Cerritos Beach - Tequila Ranch Update September 2008
I recently visited Cabo after a long hiatis. Part of the reason that I haven't visited Cabo as regularly as I had been 6 months ago is due primarily to what we are currently experiencing here in the US credit, mortgage and real estate markets. Our recession, down-turn, whatever you would like to call it has effected a number of things. In general the slowdown here has effected many of the investors who were pouring cash into Mexico. While the damage has been somewhat mitigated by the Europeans and Canadians who, thanks to the strength of their dollar continue to invest, primarily investment dollars were coming from the US and as that has dried up, projects have slowed. As I'm sure many of you are painfully aware people are stuck, doing nothing, hanging back, holding on to their cash - waiting. The effect has resulted in a general slowdown in Cabo and other regions of Mexico. I'm hearing estimates of a 20 - 40% slowdown in real estate sales in Cabo. I'll attempt to address how this slowdown could effect our projects with each individual project below.
That's the bad news. The good news is that Mexico continues to grow. The roads and other infrastructure projects are funded and moving forward. The road appears to still be on track for completion in 2 years. The work continues and progress is apparent. The existing condo project on Cerritos Beach is almost sold out with only a handful of condos still available. The first tower is up and should be open early 2009. It's so exciting to see building activity on Cerritos Beach.
Tequila Ranch
The tequila ranch distillery is coming along and current estimates are that is should be open early 2009. Construction has taken longer than we had originally thought, but there's been much progress - the basic structure is complete. 500 barrels of tequila have been delivered and was in the process of being stored on-site while I was there. I was treated to the experience of how you hand make regular tequila into aged anejo. Each individual barrel (actually red wine barrels) will be hand charred before the tequila will be put into the barrels. The tequila will age a year and one day as specified for anejo. Once again a testimonial to Tony's eye to every detail.
Completion of the Tequila Distillery has always been a key component to our marketing of our fractionals at Tequila Ranch. We know that people buy when they are there - as evidenced by almost all of the condos at Sol Pacifico being sold at the beach club on Cerritos. 150 couples touring the Distillery each week is important to our sales strategy. As such we made the decision to delay the construction of our Villas until the Distillery was closer to completion.
I'm a firm believer that things work out as they were meant to. The market has changed considerably since we began this project over a year ago. We feel strongly that we need to be flexible with our product to ensure we have what people want to buy. This is especially important for fractionals as there are a lot more of them to sell. On my recent trip I sat down with Tony and the architects and tweaked the project plan. As most of you know I have never been satisfied with the site map or the floor plans and had yet to find a solution that I could get on board with. We are working with a new group of architects who are fantastic, get it and are easy to work with. Their offices are right across the hall from Tony's office instead of in La Paz where our former architect has his offices. Here is our current concept which we are aggessively moving forward with. We are building a small mexican villiage within the walls of Tequila Ranch. Current working name of resort is The Village at Tequila Ranch (let me know what you think of the name). We have removed the tennis court, two pools, will reconfigure the site map, none of us liked the layout of the roads. Loral, Will and I had personnally purchased a large beach front lot which we have dedicated to the project as the site for an exclusive Beach Club - complete with Palapa bar and grill, large infinity pool, workout area, and all the amenties you'd want at a private beach club. We believe this exclusive amenity will be and excellent incentive for our prospects to buy. We have taken the sizes of the villas down from our original floor plan of 6000 square feet to a more desireable 2,500 - 3,500 square feet. We will offer monthly shares at a price point that will build sales momentum. We will build more villas, the total amount has yet to be determined, the architects are working on that as we speak. I will be back in Cabo early November and hope to share with you more specifics (site map, floor plans, etc.) at that time.
So I know you are all asking, how does this impact me? First I absolutely believe we are working on a product that will sell in the current market place and that is our first priority. Our goal is to produce the most desireable product for the greatest market value vs have a product that doesn't sell. With fractional sales momentum is key so we need to launch with a product that stimulates sales. While we don't have a definitive answer for you yet, we are talking about such solutions as giving our investors additional monthly shares which will keep them whole. Most of our investors are going to flip their shares before taking title which gives us much more flexibility. I feel fortunate that we are able to be flexible in our offering during a time where markets are so tumultous.
