Real Estate, Dominican Republic. - The representative of the Elliott Hotel Group which operates in Dominican Republic through the company Sun Village Resorts, admitted having the partnership’s difficulties to finish construction of a hotel and real estate project in Juan Dolio (south), consisting of three buildings with beachfront, and clarified that his companies are in a consolidation process to meet their the commitments with buyers of vacation packages from the United States.
Derek Elliott, speaking with media executives in his hotel located in Cofresí, said construction of the Juan Dolio project is as much as 75 percent completed, and plans to sell a 4,700 meter lot adjacent to the site, which is also the zone’s only empty lot with beachfront.
Elliott said the group also owns a property in Miches (northeast), acquired for a tourism development, which is in the process of selling to focus its investments in Port Plata and Juan Dolio.
He said the Group had problems since it decided to outsource the area of sales. “The experience wasn’t good and we’re convinced that we must have our own sales team. In this property in Cofresí we have finished here and we made important investments and we concluded our obligations.”
Watch videos from the court hearing in Miami with Derek Elliott Depositions Excerpts
Join Stop Dominican Property Sharks to discuss how to protect investors in the Dominican Republic - Here is todays post from Pedro Castelblanco:
Dominican Broker and Developer Conspiracy (Part 2)
To maintain my Florida Real Estate Broker's license I have to make sure that I don't use 5 phrases, when dealing with a consumer Buyer anywhere in the world not just Florida. Failure to do so could result in a complaint that could suspend my license until proceedings reveal a true violation or not. These phrases are all commonly heard as matras repeasted verbatim as "lures" by trolling Developers and Brokers in the DR. To be honest there are some Florida licensees that also use these phrases too, but they don't last very long in the industry because they only get in for the fast buck and go back to waiting tables as soon as the market crashes. Actually, I can legally use all these words, but only in commercial transactions that exceed $ 1 million in value, where the law assumes the buyers (rich enough) are sufficiently aware they are transacting an investment property with cash flow projections based on actual or proposed market conditions and should hire reliable support in the Due Diligence process and hold me harmless.
These forbidden words are:
1. Appreciation on Resale (most applicable for preconstruction)
2. Investment Potential
3. Return on Investment (appreciation or rental income)
4. Guaranteed Rental Demand/Income
5. Projections of any kind based on past or future market conditions
I remember the first thing I heard from Sales people in Punta Cana was the lie about Rental demand. Some Developers even Guaranteed Rental Income for 2 or more years and or Returns on Hotel Rental plans based on a percent of purchase price. It was embarassing to hear mature adults tell me that the demand for luxury rental properties in Punta Cana was very high and expected to grow as if they had a crystal ball. I asked what industry supports high rents here? I don't see any corporate jobs! There auto response is that the Hotel executives were all demanding luxury homes and Condos for their families and would pay $1,500 - 3,000 a month rent without a problem. I was able to debunk that fast as a total fabrication when I confirmed my beliefs that Hotel executives where so poorly paid that they were normally housed on site and given meals to compensate for low wages. But anyone who didn't know any better was sure to fall for that given the amount of hotel growth in the East.
The other lie was that a Rental Pool/Plan could provide me a stable rental income that many were willing to guarantee me, when not using my property. They told me tourists sought luxury rentals as a cheaper alternative to the Hotels. This one was almost believeable for anyone until they actually tried to function outside of a hotel in Punta Cana. It was so evident to me that no one in their right mind would swap an "All Inclusive" package for a Condo just to save a couple of dollars. All they had to do was add it up and realize it wasn't cost effective given all the added costs and incoveniences of Punta Cana life. I can't imagine even the cheapest tourist on a budget would choose to go through cooking, cleaning, shopping, driving around Moto Conchos to Hiquey to shop, pay 16% tax, high gas, rental car and struggle with the language during a restful week vacation. I can see how it is a viable option on the North Coast as an alternative by those who want to stay for a season, but with all the competitive prices in "All Inclusive" it won't be a real threat to Hotels for at least another decade when Punta Cana will get civilized. It was even a struggle for me to put up with the poor quality of life issues while living there.
I am just trying to prove my point that you can expect Brokers and Developers who are unlicensed or regulated to cover themselves with big fat lies that dupe the tourists that normally come from licensing countries and believe there is also some governing agency for all these liars in the DR. I would never be in a profession where only a lie would consumate a sale.
TO BE CONTINUED