong Kong Banking Presence
[Mark Savoia] So in the last four years I’ve helped move over $1.2 billion of people’s actual funds into the banking system in Costa Rica. And a few of my clients were of Chinese descent. Now when introducing to the banking system, it was one of the bigger banks that introduced my client to the bank of Hong Kong and China in Costa Rica. And because they’re of Chinese descent, they don’t have to really disclose where their funds are coming from. Like for Canadians we have to provide six months bank statements, pretty much anyone does for the banking system, right. To legitify the funds and make sure it’s not laundered or trafficking where their bank. If you’re of Chinese descent, you don’t have to disclose where the origins of the funds coming from. They don’t pay importing taxes, transfer taxes, so they get a lot of benefits. Because it’s the Chinese in Costa Rica that built the roads, they built the stadiums, they provided all the police with their cars. Right? And the importing and the exporting at the dock in Lake Le Monde and all that, it’s all taken care of by them. So it makes special privileges that they get, right. For coming into Costa Rica.
[Richard Bexon] If I make, you know, there’s a lot of anti Asian rhetoric I would say in the world at the moment, especially in the U.S. so if I’m a U.S. investor at the moment, that has me somewhat alarmed, should I be.
Banking Advantages
[Mark Savoia] No, no, no, no. I have a lot of investors from the U.S. i actually have multi millionaires and billionaires that are now liquefying their assets in the US and Canada, throughout Europe and they’re moving their funds purposely into Costa Rica. So I joined forces with a law firm. The law firm is Lexicore. And what they do is they have an off. They have two offices opening up in Abu Dhabi and Dubai. Now the Middle Eastern only like to deal with the Middle Eastern, right? But if you have an affiliations, they will use you as like a channel to allow them to liquefy their assets and diversify their assets in other parts of the world. So they’re now bringing all their funds. If you start noticing in Lake Santa Teresa area such as that, there’s a lot of Middle Eastern that are influencing the area because they find that when they bring their money into Costa Rica, their money in Costa Rica is safe. It’s like the Banks of Costa Rica, if you don’t like one bank, you can request your money in cash within 48 hours or they have to transfer all your funds to a bank of your choice or give you cash. They cannot refuse you your funds within, after, within 48 hours if you want to remove the money from that bank. So the money in Costa Rica is protector, it’s not owned by the Rochesters, the Rockefellers. Right. There’s still separate identities which a lot of people are finding with, you know, parts of the us, parts of Europe. Banks are actually going bankrupt. Right. Or they’re telling people, no, you can’t physically have cash, but we’ll give you credit.
[Richard Bexon] Yeah.
[Mark Savoia] So down here, people know cash is still king. And with the banking system here, even though they ask for a lot of fundamental documentation to provide to bring money into the banks because they want to make sure China and Costa Rica have no treaty. Canada and Costa Rica have no treaty, so there’s no extradition. And I know this personally with helping clients. So moving their funds in here is the same thing. Once your assets leave China or your assets leave Canada to come into Costa Rica, it then allows you that your assets and your, your financial status is completely protected. Now, as for Americans, I also have a documentation that will allow you to resign as an American resident, but keep your citizenship. This form here will also allow you to not have to pay any more taxes in the US or disclose anything to the US anymore and will not allow them to go back eight years prior to try to find any infractions on you in order to try to charge you for something. So there’s a lot of loopholes and a lot of people are picking Costa Rica for that reason.
Investment Considerations
[Richard Bexon] What mistakes do you think people make when investing in Costa Rica?
