The Dark Side of Cuenca Real Estate: A Cautionary Tale with Susan

Dark Side Of Cuenca Real Estate – A Cautionary Tale With Susan (Transcript)

Jason  00:01

Cuenca is full of interesting expats and their stories. The guest I’m going to introduce you to today has been through a lot since arriving in Cuenca. I will let her tell you the details in a minute, but I just want to point out from the start that this is not a feel-good story. This is not your typical rose-colored glasses video that tends to get all the hits on YouTube. I’ll actually be very surprised if this video gets any real love at all from the YouTube algorithm, but that’s OK. 

I truly think that sharing this cautionary tale will help some of you when making the move to Cuenca. And that is enough. But for me, it’s actually a little bit deeper than that. Stories like this one are the fuel for our real estate business to be the change that we want to see in the market. 

Now, I do sound like I’m on my soapbox a little bit, so let me get down and start our chat with Susan. 

Hi Susan, thank you so much for being here today. Maybe you can just start by telling us a little bit about yourself and what brought you to Cuenca. 

Susan  01:19

Ok, that’s going back to 2008 and my husband and I were kind of tired of living where we were living in the States. It was a little island with like 4000 people and there was the economic crash or the stock market crash in 2008. And I think a lot of Gringo’s actually moved or came to Cuenca specifically at that time so we, we were just looking to, to, to get out of the United States, I guess to kind of have an adventure but we also, we had all kinds of plans and projects so it wasn’t so much to retire as it was to just experience living in a different country. 

Jason  01:58

And you’re saying you came with almost like a bit of a wave of other expats. Is that what you felt like you were all sort of coming at the same time and arriving together? 

Susan  02:06

It was later because we heard, umm, everyone says that before 2008 like Cuenca changed so much between, you know, 2008 and the next decade. I mean, it was just everything was accommodating, all these gringos that had come in. So, it was in retrospect that I realized talking to gringos that so many had chosen, I think a lot of Canadians too, had chosen to leave the US at that time because they lost their retirement income or they just didn’t have enough money to feel comfortable in their retirement. So, I learned later that I wasn’t the only one. 

Jason  02:40

Why did you initially invest in property? What was your attraction to it was it just to have some land of your own and just enjoy your time here on the economic side of things what were the main drivers? 

Susan  02:54

We didn’t have my husband, I didn’t have Social Security so in order to get the visa that we wanted, we needed an investment visa. And so rather than have a CD in the bank, and of course, this was on the, the end of the, you know, the stock market crash in the States so not, not really wanting to put the money into a, a bank and feeling like the land was safer plus we needed a place to live anyway so we started with looking for property that we could live in so and then after that, it was just feeling like, like money. It was the feeling that the money was safer by having it on land because it’s something, you know, that stays, it doesn’t just disappear overnight. I forget the name of the Co-op but there was one Co-op where we had friends that lost a lot of money in that. So, with land, it just felt safer. But that’s. 

Jason  03:44

That’s very Ecuadorian. They generally have this deep distrust of the banks and they prefer to put their money in the land. So, you kind of bought into that approach that’s awesome. And so, we met because you were looking for a potential property to buy at some point, which also meant that you were selling this property. So, where we’re at right now, this is actually at the property that when we last met you were in the process of selling. But it sounds like you may have a little bit of a result there now is that correct or where’s that currently? 

Susan  04:16

Yeah, so I was able to sell this. It was an 8-hectare piece of land, but we didn’t even know that until two years ago when we started the process of deciding to maybe divide off some of the hectares because when we bought it there was no survey of any kind. So, we have no idea. 

Jason  04:34

How much land did you buy? Or how much land did you think you bought? 

Susan  04:39

I think they told us maybe 14 hectares, but we, you know, it’s hard to tell because it was forested and if you walk it, it’s got some really steep areas and so and then we were used to acres so just like, OK, you know. But yeah, so it was, it was close to half what we were told when we bought it. But it is a, you know, we’ve really enjoyed living out in the country so we’ve. 

Jason  05:01

Sure so I think that’s pretty significant learning just there in terms of the just the geographical survey side of things so true like obviously this is all in hindsight and so I’m certainly not here trying to you know like you’ve had some misfortunes right with the property purchase and the idea isn’t in any way, you know, poke fun at that or make lights of it. But if people can learn from that, then I think that is of value.