As a result of this synergy of thinking, I am even more excited than ever about our product and project now. I feel confident we are on-track. I am back to my 4 - 6 week visits to keep the project moving forward. So look forward to more frequent updates.
Cerritos Beach - La Amanezca
I have continued to work with Larry Henry, our design architect and the architects on the ground in Cabo to make progress on the condos, hotel, restaurants, spa, conference center, pool, lobby and all the other wonderful structures that make up La Amanezca. On my recent trip we revisited the overall plan and have taken down the size of the hotel to be truly a boutique hotel for prospective buyers. Along with everyone in real estate these days we are responding to the inactivity in the market. I don't have to tell anyone that people are on the sidelines waiting for something to happen. Some are waiting for the election to be over, the buyout to go into effect, the real estate market to bottom out and start its upturn. Money is tight and every location in the world is affected. Luckily for us, Mexico is less affected than most places so once the logjam of money frees up, we will continue to see impressive growth. Don't get me wrong, Mexico is still growing, it's just seen the rate of sales in real estate slow. Our target market has always been US buyers and right now most of our prospects are sidelined. So as we continue to pursue our permits and entitlements, we are trying to time the market and determine the best time to launch La Amanezca. Right now our current target is late spring/summer 2009 if the real estate market in the US has started to recover. We own the land and have funded the architecture and permitting so we are in good shape to move forward once we have entitlements. Stay tuned for my next update in November.
Janet on behalf of Janet, Loral and Will
In the News - Cerritos Beach and Surrounding Area
More news on Cerritos Beach and the Tequila Ranch area. I received this email this morning, these guys are friends of mine from my many trips to Cabo. The are also working with Tony and are offering lots for sale behind Sol Pacifico and our project on Cerritos Beach. Check out their web site, some of those pictures should look familiar.
Well, here we are again another Spring in CaboMX and things are heating up fast and furious on Cerritos Beach so those of you who may be interested in annual cash-on-cash returns approaching 400% had better be quick about jumping on-board as there are not too very many Lots remaining and this could well be your LAST CHANCE to get in on this
Did I just say LAST CHANCE? Yup, and heres why
this current 48-Lot subdivision may very well represent the final batch of Cerritos Beach oceanview Lots to EVER become available for sale as larger parcels of land suitable for subdivision/investment are now next to impossible to secure for any kind of a reasonable price read that as extinct - and bidding wars for what is still available remain in a state of frenzy as values/prices continue to soar at a breakneck pace GREAT NEWS for those who began investing with us way back in 2007 as flip time is quickly approaching
ADDITIONAL INFORMATION at
www.bajacalls.com or CONTACT Lon@bajacalls.com
UPDATE (MAY 2008) - CERRITOS BEACH MEXICO
Humans & Dolphins surfing peacefully together at Cerritos Beach - - - How many dolphins do YOU count?
THE CERRITOS BEACH CLUB IS GOING STRONG
You can hardly find a parking space at the Beach Club on any given weekend, the food is great, the booze is flowing and live entertainment is provided every weekend as things heat up and the immediate area population increases with all the building/development already begun (or immediately pending - read on).
The Equestrian Center is open for horseback riding, there are plenty of ATV rentals available, there's a surf shop right there on the beach and buses run from many of the major hotels in CaboMX out to the Beach Club on a daily basis Cerritos Beach, the only swimmable beach on the entire Pacific Coast
1000-UNIT CERRITOS BEACH RESORT
www.cerritosbeachresorts.comis already advertising their hotel, fractional and whole-ownership opportunities in the airline magazines, generating a greater awareness of the area and with construction expected to begin this summer. There will be PreConstructionOps available shortly, so stay tuned And Roger Pollack - the largest builder in the State of Oregon - and one of the Partners on the Cerritos Beach Resort project is building a huge home on the point overlooking the project itself and construction is well underway and moving fast.