Due Diligence Process
[Mark Savoia] A lot of the times people make mistakes is, you know, if they’re looking like I help a lot of people when it comes to investment for properties, they’ll look and they’ll strictly look at properties online. And there’s a lot of misinformation with websites where they have properties that are three, four, five years old. And we look back before COVID you know, house, that’s 175, $200,000 right now. It could be 6, 7, 800,000 depending on the area. So I tell people, if you’re buying a property solely for, to return on an investment, if you want to flip it, if you want to do a six month, a one year flip and you want to make 150, 250,000 profit, if not more, it all Depends. Like anything else, location, location, location. Majority of expats, when they come to this area, they want to flock towards the beach areas like where I am, Uvita, right, To go Dominical. I always tell people to try to stay at Uvita, not to go past Uvita, to go like, oh child, Tres Rios and Cortez try to stay in this area or they’ll think they’ll go to Hako because Hako’s a little bit cheaper. But I tell people Hako is like Vegas, it’s like the armpit of Costa Rica. Yeah, if you’re going to have fun, that’s the place you go to. So a lot of people will strictly look at price and they won’t look at the area and you know, try to find out how fast things are revolving and turning, what infrastructure is coming into the area, you know, are there big shopping malls, you know, such as what we were talking about, you know, is there infrastructure? There’s houses, the brand new hospitals. So they don’t take that into factor to see what’s coming. And also when investing, a lot of the time it’s not up to the individual who’s investing. The problem is the realtor that they’re using or the investor that they’re using. Down in Costa Rica, if they don’t have the basic knowledge and they don’t know what the outcome is going to be for the next 2, 3 years by working with bigger developers and seeing site plans of what’s to come, then they can’t educate the investor with the proper knowledge. Like, so when I go through an area or house, like a giving example, Manuel Antonio. Now I’ve got homes in Manuel Antonio and I’ve got the numbers to support it. They bring in 40, 60,000 US a week at a 75 to an 85% occupancy rate. So when people look at numbers like that, yes, the houses get up to four or five, six, even $9 million. But when you look at the return on investment, the rate, and they ask me why. So what I do is I show them the demographics in the area. I show them, you know, the schooling close by, their private airports close by, the infrastructure, the type of expats that surround that area, but also is, you know, Manuel Antonio is one of the most populated tourist areas in all of Costa Rica, right. So I tell people you have to educate the buyer. So a lot of the times in the mistake is on the individual that they’re using to help them make that educated guess of where in Costa Rica.
[Richard Bexon] So I mean how do you go about finding someone decent? Because I always said, you know, this country is a sunny place for shady people and there’s no recourse, man. I mean like you can say whatever you want. I mean, you know, you really can. So I mean, yeah, how do you make sure you know that you’re with someone that knows what it is that they’re doing? It’s, this country is full of great people, dude. Like it’s full of amazing people without mal intent.
Relocation Services
[Mark Savoia] Exactly. So I’ll give you an example for myself. So I came down here to retire. I come from a line of builders back at home of over like 50 years, right. We have over 2,000 real estate agents that work for my wife and she goes back and forth for her work in Canada with real estate. But I always tell people is you have to research and ask other people. So when someone wants to know about me, I will give you tonnes and tonnes of references. People you can talk to, you can research, you can google, you can see, right? And you get to know the knowledge. Now we tell people what you want to ask too is you want to make sure whoever you’re using, like when people come to the south part of Costa Rica, don’t ask me over the phone. I don’t like doing emails, I like doing WhatsApp because I like to verbally for you to hear my voice, to hear my expressions or like video call. Now I’ll educate people. Why not to go to oh child. You know, I give them sites like Southern Crime Awareness, right? Oh child. So I educate them. So the more education you get, the more knowledge you get, the better off you’re going to be. But the other main thing is I help relocate people free of charge. I have a seven course video that’s just about to launch out. I have a 45 page free ebook that gives you all the information into depth. But my videos are going to be word to word, specifics for specifics. I have contacts all over the world to help you with your immigration, your process moving, access to private jets, state auctioneers, to get rid of your assets, back wherever you are and to come into Costa Rica. And I have some of the most diversified, best lawyers in Costa Rica that will affiliate and assist people when they’re making a move to Costa Rica. So it’s like a one stop shop and I’m doing that for free. I’m not asking for 2,000, some people, 5,000 and then once people get to an area and I always tell people when you come to an area, you know Ask whoever you’re working with, you know, what groups do they have? Have they formed any groups where expats, you know, are they educated enough, you know, how do they help them above and beyond? Because a lot of people when they’re selling down here, they’ll just sell you something and the minute you come down it’s like what do you want me to do with you? How do you want me to help you now? I don’t, I don’t know. You’re done, I dealt with you, you’re finished. Where for us it’s helping you find your car, relocating you private drivers, private jets, helping you with your banking, which accountants to use, which lawyers to use, getting you affiliated in an expat community so you feel at home. And all those second guessing in the second nature is completely wiped away. But holding their hand from day one, from the minute you call and we help you and I provide you all the documentation what to do at home. Because there’s a lot of people call me, they’re like do we need to have certain vaccines to enter Costa Rica? What documents do I need to come to Costa Rica? Who notarize them, who authenticates them? How do I open a bank account? What does in a corporation do? Does it protect gases? Does it not protect assets? So answering all those questions, so my phone is literally on 24 7. I start at like 4:30 in the morning. Some nights I finish at like 11:00 at night. But I enjoy it, I absolutely enjoy it.
