Why do we only work with well-known and established land developers?
We just did a loan for $80,000.00 one month ago, and they just sold the unit.
The lender will receive approximately $84,800.00 or $4,800.00 in just over a month!
That is because of the 6-month pre-payment penalty on the loan. And, this specific lender is now going into a new loan with the same borrower.
This new loan is for the same amount ($80,000.00) for 2 years at 12% with the same pre-payment penalty clause. I hope that this enlightens everyone why we like to work with this company. This is the 4th time this has happened.
They are a good solid company with an impeccable track record. They are catering to the right target market. Their target market is first or second time home buyers. REC pretty much sells to the Costa Rican (“Tico”) market only. This is very smart.
Like any big development company, they always have a few Costa Rican banks that have approved them for financing for their clients. This makes life simple. Because of their location, some people are buying them as investments since they generate a good rental income and have no problem finding tenants because of their proximity to downtown San Jose.
This location, Rohrmoser, is growing and becoming very limited in the space available for construction. This also drives the price up. Why do they like to work with Gap, you may ask?
First, lets be clear. We receive no special bonuses of any kind from REC — just our standard commission fees. They have stated quite clearly why they like to work with us:
- We are cheaper than banks.
- We move much more quickly than banks.
- We are much less of a hassle than the local banks that can take up to 5-6 months and more for a loan.
They find it incredible that even after 20 years of working with the same bank, they are afforded no favoritism or special offers of any kind.
“It’s like, every time we go in to the bank, it’s as if it is our first time meeting them.” That is a quote from Carlos Alfaro, one of the two principals of REC S.A.
In order for a development company to be truly profitable, they need to speed up their process. They cannot do anything about the permit process here, but they can side-step the glacial speed of the local banks by using Gap Investments as their lending source!