56-UNIT SOL PACIFICO CONDOMINIUMS
www.solpacificocerritos.comOur brand new beachfront neighbor the 56-unit Sol Pacifico Condominium Project - is already under construction and about 2/3rd sold out with initial occupancy projected by late fall And prices ranging from $500k-$1.6M (2/3rd sold out) And some PreSales are still available
This shot is from the rear of the project facing
toward the Pacific Ocean itself
This infinity pool sits directly on the Pacific Ocean between the project (to the right) and the Pacific Ocean (to the left) - And is the largest in the Baja Peninsula
A side view from the infinity pool in the front
(again, the ocean is to the left)
The first floor of the north building facing the ocean (the ocean is behind me)
163-UNIT LA AMANEZCA CONDOMINIUMS
www.laamanezca.comis in the final design phase with all preliminary hurdles satisfied and will break ground later this year
CERRITOS BEACH LOTS
www.bajacalls.com
The Lots we have available for sale are located directly behind Sol Pacifico, a 56-unit Condominium project for which ground was broken in late July 2007 with prices ranging from $495,000+ (1bd) to $695,000+ (2bd) all the way to a high of $1.6M+ (3bd Penthouse) with initial occupancy scheduled in the fall of 2008.
The grand entrance to Sol Pacifico Condominiums is located on Lote 11 (plans for same are underway) directly on Mexico Highway #19 and will lend the impression that our Lots are one with the Sol Pacifico Condominium Project; Lotes 09 and 10 will be utilized as Commercial
If interested in Commercial, please contact us directly @ Lon@bajacalls.comThis e-mail address is being protected from spambots, you need JavaScript enabled to view it ...
There are 4 Residential Parcels (Lotes on Plat) available at this time and each consists of 12 Lots of approximately 7000sf each with prices increasing by $5000/Lot the closer to the ocean the Lot is located:
Parcel/Lote 08
$ 89,950/Lot
Parcel/Lote 07
$ 94,950/Lot
Parcel/Lote 06
$ 99,950/Lot
Parcel/Lote 05
$104,950/Lot
If interested in entire Parcel or Multiple Lot purchases at bulk discounts, please contact us directly @ Lon@bajacalls.comThis e-mail address is being protected from spambots, you need JavaScript enabled to view it ...
Seller-Financing is available on these Lots @ 25% cash down payment (plus $500/Lot Closing Costs) and the balance at 8% Interest-Only with a 5-year balloon there is no PrePayment Penalty at any time
And this Investment lends itself particularly well to Self-Directed Pension Plans
Please do not delay as these Cerritos Beach Lots have appreciated at the rate of a whopping 100%/year+ over the last couple of years, and with the Leverage weve negotiated with the Seller - the annual ROI has been running to 400% cash-on-cash at resale - so any delay on your part could result in increased pricing
OUR INVESTMENT STRATEGY
Simply position ourselves in the path of growth/development and let time do most of the work. As 'savvy' Real Estate Investors, we can no longer rely on the OLD RULE of Location-Location-Location as our sole investment criteria. We must now include Timing-Timing-Timing and Appreciation-Appreciation-Appreciation as meeting these 3 investment criteria virtually assures the attainment of our overall investment goals.
Our Investment Strategy consists of simply following the Big Boy Developers building Oceanfront Resorts and Condos and investing directly behind their projects and directly in the line of growth/development which theyve created positioning ourselves in the path of progress, if you will - taking advantage of the new roads they build, the new utilities they install and the new sales activity they generate, riding along on their coat-tails and watching our investments in Cerritos Beach Lots soar in value as a result of their activities.
While Insider Information may be illegal in the Stock Market, it should be illegal NOT to have Insider Information in the Real Estate Market as, if we know whats going to happen in any given area before most everyone else, then we have a unique and timely back door investment opportunity and thats what we as Real Estate Investors - are always looking for, isnt it?
CERRITOS BEACH LOT PURCHASE RESERVATION FORM
www.BajaCalls.com
Mexico prospering despite US slowdown
Workers on the assembly line at Volkswagen's plant in PueblaMX put together Jetta SportWagens, a hot seller in Europe.
The Latin American nation is holding up well with exports catering to the growing world economy.
By Marla Dickerson, Los Angeles Times Staff Writer - May 23, 2008
MEXICO CITY -- A sizzling stock market. A strengthening peso. Good economic growth. Someone forgot to tell Mexico that the U.S. has been flirting with recession.
Mexico's gross domestic product expanded at an annualized rate of 2.6% in the first three months of the year compared with a year earlier, according to government figures released Thursday. It's a respectable performance that highlights the nation's surprising resilience in the face of a U.S.
slowdown.
