What I learned after 2 years of doing Real Estate in Costa Rica
How did I get over 1.4 Million Square Meters of Prime Real-Estate for my company in just over 2 years, sell $14 Million worth of real estate, all that during the pandemic, with only a small initial investment, and no real estate experience.
In August 2020, I left PassRight after 5.5 years and I wrote here what inspired me to move to Costa Rica and start YokoVillage. And let me tell you, I’ve been busy. In this article, I will share what I learned in 2 years of Real Estate development in Costa Rica.
What had started with a giant leap of faith, which is something I recommend everyone do, had turned out to be the most interesting, demanding, rewarding and profitable initiative I have ever taken on.
I have been through a lot, and still am going through a lot. Being an entrepreneur in a foreign country is tricky, and it takes a lot of work and a lot of guts. Here’s what I’ve learned, along with some confessions, tips and tricks.
No Capital?!
There is this joke that if you have an issue with money, and if the issue is you don’t have money, then basically, you don’t have an issue. Yoko had started with almost no capital.
When I asked a few veteran real estate developers, they pretty much all gave me the same response: “Doing a big project like the one you are describing, without capital, is 100% impossible! Don’t even bother trying.”
But you know what? If years of experience as an entrepreneur have taught me anything, it is that anything is possible. Hard? Yes. But possible. So instead of listening to advice, I listened to my gut feeling, and now I own 81.5% of the company, and, in two years of activity:
- Purchased 1.4 million sqm of land
- Built 2 large YokoVillas, and 13 luxury glamping units
- Developed 3 miles of roads
- Made $14 million in sales
- Made authentic and necessary government and bank contacts
- Have land owners all over Costa Rica look me up to help them with their lands, do joint ventures and building stunning homes such as this one.
The Old Fake It Till You Make It.
I first invested in design. The rest followed. The enormous investment in branding and full design of the YokoVillage villas seemed insane to the eyes of my peers when we just started.
This was before purchasing a single square foot. I knew down to my bones that I’m going to make YokoVillage happen, no matter what. I knew I needed to be the “Apple” of Vacation Rentals and Live-Work Communities. This has made all the difference.
Experience, Ego and Control.
I am the only director, I don’t need permission from big shareholders to act. Understanding that in the beginning is crucial. Especially in real estate, and unlike the tech realm. That, for me, is an engine for endless motivation, keeping the company on track and aligned with the vision. My past experiences starting other companies had taught me that lesson about myself, something that I believe I can share with those who are entrepreneurs at heart:
When I feel free to realize my vision, I work harder, I care more about everything, and at the end of the day — I succeed more.
Obviously, this also created a lot of challenges, which I will be sharing with you. Right now I’m glad to say I’m so motivated not just because of my freedom in this but also because I’m 100% aligned with what I’m doing. I love working with entrepreneurs, I love having the opportunity to be part of something that has a unique design and I’m also motivated because I have the ability to plant thousands of trees and invest in the land. I’m also motivated by the fact that God Is Not Making More Land. I’m happy to sell something that is not being created any longer (especially in such high frequency lands with tremendous views and warm weather).
The Power of the Few: How I brought capital to Yoko
That story was told here. The reason why I succeeded doing this, are related to:
Relationships over money.
Nothing is more valuable than building strong, authentic relationships, and you can not put a dollar amount on their value. Thanks to those who believed in my capabilities when we worked together in my previous business, I was able to ignite the light in others, who then in turn were able to put their trust in me with the initial investment capital.
Design. I was actually promoting YokoVillage as if it already existed. I already shared that I started working on the brand, designs and had spent ridiculous sums including all my life savings before I had any product. What we did with YokoVillage, was go full-branding with various villa designs, and a full-on marketing strategy for a large-scale real-estate development, before owning any land. I acted like I owned it. And later, I owned it. That’s also the power of manifestation.
Group Purchase Model: After the first purchase I simply duplicated a well known group model, and purchased at a discounted price. Meaning, I got a group of great people to buy more land together with me — below the market price.
“Help me buy this land in the best location in Costa Rica, and I’ll get you the best deal ever!” Over time, 47 people, who understood the opportunity and trusted Yoko, joined the community and gained tremendous financial value. They are the proof that this model works.
Point is, that having a strongly defined vision, supported by the best visual representations done, in this case, by a supreme architect and designer, is worth more than having capital. In the right working hands, this can help one perform various miracles. Bringing money to the project is just one of those miracles.