Susan  05:28

Well, and when we moved here, my let’s see, my dad had passed away and then my mom, they were in their nineties so they, then my mom passed away and I knew that said I would be getting some money from there, their state and I didn’t want especially again after 2008 I mean, everything’s gone up so much but at the time I wasn’t trusting real estate in the US. And so, I thought, OK, I have some money to invest and it’s a beautiful country and I’d get people to help me and I would invest in, in. So, we bought the house to attach to the visa. But then when we had some other funds, we, you know, we bought a farm in Yang Gea, we bought an old home on the Tomebamba to remodel into like a club, like a gallery, art gallery, restaurant club. We bought a house near that so that we’d have a place to stay while we were doing this remodel. And so, I thought I was being smart, you know, doing that. 

Jason  06:30

No, you’re, you’re spreading your risk across a whole bunch of different things. So, you know, it’s kind of hard to argue with the approach from a high level. It sounds to me, I know the story a little bit and we’re going to get into the story but it sounds like there was just a little bit of the details on the back end, which were effectively left a little bit secret or maybe just didn’t understand enough about the transaction. 

And I think that’s probably where some of these issues have potentially arisen so let’s get into the purchase of this particular property, if you’re OK, because it’s the one that I’m most familiar with. 

And so, this, it’s a beautiful property. I’ve been looking forward to this interview all week just so I could come out here and, and see it again. This is obviously the library area of the house. Susan is very well-read, as you can see, and she promises me that she’s read every single one behind us. So, feel free to quiz her on that. 

No, no so the, the purchase here itself, I know it didn’t all go according to plan, but let’s just you know, if you can just maybe start from the start of the purchase and maybe along the way we can just talk about some of the issues that did arise. 

Susan  07:36

Ok and this property compared to a couple of others where we were just so you know so misrepresented on the value, this one I’m sure also coming we were, we were so fresh from the US so we didn’t have any perspective on, on realistic prices for real rural, rural real estate and so on, on the can I give like the price that it was on the deed for the property because it was like 31,000 thousand for this 8-hectare piece of land with a house on it. And, and I’m not sure what the owners had in it, but they didn’t have a lot invested in the property. And, and so, but they had listed it with a broker who probably at least doubled what they had wanted. So, and so I think so that, so we didn’t even know any of this till like a long time later but because we, you know, it just seemed reasonable to us because compared to the states, we were getting a lot of land in a really nice house it was about, I think 20 years old at the time, but it was, you know, beautifully built. And so, we were really happy with that, but it was later that we found out not only had we significantly overpaid, but most likely the sellers didn’t even get half of what we paid that that, that that was taken by the real estate agent and. 

Jason  08:58

So, and what it looks like has happened is the real estate agent in particular has effectively said to the owner, to the seller, hey, even though the property is worth, you know, let’s say on the deed 31,000 thousand I’m going to sell it for, I don’t know, 60.000 thousand or something like that, but keep that information separate from the seller so the seller is completely exactly so this price increase. 

Susan  09:21

I realized we never were even… if we were with the sellers in different situations, they didn’t speak English and we didn’t speak Spanish and no one ever translated for us. And so and, and the, and at that time, I think they’re not doing it as much, but at that time they would just put anything in the deed so then I remember saying, “Well, why don’t you put what we paid” but they go, “Oh, we don’t do that here.” So then when you go to sell it, and I was pretty fortunate with this one, but I know, yeah, you’d have to pay tax on the value. 

Jason  09:51

The arguments are capital gains, so they would put the price low. So, it looks like there are no capital gains, which means that the seller doesn’t have to pay the capital gains, but that just kicks those capital gains down the line to the next person. 

Susan  10:05

Well, and, and then my, we had AI had a dependent visa with my husband on the property, which at that time was like, I don’t know, close to 25,000 thousand so it was a lot cheaper, but I wanted to, he started getting sick later on and I was realizing I’d be really good if I had my visa separate, but there wasn’t enough value in the deed at 31,000 thousand even though the house was worth, you know, quite a bit more than that. They won’t change that and I had it appraised and it got appraised at like 10 times what we paid in the appraisal. But so, but they won’t go by that so they won’t go by what you paid because it looks like you paid what was in the deed. So, it was just realizing, okay, this is, it’s, it is you. You don’t know you don’t know unless you have somebody who’s really trustworthy to help you through this process. 

Jason  10:52

And it sounds like you only realize this a long time later. How long after the purchase did you? 

Susan  10:59

Oh, you know, cause maybe, maybe it was around five years ago, cause I know people kept selling well, if you need some cash, why don’t you just divide some off and I remember saying, I think it’s more complicated than that, but, you know, getting the survey done and so I, so it was pretty, you know, just in the last few years, because that’s when we were trying to divide it and then people were saying, oh, here’s what it’s worth and kind of implying it was worth about what we paid for it over 10 years ago so. 

