CARIBBEAN PROPERTY MAGAZINE
Living, Working and Investing in the Caribbean
C O U N T R Y F O C U S : COLOMBIA
Medellin Hotel Restoration with Picassos and the Homeless
By Mitch Tyndal
Medellin is known as the “City of Eternal Spring” because the climate almost never changes.
When it is not raining the days are often warm and sunny while the evenings are cool enough that only a small blanket is required when sleeping. The vast majority of houses do not have any type of air conditioning or heating equipment.
Most days are like that perfect spring day we all remember as children, a drive through the mountains is stunningly beautiful, the people are friendly and everything is still affordable.
A few years ago there were almost no expatriates to be found in Medellin. Most foreigners considered traveling to Medellin as too dangerous due to its infamous history as a major player in the cartel wars. But things have rapidly changed in the last few years.
Now Medellin is experiencing a revitalization of tourism and business interest. Several multinational companies are placing their headquarters in Medellin. There are probably more new buildings being constructed here than anywhere else in Latin America with the exception of perhaps Panama.
AND WHERE ONCE FEW GRINGOS DARE TREAD THERE ARE NOW SIGNS IN ENGLISH WELCOMING US TO THE CITY
And where once few gringos dare tread there are now signs in English welcoming us to the city.
After several years of traveling around Colombia I finally decided to settle down in Medellin and open a business. My idea is to open a small Boutique Hotel that focuses on helping new gringos who are interested in investing or buying real estate in Colombia.
I figure that after four years of living in Colombia, traveling around the country, forming companies and owning several pieces of real estate that I am the right person to work with newcomers.
Just over a year ago I began searching for either a small existing hotel or a large mansion that I could convert into a hotel. I wanted something with no more than 10 rooms but at the same time with all the amenities of a luxury hotel. I knew it had to be in Poblado since that area is often referred to by locals as the Beverly Hills of Colombia.
In my mind I envisioned a place where gringos could come to meet other gringos in a pleasant environment and learn from one another everything that is needed when first arriving in Medellin.
My search took over 4 months where I looked at every large mansion for sale in the entire city. I used nine different real estate agents which allowed me to quickly learn the correct price compared to the gringo price. Some real estate agents were very honest with the properties they were showing while others were inflating the price since I was a foreigner.
Finally, at last, I found the right property.
It was a large 13 bedroom mansion that had operated as a hostel for many years.
It had a giant pool, sauna, steam room and outdoor bar. It was located in one of the most secure, private and quiet areas of Medellin and yet within walking distance to the major shopping areas. It was perfect in just about every way except for one -it was in ruins.
My adventure that would last the next nine months was about to begin.
Now that I finally found the perfect property I needed to complete the purchase process, find an architect and then start building. I will explain step-by-step how these processes were completed and the experiences I had in doing so.
When purchasing a property in Colombia the buyer and the seller first form a contractual agreement in writing which is called in English a “Promise to Buy and Sell”. The contract basically stipulates how the transaction is going to transpire as well as the closing dates. The contract in its most simple form guarantees to the buyer that the property is free from leans or if not will be by a certain date. It also guarantees to the seller that a certain amount will be paid for a deposit on a certain date and the rest will be paid on a predetermined closing date. Depending on the unique needs of either the buyer or seller there could be various other conditions added.
The contract needs to be notarized after the terms are agreed upon by both buyer and seller. In Colombia to get a document notarized only requires walking down to the corner notary and paying about $2.00 to have it stamped. Once it is stamped it becomes a legally binding agreement for both parties.
Before the closing date the real estate agent should complete a complimentary background check to ensure there are no outstanding debts or leans. On the day of closing both parties go to a Notary who oversees the final transaction. The Notary will make sure everything is in order and that the title is transferred.
There really is no need to use an independent lawyer for this type of transaction since the real estate agent and Notary do almost all of the work.
OF COURSE, IF YOU ARE COMPLETELY NEW TO COLOMBIA AND CONCERNED THEN BY ALL MEANS HIRE A LAWYER
Of course, if you are completely new to Colombia and concerned then by all means hire a lawyer. The problem is that many lawyers in Colombia like to make things a lot more complicated than they are in order to justify their salary. I have been involved in over 20 real estate transaction in Colombia and have never once known a Colombian to use a lawyer. A few times I have known gringos who insisted on using a lawyer and it often seemed like a waste of money since the lawyer basically just reads the contract and shakes his head.
I hope to write a full article on just how unprofessional some Colombian lawyers are in a future article. For now I will say that after going through 14 lawyers there is only one I will use anymore.
After the purchase was completed I immediately started the process to remodel the house.
One of the first things I did was try to find an architect. Finding an honest architect in Colombia proved to be as difficult as finding an honest lawyer.