The growth appeared muted compared with the fourth quarter of 2007, when Mexico's GDP expanded by 3.8%. But there was statistical noise in the first-quarter numbers. The government this year adopted a new international standard for calculating GDP, which is the value of all goods and services produced in the economy. And the January-to-March period was hobbled by this year's early Easter week holiday, which resulted in fewer working days compared with the first three months of last year. Adjusting for those factors, first-quarter GDP growth was a solid 3.7%, according to the Treasury secretariat.
"Mexico . . . is not immune" to what's happening north of the border, said Gray Newman, chief Latin American economist for Morgan Stanley in New York.
But "it's not suffering the kind of downturn that everyone was expecting with weakness in the U.S."
Mexico is the world's 14th-largest economy, according to the latest statistics available from the World Bank, with GDP of $839.2 billion in 2006.
The fortunes of Mexico have long been linked to those of its northern neighbor, bound as the two countries are by geography, immigration, trade and investment. The U.S. housing industry, for example, which employs 1 in
5 Latino immigrants, is in a slump, resulting in a marked slowdown of remittances sent to Mexico. A prolonged downturn would undoubtedly hit Mexico hard.
Still, the nation's economy is holding up well. One factor is that much of the world economy is growing despite the U.S. slowdown. Although Mexico still ships about 80% of its exports to the U.S., its farmers and manufacturers are looking for new customers in Asia, Europe and the rest of Latin America.
That diversification is paying off. During the first quarter, Mexican exports to the U.S. grew just over 16%, while shipments to the rest of the world climbed 32%. Exports to Europe grew 56%.
The trend can be seen at Volkswagen de Mexico, the Mexican division of the German automaker, which manufactures Beetles and Jettas at a sprawling facility in Puebla. Through the first four months of the year, VW's Mexican exports totaled 123,000 vehicles, up 29% from the year-earlier period, according to company spokesman Thomas Karig.
The Puebla plant recently began manufacturing the new fuel-efficient Jetta SportWagen, which is proving to be a hot seller in Europe, Karig said.
Exports to Brazil and Argentina are strong as well. The Mexican government's decision to enter into free-trade agreements with a number of nations has made Mexico an attractive place to build cars, Karig said.
"We can export our cars very competitively from Mexico to these other markets," he said.
Other automakers are posting good numbers as well. Through the first four months of the year, vehicle exports from Mexico are up 18.5% over the year-earlier period, according to figures from the Mexican Automotive Industry Assn.
One of the strongest performers has been General Motors Corp. Mexico's largest automaker exported 127,625 vehicles in the first four months of the year, up nearly 38% over 2007, according to the association.
Part of that jump reflects production of a new model, the Saturn VUE, at GM's Saltillo, Mexico, plant. The crossover sport utility vehicle gets better gas mileage than traditional full-size SUVs, according to GM spokesman Mauricio Kuri.
Skyrocketing crude prices might be pinching U.S. drivers, but they've meant record oil revenue for Mexico, the world's sixth-largest oil producer. The petroleum windfall is bankrolling a slew of government spending and investment, which is helping to keep the economy rolling. Total public spending increased 9.5% in the first three months of the year compared with the same period last year and President Felipe Calderon plans to invest billions in roads, airports and other infrastructure during his six-year term, which ends in 2012. This includes the widening from 2 to 4-lanes of MX Highway 19 along the PacificCoast between CaboMX and our CerritosBeach projects along with the installation of electricity along its entire length (there has never been power along this stretch of the PacificCoast); the expansion of the CaboMX International Airport in an attempt to position itself to compete with the existing SanJoseDelCabo International Airport as well as the influx of lots of US investment dollars in an area where fully 1/3rd of all US to MX retirees flock to both invest and to retire:
BajaSurMX - ed.
"Fiscal policy is one of the main weapons that the Mexican government is activating to protect the economy from the American recession monster,"
said Alfredo Coutino, Latin America analyst with Moody's Economy.com.
"We're already seeing the effects."
The economy has also gotten a boost from a stronger peso: The currency has risen from 10.91 to the dollar Dec. 31 to 10.37 on Thursday and Mexico's IPC stock market index is up 5.8% in peso terms year to date and up 11.4% in dollar terms, thanks to the peso's strength.
Check it all out at
www.BajaCalls.com
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