Jason  11:30

Did you ever consider so obviously you got a very raw end of a deal it sounds like did you ever consider taking legal action against the people in that deal?

Susan  11:41

Let’s see, in this case, the people involved were… one of them already had legal action against him because he was doing wrong visas he was doing work visas just like cranking them out and the government came after him. So, he was the main attorney. So, he was in enough trouble. And then and then we found out that the real estate agent didn’t have a license and so you can’t really go after somebody. I mean, it’s not that. Yeah so, there wasn’t. And then later on, I did have experience with attorneys, and then I found out that didn’t work. It’s not like this so, well, not let’s, you know. 

Jason  12:20

I don’t want to turn this into, you know, like a legal side of things, but my understanding is that if you do have 5 years after the event and if you can prove it, you could potentially put that real estate agent in jail. Obviously, that’s a huge, you know, yeah, a lot of negativity there’s a lot of issues with that path as well. 

Susan  12:39

Yeah well, and we were told that we probably couldn’t. It’s very hard to prove because they’re so good at covering their tracks and then I realized when we had purchased another piece of property, I was called into the notary twice signing two different deeds and no one explained to me what that was about. And still, I’ve wanted to hunt down the people, but they may not, they were older. I don’t know if they’re still living to see if they even got half of what we paid because this was a property in town on the Tomebamba. And then by that, and of course, at that time I didn’t know but then years later when I was thinking, Oh my gosh, like we probably paid double for that as well but I was curious what those people got and why did I sign 2 deeds and, but most of the attorneys and or realtor people that are involved there, they’re very being careful not to send emails or texts or make sure there’s no trail that you can say, “Hey, you told me this.” And so, I kind of felt like any. 

Jason  13:34

Point through the transaction, did you see any sort of red flags? Like were you getting any sort of gut feelings? 

Susan  13:40

We were just, my husband was as bad as me. We trust people. We trust people. So, no.

Jason  13:47

I think that’s a fantastic trait, really. 

Susan  13:49

Well, but I understand, I think now a lot of people that really don’t trust people can be some of them because they’re not trustworthy themselves like they just won’t, you know, they need everything in writing. I mean, once I tried to borrow a couple hundred dollars from someone and they wanted to, what do you call it, like have mom my car, you know, sign it over. Yeah, I mean, I’m like, “Oh my gosh.” Like they really have had a bad experience. So, by investing in land, we definitely became cash-poor because we had land, but then we didn’t have income and what we were hoping to create an income, we were very naive because we bought the farm in Yangia because there was almost no organic food there was no kale when we first moved here. But you can’t make money on a farm because the produce is so cheap and you’re paying so much to the, the, you know, laborers and stuff so that was just, that was just naiveness and then selling that and then the other endeavors that we tried, it was just not really saying how hard and they have done a survey they’ve got like the Ecuador ranked as far as economic activity and it’s, it’s very low in terms of because of the taxes, because of the changing laws, because of the how much you have to pay if you hire someone and then fire them, even if they’ve been stealing from you. So, there’s a lot of factors that we were. 

Jason  15:07

A lot of expats that start businesses here get tripped by the labor laws. I think that’s important. 

Susan  15:09

Yeah, so we were naive about all of that you know. We just and that was actually what we wanted to do and one of these buildings that was going to have like a clubhouse area, music – live music. We wanted to have lots of seminars there and just have different attorneys and real estate people and business people and say, here’s what you need to know. If you still want to do it, that’s fine, but understanding that it is not, the real estate agent will not tell you if you don’t have access to your property. They won’t tell you that and the lawyer will not tell you about potential problems necessarily you have to you have to know those problems and ask them specifically. So, it’s the opposite of in the States where the lawyer’s job is to tell you what you don’t think of. So, we were going to have speakers come in so we were trying to help other people not go through what we went through because we saw that most gringos are fine but if they do come in with money, what they do come in wanting to invest, wanting to start a business or wanting to purchase land, then the chances of them getting in trouble and losing money are very high. 

Jason  16:18

I agree and so that’s why we’re doing this video this video is effectively a bit of a cautionary tale if you will. Things of, you know, really what to look out for. I’m hoping when you’re going through especially a property transaction, that’s the one that I know most but of course, any transaction here has the same sort of due diligence that’s required as well. 

Jason

What is that? 