Regional Investment Analysis
[Richard Bexon] Well Mark, you had mentioned there something about mammal antonio and rentability etc. What are the main factors that you think people should consider when investing in a property as a vacation rental? Because a lot of people do that. I mean there are people that are looking to move down here. There are some people that are just like hey, I’m going to have a second home and rent it out when I’m not here. And there are other people that just making hey dude, I’m just going to park some money in a vacation rental here. What are the main factors you think they should consider when doing. When basically investing in a vacation rental? Whether that’s the last one that I said there or the second one where it’s like a house that they use for a couple of weeks a year.
Manuel Antonio and Key Locations
[Mark Savoia] The location is the utmost important safety. But knowing the areas where expats and tourists like to visit, not just high season but also low season. Right. So I’ll give you example. So if they’re in the north part there, you know Papagayo, you know it’s close to the airport. Everybody loves it, Right. It’s very touristy. It’s a lot of the inclusives. When you know, then we have Hako, Hako’s Vegas. So you tell people. But if you go into places like Hako, if you go to places like Santa Teresa, where the houses are expensive and the process prices are astronomical, it’s again, it’s up to the individual that you’re dealing with to make the educated decision for you on which area is going to suit you best. I have some people that like to be in the north part of the country. So I’ll have one of my representatives in the north part take care of them in Papagayo, Coco Pacifico. Right. And I tell them because they want to be close to an airport. Then I have other people when they travel south, you know, I always tell people start in the north. When they come south, they land in Manuel Antonio. They love it. People don’t know that Manuel Antonio is one of the hottest tourist places. 365 days a year, right in the low season, we have a lot of people from Amsterdam, Germany, Italy, Greece. A lot of them will flock to Manuel Antonio because you got the monkeys, you got the sauce, you got the parrots, you have the hot springs, the zip lining. So people love it. People come a little bit further south and you start becoming more domesticated. It’s great for rentals too, but it’s not as hot as Manuel Antonio. But Uvita is the up and coming. So It’s Santa Teresa 15 years ago. Yeah. So really it comes down to educating them on where they want to have their investment and what do they want for a return on their investment. So I can see hotspots, Papagayo, Pacifico in Liberia, Manuel Antonio, Yuvita and Dominica. Remembering too, that the south part of Costa Rica for the Costa Ricans, a lot of people don’t know this. The very wealthy Costa Ricans before COVID they would travel twice a month and they would go to Miami and party and they would easily drop a hundred, $200,000 between a few couples to go and party and have fun. When Covid hit, they figured, why are we doing that? And they started coming towards the south part and they started vacationing in Manuel Antonio, Yuvita and Dominica. So they see that their money stretches a lot further because they’re within their country, but they’re also at one of the places, you know, like 25 of the most beautiful beaches, 1275 waterfalls. Right. The biodiversity that surrounds them in this area so they made this their playground. So, you know, I always ask people, how much do you want to return on investment? You know, how often do you want it to be rented out? And then also it comes also down to is the property manager. Do you have someone’s a super host, do you have someone that has connections without Europe for low season connections here, connections in the U.S. connections in Canada. So trying to educate them and put them with the proper property management company is also another important factor too.
[Richard Bexon] Yeah, I agree. What would you not invest in in Costa Rica, Mark?
What to Avoid
[Mark Savoia] Me personally?