The house did not require any new structural construction so the architect only needed to take the old drawings and change a few things such as where I was adding bathrooms or moving doorways.
I figured the entire job should not take more than a few hours but since I was in Latin America I would allow for 1-2 work days.
Amazingly the first four architects I talked to gave me quotations in the $2000-$3000 USD price range. I knew right away that I was getting the gringo price. In a country where a good salary is equal to about $400 a month it is hard to imagine paying an architect $2000+ for at most two days work.
HOWEVER THEY OBVIOUSLY ALL THOUGHT THEY WERE LITTLE PICASSOS SINCE NONE WOULD LOWER THEIR PRICE
However, they obviously all thought they were little Picassos since none would lower their price. When I asked them why it was so expensive I got really lame answers such as their signature on the drawings was of great value.
So I continued to look for an architect who would give me a realistic quotation. After about three weeks of searching I found a certified architect who was willing to do the job for the equivalence of $200 USD. This also included the sacred signature that the others thought was of almost infinite value.
The point here that is important to note is just how much more some of the “professionals” will try to overcharge a foreigner. I can understand some professionals wanting to charge a premium such as 10% over the normal price. However, the quotations I received were 1000% to 1500% over the normal price which goes without saying is absolutely ridiculous.
The next step was to find builders. However, due to the construction boom in Medellin it was impossible for me to find a crew of professional construction workers.
I looked everywhere but everyone was busy for months or years. So I started asking around to see if I could find some guys who could do basic labor. I searched and searched until finally I found a guy who told me he had some general laborers who could do basic things such as demolition, floor installation, tiling and painting. Great, I had found my crew!
On the first Monday on December last year I eagerly awaited the arrival of my new crew.
I was about to meet the men who would convert this destitute mansion into a 5-star hotel.
THEY WERE SUPPOSED TO ARRIVE AT 8.00AM AND IT WAS NOW 8.45AM
They were supposed to arrive at 8:00am and it was now 8:45am. I went inside to call the foreman to determine if there was a problem. He did not answer his phone so I went back outside to discover 15 men standing in my driveway.
They were not how I had envisioned them to be. Most were wearing old raggedy clothes, some did not even have shoes and none of them had any tools. They sort of resembled homeless people. This was my crew?
Although I was not too impressed I figured I would do the best with what I had. Fortunately the former owner had left behind a couple old hammers and some machetes. I walked around the house with the group in tow assigning such jobs as breaking old walls, chopping down overgrown vegetation and dead trees, removing garbage and destroying the furniture the former owner left behind.
I then jumped in my car to go buy some more sledge hammers and machetes.
The next nine months would prove to be an adventure in patience. The workers had to be watched from the moment they arrived until the moment they left.
If I turned an eye for one second they would either break something or do something incorrectly. I would be standing on one side of the property and hear a crash on the other. The words “oh no, not again!” were said more times by me than by any other person on the planet. Many of my friends have asked me how I survived those nine months. My answer is that each day when it got really stressful I knew that at 5:30pm they would leave and I could have a good stiff drink.
For the more technical jobs such as electrical wiring and plumbing I hired skilled laborers who were working close by at one of the large construction zones. They would come in the evenings when their shifts were over and on Sundays.
I replaced all the electrical wiring in the house and all the plumbing to bring them up to American Standards. I hired 5 different sets of carpenters to make all the new doors and most of the furniture. Finding good carpenters was also extremely difficult since most are working on large construction projects.
Finally, in August the last piece of furniture moved in and the final plasma screen was installed. The heated pool is a toasty warm 89 degrees Fahrenheit. Every room is completely brand new from top to bottom. My hotel is complete and I still have most of my sanity.
I have formed a Colombian corporation to control the business side of the hotel.
I used a lawyer to make the corporation since there seemed to be a lot of running around. I probably could have created it myself but decided that it would be better to have someone else do it because of time restraints. I have started the licensing process for the hotel and things are moving forward.
With all the headaches and frustrations the important thing to remember is that it can be done. Doing business in any developing country is always going to be different than in the homeland.
It is true that there are many people who will try to take advantage of you since they feel they are entitled to your gringo money.
However, at the same time there are honest people who will be happy to do business with you. It is just a matter of separating the parasites from the good people.
Colombia will be my home for many years to come.
I have traveled for over nine years throughout Latin America and Asia. I chose to settle in Medellin because I truly believe that it has a great future ahead of it.
Many Americans and Canadians I meet are still overly paranoid to come to Colombia.
That is misfortunate since Colombia really is a beautiful country full of friendly people. The gringos that are here now are getting great deals on real estate.
If you have thought about visiting Medellin the time to come is now while there are still great opportunities.