Susan  17:01

It could be a donkey. Cows make really weird noises too, so it’s some yeah, it’s peaceful out here, except for noises, looking at that… 

Jason  17:09

But I like it. It is what it is. We’re in the country and we have the country sounds. I love the bird sounds though. 

Susan  17:14

I know, I know. I love it out here. 

Jason  17:17

So, we’ve had a quick scene change and you mentioned something.

Susan  17:22

Is it on again? 

Jason  17:23

It is on again. I remember this time. OK, we talked about it before and I want to pick up on that with the real estate agent. The real estate agent to you was obviously selling at an inflated price and to the seller they were telling them that it was a deflated price. Now, obviously that’s terrible, but you’re also telling me that throughout the transaction, there were a lot of other things that you noticed just weren’t right. Either you noticed them at the time or later on. You figured out that they probably weren’t the right thing so can you just walk me through some of those actions and how you eventually discovered what was probably happening? 

Susan  18:02

I don’t know because it was years later because we had bought, you know, it was mostly when we were dealing, when we did a remodel in town and when we had bought another building in town that we, we, we really wanted to buy this one house in town that was really nice and the, the, we had been told it was going to appreciate that it was under, you know, really good location it was an old building so we thought we could always sell it to someone that wanted to remodel or put something there. So, we were just, we were told it’s worth so much. But oh, the owners, they weren’t ready to sell it. But the house next door was for sale. And we didn’t really want the house next door, but we thought, well, OK, we can’t get that house because they don’t want to buy it. So, because we were trying to get close to this commercial building that we were remodeling, we wanted to have a place close by so we could be there. And so, we bought the house next door and the next day the one we wanted was for sale. So, she, you know, the realtor had just told them like you know, and then and then we made it. 

Jason  19:07

Was this the same realtor? 

Susan  19:11

Yeah. And we made offers. We kept making what I thought were really reasonable offers, but it was like, no, they won’t budge. 

Jason  19:18

They weren’t moving at all. 

Susan  19:19

And then I realized later that wasn’t them. I mean, they had the house, they built the house, they had been there forever. So, they had, you know, very and it was a very old home and so they hadn’t, you know, put much into it for years. And they would have been thrilled with a third of what we paid and who knows what they got. So, it was for whatever reason that we were told, no, they won’t budge and of course, then we immediately tried to sell the one next door, and we lost money on that and then we ended up making payments on the one we did want. We were just really, we were just, so we just should not have done that but I guess I believed that it was an investment because I was being told, don’t worry, this is how much it is a meter you can turn around and sell this so. I was thinking, oh, OK, again, my thinking that land was safer than the banks and if I just put it there then I could turn around and sell it in a few years. So, it was, but it was all wrong. 

Jason  20:20

Sure so. But it sounds like the main source of information that you’re relying on was just directly through the one agent. Is that true? 

Susan  20:27

And, and you know, she always had different agents with her who would then tell me things, and then she had attorneys that would tell me things, and then so. 

Jason  20:37

It sounds like the attorney was actually integral to a lot of this. Would that be correct? 

Susan  20:42

Yeah, she may have, yeah, I don’t know if she did change you’re right. Yeah, I think so. I think so. We were just. Oh, goodness yeah, we learned the hard way.

Jason  20:52

You absolutely learned the hard way and I appreciate, you know, you sharing your story. I do think it is very valuable. The other question I had was the real estate agents themselves. How did you find this particular agent? Were they recommended by a friend or do they just have a listing and you’re acquired on that so, you know, how did you originally get in touch? 

Susan  21:11

Well, back in 2008 right there, there was only one that I remember that had a really good website, lots of listings, and spoke perfect English. And so, it was just, oh, you know, we’d just go with that person and because of, yeah, the English and yeah, it was pretty… 

Jason  21:33

There’s an assumption there that they’re professional because they have a website. 

Susan  21:35

And the listings, it was much easier than looking at some of the other, other, you know, websites and stuff so yeah, we just fell right into that hole. 

Jason  21:46

And so obviously this is a terrible thing to go through. I personally am quite impressed that you’ve effectively just rolled with the punches and kept a positive attitude. But like behind the scenes, how upset I guess, were you? What sort of emotional disarray did this cause when you realize that you’re potentially overpaid and some of the downstream implications of that? 