[Richard Bexon] Yeah, I mean like, you know, condominiums.
[Mark Savoia] Yeah, I wouldn’t invest into a condominium here because the HOA fees, the common element fee, that’s for the surrounding property. Because condominiums in Costa Rica aren’t like Canada, the US or Europe where they’re actually regulated and they’re governed. Here it’s just the private institution or third party will come in, they’ll govern it and they’ll, they’ll, you know, take care of the HOAs. But if they’re not legit and running things properly, you can end up losing your money or going to a deficit. And your HOA fees move from 200. And I know properties that are now sitting at 1500, $2,000 a month. So I tell people not to invest in that. Businesses to be very wary when investing into a business. If you’re buying something like a casino or something like that, you’re fine, you can print money. But when they’re buying like little mom and pop shops or they’re buying, you know, a little car dealership, this or that, I always tell them, make sure that you got proper representation with the lawyer to look at all the background, the history, make sure the books haven’t been fudged or played around with. So knowing that always tell people when coming down here a house is one thing. Now a lot of people say to me, I’m going to come down and rent for six months, I’m going to try all the different areas. And I say to them, this is the problem with such an influx of people coming to Costa Rica. Last year, just on visitors alone, Costa Rica brought in almost $4 billion of foreign money money into the country. On people touristing just to Costa Rica. That’s not investing, that’s just tourists coming into Costa Rica. So I tell people, when you sit and you wait and you go into an area and you’re thinking, I’m going to rent here for six months in the north, they’re going to go a little Bit further south and rent here, rent there. By the time that you’re done renting, prices have jumped, like in our area here. Like I was saying before COVID a house has 175, is now 6, $700,000. When we bought ocean view property, I was looking at four different properties four years ago and they’re sitting at like 2, 250,000 for a hectare ocean view in Dominica. Well, those same properties now are sitting at $801.1 million. And they’re selling. Yeah, they’re selling because location is the one thing you can never get back. Right. Once location is gone, it’s gone, it’s done for life. So I just, I personally won’t invest into a business and I want to invest into a condo, but if I were to invest into a business, it would be something like paddle ball or pickleball, something like that. I would invest into that.
[Richard Bexon] Yeah, seems to be great at the moment.
[Mark Savoia] Exactly, exactly.
How Would You Invest $500,000 Inheritance in Costa Rica?
[Richard Bexon] Well, my last question for you then, Mark. I mean, if you inherited $500,000 and you had to invest it into a business or real estate in Costa Rica, what would you invest it in? Why?
[Mark Savoia] I would invest it into either one of two things. Something that’s up and coming and trendy, which again is the pickleball or paddle ball. The two different ones, right, because they’re, they’re popping up everywhere. So it’s that new fad that everybody wants, right? Yeah. And if I were to invest, I would invest not just being prejudiced because I live in Uvita, but I do have multiple properties that we own that are close to the beach. So something that, that get into an entry level home, three bedrooms, two bathroom, but walking distance to like the whale’s tail beach. Something that’s close, accessible, but also keeping in mind that there’s a lot of properties out there that are lightweight construction, pat on grade steel framing, right. Gypsum or concrete board and drywall. Make sure that it’s block construction, you know, that they have the proper infrastructure, rebar, steel, stuff like that, stuff that has longevity, not something that’s not going to fall apart right away. So to get into something like that and I would invest in that because it’s going to be a revolving door just when it comes to rentals, but return on investment with the way Costa Rica is just peaking right now and we haven’t even begun to see what’s coming for Costa Rica yet. It’s, you can’t lose. You can never lose. When you invest into real estate, your money is going to be there. Something hard, physical, you can tandem tangibly touch and feel. It’s always going to have a dollar value to it.
Conclusion
[Richard Bexon] Awesome Mark, Appreciate you taking the time to share your advice and knowledge with the listeners here on the podcast. Anyone that wants to get in contact with you, I’ll include your description down below, but thanks very much.
[Mark Savoia] I appreciate it. Richard, the best man. I wish you all the best and we have to meet very soon. I’m going to come to the north part and see you.
[Richard Bexon] Sounds good man.
[Mark Savoia] See you later. Cheers.