The Wolf Pack — Team is everything!
The most significant “luck” I had so far was constructing the Yoko team. We are, no cliche, one big family, or in the high season, a powerful wolf pack. I want to share an important message to anyone thinking of, or already running a business: Pay Better!
Paying better pays off in the long run (and also the short run, actually). When you pay better, you attract talent, encourage work, and get enthusiasm out of the team, which is priceless. In Santa Teresa, in Costa Rica, and in general in Latin America, people often get used, and that so-called advantage for employers is actually a disadvantage.
Past projects have taught me firsthand how paying people more than they are accustomed to earning, strongly influences them. Not only employees, but this is also true for the 3rd party contractors I need on my side, to make things happen. I even pay more to Realtors, or friends referring business to me.
Pay significant finders fees. It works!
Lesson Learned #1: Coco A Coco — You cannot make a coconut grow faster.
North America, the west, the capitalistic approach, it’s all fine as long as you are in a western country. The rhythm is high, the clock means business, and people value punctuality. Some Ticos get that. But not that many. One of the reasons I find Costa Rica so attractive is that it is, in a way, “disrespectful” of this Machine-Like attitude of the west.
A Blessing and a Curse.
As a tourist, or even an expat, it is nice to let go and trust that everything will be alright. So what, if the boat excursion was meant to leave at 6 am, and it’s already 9 am, and you have spent the last 2 hours at the pool, “waiting”?!
But as an entrepreneur trying to get things done?
I’m used to doing business in the US, with the US rhythm, the US punctuality, and US customer service (both as a provider and a client). I imported this North-American (and also Israeli) rhythm with me to Costa Rica, but the iguanas, the sea turtles, and the sloths were not impressed. In the beginning, I was a bit shocked to learn that even the banks, the lawyers, and fellow businessmen were not so moved by my attempts for efficiency.
This country has its own rhythm, and it teaches you a lot about life, about relativity, and about your perception of time, which are, in a way — one. I guess it’s an important thing then that your investors/members/clients also get the “Pura Vida” way of living.
No matter how fast you sell or how prepared you might be, certain processes here simply cannot be accelerated. At a certain point, one must simply let go and wait for the local time to catch on.
The solution I found is straightforward — run a few parallel projects, so you can stay busy, while waiting on things.
Staying in one location and succeeding in it without growing too fast to new locations, protects the brand, and the reputation.
At the same time, don’t over-expand. As the brand got big, land owners from all over Costa Rica started approaching us, asking us to work together and create a project on their property. We didn’t go for it, even when the deals were tempting. Not yet!
Lesson Learned #2: Mind Your Own Business! Allocate Work to Professionals.
When taking on a real-estate project, partnering up with a veteran constructor is best. Even if you have some construction experience, you are in a foreign country, and out of your comfort zone.
I’m into business, not into the construction business. This lesson was learned the hard way. With Yoko, I’m in the business of selling land and working on financial deals. We are NOT in the business of constructing homes. No one can start a construction business from one day to another. It takes years to get good at this.
What I ended up doing, only after a lot of trial and error, was to find the best construction partner around, and get them to work for us. Sales, marketing, fundraising, and financial plans are all in one realm, a familiar realm. Building houses is a whole new ball game, and you want someone with serious experience.
Lesson Learned #3: Big Business and Small Business. The Headaches will be there. It’s just perception.
When you stop and think about it for a moment, you’ll soon realize that a day at the office will be a day in the office, and work will be work. You will talk to buyers, sign contracts, receive money, pay the employees, and deal with your daily tasks. That’s just the way it is — A day at the office. Right? In that case — what’s the difference between building one home, five homes, or 24 homes?
I’ll tell you the differences: The number of people you connect with. The amount of impact you get to have. And the profits at the end of the day.
Since I made it a point to only hire the best, I can allocate the workload to those professionals with confidence, and at the end of the day, I just need to be on top of the game. Once I accepted this truth, I went big, knowing that it was worth it.
Lesson Learned #4 Development Is A Financial Business.
A real-estate business can scale only by leveraging financial establishments. The MVP in a development company is the CFO. Control of funds, financial plans, communication with banks, the right loans vs Bridge Loans etc..
Lesson Learned #5 Stay True To Your Values And Keep Creating New Designs.