Susan  22:10

It took a while because then I thought, well, we can sell this piece because we had invested in real estate. So, then it was each time I went to sell something, I ended up finding out how much I had overpaid and where you sign everything and then you’re supposed to be paid a certain amount. And I guess I was foolish there too but I had accepted a trade for that corner house that I’d overpaid for. I had accepted some cash and trade of a piece of land in Challuabamba. And so, I went out there with a friend that did real estate and with the real estate agent and with an attorney and then the other real estate different people to look at this piece of land and they all just confirmed, yes, it was worth, you know, a hundred and thirty thousand not to worry. 

And then I had an attorney helping me and I was going to, I had to go back to the States for some health issues with my husband. So, I left a power of attorney with the attorney who they all knew the property was not worth more than like $5000. So, it was significant and we found the record later that the buyer had paid like someone had paid $5000 before then someone had paid 10 and someone had paid 5, so the history of that land was because that when we finally had the Linnea Fabrica, I guess it was then it showed that it wasn’t on a hill, but it was very unstable. It was saying you could put a fence on it and maybe a dog house, but that was it. You could not build anything on it. But even the attorney had signed off when I was in the States before getting the Linnea Fabrica. So, I realized all of that. So, I had no idea. So, we did, we filed a lawsuit, but we filed a lawsuit through the people we thought we trusted. 

Jason  24:03

Him. 

Susan  24:04

Yeah, and so that. 

Jason  24:06

Didn’t go anywhere. 

Susan  24:07

Yeah so he never served this so, so that attorney hired a different attorney too, and but then that attorney never served the guy that owed me money because he was waiting for him. Because he actually went and paid someone off in the municipality to change the numbers on the Linnea Fabrica. So, we finally, when we got the papers and realized we had no lawsuit because now that was our basically the evidence for the lawsuit was that right there said that it wasn’t worth that so then how could they deny us that? You know we were cracked. 

Jason  24:40

It gets a lot more complicated once you’ve got that evidence that effectively, you know, says the opposite of what you’re trying to say. 

Susan  24:47

And that’s what’s sad in this country, I think as gringos realizing that these people, whether it’s the police or the government, all these people that are finding out there’s so much corruption because they’re not, they’re underpaid or at least a lot of these people in their minds, they’re struggling. And so, then if someone says, like, instead of this guy paying me back what he owed me, he could just pay, you know, a few thousand or even ten thousand to somebody to change a document and that would… And the same with the attorney. I know the attorney got paid off and the other attorney got paid off and the realtor got paid off so we were just part of all these people that just saw us as, you know, ducks. Yes, because, and I understand, I mean, now I understand, I understand the culture and I understand how they see, you know, how they see gringos. And they’re not bad people, but they will take advantage when they see money there and I think they’re kind of thinking, well, they won’t even miss it. I think part of it is that because we definitely saw that when we did a remodel too, there was a lot of money flowing out. 

Jason  25:51

So, they just think gringo equals money. 

Susan  25:54

I’ve had a lot of Gringo’s tell me that and ones who are really on tight budgets, but they’ll say they have a, they’ll always send an Ecuadorian to get stuff. You know the price of whatever they need because they know that it’s going to go up if they see a gringo.

Jason  26:06

Sure, and you’re talking before about the house renovation remodeling what happened there? It sounds like you faced some similar issues in terms of overpaying. 

Susan  26:15

We were introduced to a well-known architect who had studied in the States. He had perfect English and my husband really connected with him. He was very, very good at what he did and his drawings were great. But as soon as he started working for us, he got a brand-new truck and we didn’t have a way… we would have needed to have had a separate project manager, but who that would be I mean would almost. 

Jason  26:40

Who do you trust to do that?

Susan  26:41

It would have to be a gringo from the states that you paid to actually. But then he wouldn’t know the… he would have to figure out what everything costs because you have no idea what is really being paid and again, we always kind of think things are so much more reasonable that we can’t say, oh, that’s too much for wood or too much for bricks or too much for labor. But then we did have some issues with the architect after a couple of years and I can’t even remember the basis of that. So, we let him go and signed all kinds of papers so that he wouldn’t sue us because they could do that because we didn’t finish with him and that we wouldn’t sue him. And, then we had a, what do you call it, a structural engineer come in and check the building and we had paid for a structural engineer under this architect. And this guy said it was a commercial building. So, it had balconies and all these things and the beams were all just none of them were structural none of them were supporting the balconies. And so, we, the whole thing, we would tear out a whole floor. We had to tear out all this work and kind of start over on a great deal of it. 

Jason  27:43

So, an obvious question? How did you know you could trust that second structural engineer? 

Susan  27:47

Well, we did see he showed us where that the beams weren’t connected so then we just paid him a lot and then we hired someone that was not, we had to hire an architect because by law, if you’re doing a building in the city so, but that architect, we actually didn’t, he was just on there so that we could legally proceed because we hired a maestro that had helped us a lot in the past that we did trust a lot and who had worked in New York and his standards were very high and but even that, that was scary because I don’t think because there’s, there are so many laws like with paying. What do you know that if he was paying the employees, right, because he had his own employees? So, there was a lot of it, it was very stressful and, and, there were so many things that could go wrong so I was very glad. 

Jason  28:33

We’re being harassed by dogs, it’s ok though. But yeah, so obviously the structural beam, that’s a huge red flag, huge issue. Obviously, you know, that’s terrible. Were there any other little red flags or big red flags along the way that you saw?

Susan  28:47

Just we were putting like, we got an estimate from. 

Jason  28:50

They’re gold-plating stuff. 

Susan  28:51

By the electrical engineer, we got an estimate and then we had shown it to someone else and they said they did the entire one of the hospitals in town for that amount, you know, and so it’s like you’re paying way over. So, we were trying to get, you know, and I forget how we dealt with that, but we again, we just you know, I’ve had problems in the States with a similar thing where it’s just that person that was the project manager worked for the builder. And so, no one was really looking out for me. 

Jason  29:19

There’s no real impartial person checking. 

Susan  29:21

And you would really need that and then I don’t know what you’d have to pay. That’s the thing if you pay an attorney, or you pay a realtor, or you pay the project manager, someone else could pay them more to get them to not. 

Jason  29:32

Knowing who to trust is incredibly difficult, especially as a new expat coming in off the boat. We’re seeing stories like, you know, similar stories to yours, especially when it comes to overpaying. Overpaying for property – really using that naivety of gringos because they don’t know the local prices. You’re not going to know the local prices when you’ve just arrived here. And unfortunately, there’s no MLS or something like that. That you can easily just pull up a bunch of comparison sales that have happened. So, you either need to do a lot of that research yourself and what I mean by yourself, especially if we’re talking about land, that literally means going out there yourself, seeing the deeds, seeing the geographical studies, all that. So that is a huge learning curve for anybody wanting to do that themselves. Obviously, the opposite or the other approach is to have, you know, a trustworthy real estate agent to do that but having that trustworthy real estate agent, that’s just really tough. So obviously, you know, look, we are one of those options, but if I’m in your shoes as an expat trying to come here, I don’t know where to start. 

Susan  30:38

Right, well, and I had, I had someone tell me that because we were looking before we bought the property that we did when we first came, we looked at all kinds of property, but we were told by someone like, hey, people, just stick a price on it so it’s not like in the states where you find out comparable and then you might price yours a little high, but still you’re always in the ballpark. So, we were told like someone will just put, you know, 200,000 thousand on something maybe worth fifty thousand like they just do it and. 

Jason  31:05

Especially when it comes to land, like a lot of people, they don’t, as we’re talking about before, there is this natural incentive amongst Ecuadorians because they just trust the banks to put their money in the land. And because they do that, they’re happy just sitting on the land. The property taxes are next to nothing here, so they can just sit on the land year after year after year and if a good offer comes along, maybe they will consider it. And that’s really what happens. You see a lot of these for sale signs, especially in the countryside. Those guys don’t most of the time, they really do not care about selling. That’s my experience. 

Susan  31:39

We did make an offer on a property before we found this one and it was in Tarqui. But then it was just a few days later it was like, no, they changed their mind. So, it was like, yeah, just like you’re saying, they don’t even know. 

Jason  31:51

It’s also more difficult to negotiate with someone out in the countryside, like I’m generalizing here, but they live different lives and they do business in a different way and so you as an expat or gringo from the US or wherever you’re from, you have to come in here and you have to learn how to negotiate with those people as well. Even if you know what the market price is, it doesn’t mean that you’re going to get that market price because you’re coming in and saying that’s the market price. 

There are a lot of layers here when it comes to negotiation and just dealing with a landowner and getting them to sell. In my experience, that’s actually really quite tough, very opposite like if, if someone in the States, they want to sell, they mean it, that they want to sell. Let’s go do business, you know, we can sell. Yeah, sometimes you need to like sort of wine and dine them and it just seems a little bit backward. 

Susan  32:45

Yeah, and some people are living on land that they don’t have deeds for, and that’s what. 

Jason  32:49

Especially out in the country that that’s a big thing so any, any land that we sell, we have to be very careful that we’re checking the deeds and actually belongs to that person and they have you know, the right to sell that there’s no lien so there is quite a bit of due diligence that you do need to do. 