When it comes to selling houses, design is everything. Your designs differentiate you, and attract the right audience. It is your uniqueness that makes your monetary value. Creating new designs is necessary, as the initial design will never suffice. One thing that helped is we continued the learning curve, and changed our designs according to our clients’ different needs with unique desires and visions. This helped our potential members feel special, and it helped us with sales.
Lesson Learned #6 On Fear and Sales
The entire real estate sales process is a psychological journey to remove fear. When a potential member reaches out to our sales team, soon enough, he or she starts stating their concerns and fears. For me, this is a good sign. It means that the person is genuinely interested, and I simply need to help them deal with their fears, and walk with them hand in hand towards their goal.
One must remember those fears are very legitimate, and it is normal for a person to have doubts when considering investing their capital in a foreign country. You must make sure to dedicate time, space, and honest human empathy to deeply address these fears with them, and help them evolve and grow.
Here are some of the common concerns I hear daily:
- Will he be able to deliver?
- Can he build quality homes?
- And what about earthquakes?
- Is there a road? Infrastructure?
- Won’t I be isolated on the mountain?
- Is there a guarantee on my investment? What about permits?
- Joining now when titles are not available? Is that even legal?
- And so on…
Many more questions arise about money, permits, immigration, Lot Selection, attorneys, and other topics. Still, the fact remains — it is about recognizing the overarching fear, and dealing with it gently, but firmly, and with knowledge, skill, and of course, facts and numbers. That’s why we invested time in our presentation, our FAQ page, our financial sheets, our blog, and mostly our purchasing process.
Initially, it was more about trust in me, the project, and the opportunity. The first to join were those who are usually first in line, those who are entrepreneurs at heart, and thus weren’t afraid to take the leap of faith necessary to do great things in life, and win more.
As the project evolved, meeting these fears and questions became easier, as I can show the things we have done here. We built bridges and roads, dug wells, and pulled electricity lines. I got permits from the city and the state for water, construction, and everything else needed, and I have signed contracts with internet providers. There is an office with a dedicated team, and a list of members & clients I know personally, many of whom were guests at my home. And of course, I also built several houses and impressive glamping units. Overcoming the fear of investing is much easier when I show members the roads and the infrastructure, and take them to see the model home.
And yet, many bought in before I had anything tangible to show. That is why I make this statement, and stand behind it: The entire sales process is a psychological journey to remove fear.
RULES OF SALES At Yoko
Inspired by my investor and sales coach Kevin W.
- Reciprocity — If you invited me to your wedding, there is an even bigger chance I’ll invite you to mine. In Yoko, we put a strong emphasis on helping, communicating, and doing the best we can to assist the people interested in joining the community. What do we do?
- Hosting. Lots of it. Free stuff, overnight stays in San Jose, work space in our office, dinners, T-shirts, and so on…
- Free concierge
- Planning the trip
- Domestic travel
- Airport pickup
- Spending meaningful time together
- Helping to find legal assistance
- Getting better financing deals from banks
- The list goes on…
The idea is to ensure our potential members know they can ask us for help with everything and anything, because we understand the challenge of coming to, and investing in, a foreign country and specifically in Costa Rica.
2. Credibility and knowledge — Having highly skilled professionals on our team is proving to be useful in sales too. We can provide direct communications with Yoko architects and engineers, so the clients get their answers directly from them, understanding we have the know-how necessary for everything we do.
3. Consistency — We will still be here next time you come to Santa Teresa. We will still offer to pick you up, use our concierge service, answer your questions, and support you the best we can.
4. Social proof — We rely on our first 47 members to help us. Remember reciprocity? The community ties are strong, so we can easily ask members to connect with new members. The community evolves organically, and so do its members.
5. FOMO/Scarcity — There is a necessary leap of faith in investing, especially in a foreign country. The Fear Of Missing Out (FOMO) is a powerful tool to help people surpass their fears and make the move they want. To create FOMO you need scarcity. People want to feel special and to know there is an opportunity they might miss. Having 3 lots left and 30 people looking to buy them is the way to do it, which by the way is the situation in Santa Teresa most of the time.
6. We offer unique deals that are exclusive to us.
Thank you for reading the first third of this article. If you are interested in continuing, and seeing how this story evolves, please Subscribe to The Yoko Village Newsletter, and I’ll send the entire article to your email.
Please feel free to send me an email: Liran at YokoVillage.com to express any thoughts related to this writeup.
Follow me on IN, IG or FB — I’ll be sharing more information on these platforms, as we continue to make significant progress.