Susan  33:02

And boundaries and I think now they are putting everything on the… is it the GPS like they’re? 

Jason  33:07

They are getting better at it, but still, you know, like the deeds can be wrong all the time, as you’ve discovered. 

Susan  33:13

Yeah so, so they are trying to at least that because there was still, I guess, a dispute at the end of this property on one of the lines, I’m being told by the buyer that the line is incorrect, but we gave him, he had the copy of the survey and everything so I’m not, I don’t even know what he’s saying but when we put the fence in a few quite a few years ago, the owner on the other side came over and said, no, the Ambrose, this guy that had the property, he came in on my line and it’s wrong and he stole some of my lands and so we just talked to him and said, well, that’s what the difference so we went right in the middle and put a fence Benson and it matches up pretty well with the corners. But still, I mean, nobody had a survey so I don’t even know now. I’m being told that somehow, we have the wrong line. 

Jason  33:59

So even with this sale that you’re going through now, you’re starting to experience not the same issues, but different types of, of potential issues because and, you know, just from an outsider, a lot of it comes down to expectations and that cross expectations, especially when we have the language barrier. 

Susan  34:17

Yeah, and that’s a big one because in this case, I’m dealing with someone who speaks some English. And so, we were having conversations and I was explaining all these things to him because there’s a lot of issues in the country with the water. And you have to, if the water is coming through your field, you can use that water, but then you have to share it with other people you can’t block it. And we did have problems with that where our water was blocked. And I was explaining all this and then later I was told that I agreed to fix all of it. And I actually think a lot of that was just translation issues that as I was being friendly to explain what needed to be done, there was an assumption that I was offering. 

Jason  34:59

That you have agreed to something as opposed to just. 

Susan  35:01

Yes and so I realized that can be very dangerous if you are dealing with any kind of sale if someone says they speak or if you think you speak Spanish and you’re still learning or if the other person speaks English and they seem like they do, but then you find out oh, wait a minute, they’ve completely reversed what I said. So that’s enough. That’s why you need a translator for sure. 

Jason  35:45

Looking back, how would obviously a translator is one option and I’m assuming that’s one that you would potentially, you know, spring for if you had the time over but are there any other suggestions as to if you were doing this again, how would you do it a little bit differently? 

Susan  36:00

Oh, I just, I do always learn the hard way. But you know, I wouldn’t have bought the buildings that I bought as an investment. I wouldn’t have done that because I did not have the understanding of any of this and to be, to really know that they were a good investment, I’m not sure what I would buy instead. I still, you know, I know the banks do really well here with the interest and stuff, but so yeah, I just would not have been so trusting and I wouldn’t have invested like I did in the land but for the house that we lived and we were very happy, you know, to be here, even though we did overpay. 

Jason  36:39

It’s a beautiful spot; you can’t argue with the result there. 

Susan  36:41

And then the sale, I was only sorry that I didn’t have someone with me each time that I was talking to the buyer that even though he seemed to understand, we felt like we were communicating. There needed to be someone there. 

Jason  36:57

What I’m seeing is just like a paper trail throughout this transaction. So, like you know when there are like what is agreed, what is not agreed? 

Susan  37:05

But then you’d want that translator to see. 

Jason  37:07

You’d want the translator, but at least on paper, you’ve got some chance of having a go at, you know, Google Translate or whatever the case may be. But also, just, you know, the promissory note side of things. So, it sounds like at the moment with this sale, you’ve gone straight towards the final deed. 

Susan  37:22

Right, and he wanted to do that so the buyer was just wanting to like with. 

Jason  37:26

But it sounds like there’s a lot of these middle issues around payment and everything like that and that’s really the main purpose of some sort of like a promissory note, to protect the deal. This is everything that we’ve agreed to before we get to that point of signing the deed. So obviously, what’s done is done. And this is for your benefit moving forward if you are in a similar situation, then don’t just feel like you need to jump straight to it. Indeed, there are other documents. 

Susan  37:54

And even at the notary, I mean the notary, it was an office that had been there we used it back like years ago. But she said that because my visa was attached to the property they couldn’t register it. So, then they almost stopped as we were in the process of signing the papers. Almost stopped. But you can’t. So, if you went to the notary next door, they wouldn’t say that so even the notary with years of experience of doing this very thing, there was confusion as to whether if you had an investment visa tied to the land, if it could be sold or if you had to remove. 

Jason  38:27

So, there is no centralization of data here like just. So, if you’re expecting a process just to communicate and talk to each other, it doesn’t. It’s very manual. It is very isolated in silos, especially when we’re talking about the closing process for properties. 

We are going to do a video on that in a little bit so stay tuned for that but just I want to change tact a tiny bit now and I want to talk about one of the other investments that you made. I’m just interested how that is going. I believe it was a gold mining company?

Susan  39:00

Yeah, and, and the main thing I know the people involved, they have very good intentions, but like with the Chinese, they can come in and do like this massive like strip type mining. But these guys were going to do alluvial mining where it doesn’t cause damage and they would go into these pretty deep into the jungle and they put in airstrips and they bring supplies for the people there. And so, they were trying to, you know, be extremely environmentally conscious. They were doing the mining in the stream and they were just going to do a small mining company for a group of people that invested so that they could just get the gold from the mines basically. They wouldn’t even be getting a money payment, but they could always sell the gold. And they were working with the people in the jungles because I know there’s a lot of… they kind of are very controlling of that. But it was the government that was giving all these restrictions and regulations and saying no, no, no, you’re too small and inconsequential, so we don’t want to deal with you. They just didn’t, so then those guys packed up and moved to I forget where they are. 

Jason  40:04

There was an investment that had these plans and it sounds like it got to like stage one of four, or I don’t know. 

Susan  40:09

Yeah, they had different things they kept, you know, they bought all this equipment and the only silver lining was that they did meet a man from Germany who had been living in Peru for years and years. But he had developed an extremely environmentally friendly mine, a piece of equipment that filtered out the little tiny, the little tailing so it would, it would bring a lot more profit to the mining companies. But it was green because they use a lot of chemicals in mining. So, then they started off down that path and they’re still on that path. So, the company didn’t really disappear, it’s reinvented itself and there’s still a potential for that, but it had to be patented. I mean, that was a long, long journey so many of the original investors have died off. I mean, it’s just been years. 

Jason  40:56

How long are we talking? 

Susan

Over 10 years.

Jason

So over 10 years, Yeah and you’re still. 

Susan  40:59

And so, I’m still on their list and I still get phone calls. And so, they’re potentially, they do have something very valuable, but it was just a complete. So that does make me feel better when I see savvy people who have a lot of experience with investing and companies and businesses. And, when they come and mess up, I feel better. And I’ve met some sweet Ecuadorian people who have come from the States and had investments and built a home and then their home got washed away on the mountain side and then their business, all the employees stole the money. And I’m like, OK, I mean, it’s not just me and it does, it helps because it’s easy to feel that we are targets, I think as gringos. But Ecuadorians will definitely, if there’s a wealthy Ecuadorian so it’s they’ll take advantage of that person. 

Jason  41:52

Yeah, sure. 

Susan  41:53

So it isn’t just, you know, it is. It’s easy to start seeing. 

Jason  41:56

That’s an important point. I know a lot of expats think that we have this sort of target on our backs and I’m not saying that to a certain degree that we don’t, but we’re not the only ones with the targets. 

Susan  42:06

No, and it’s like it’s global as far as yeah, people being targeted that they see as just, you know, having money and depending how deep their need. But yeah, so I have, I’ve seen that a lot. 

Jason  42:22

So obviously this investment, you know, what would you do differently for this in a particular gold investment? Would you sit on the sidelines a little bit more until they’re at a later stage? 

Susan  42:32

Yeah cause there are a lot of companies globally, big companies where you can just invest, but like the metals have almost, they’ve done very little recently. They’re actually doing better, but they’re when you put money in the metals, it’s just you’re not trying to make money, you’re just trying to preserve wealth. If you think times are unstable, you’re hoping that it will just preserve the value of your funds in being held in metals. So, I would have gone, yeah, with something more established. Same with real estate if I’d gone with, you know, real estate, I understood which was in the States, but it had just tanked, right and but then it went through the roof after that so I was thinking I was being smart by investing in Ecuador and so.

Jason  43:14

You’re diversifying, and doing the right thing. 

Susan  43:16

And I was and I can see now though just the naiveness because there are so many companies with really good records and they may be boring and uninteresting or whatever, but they’re safer. 

Jason  43:27

But with, I mean, with that gold investment in particular, it sounds like it was very early stage so that was very, you know, it looked like a very speculative play and just from an outsider, high risk, high reward type scenario. So obviously you know, everyone’s risk profile is a little bit different, but did you recognize how risky it was at the time or where did you put that? 

Susan  43:46

Because I thought, OK, I know all the people. It was that feeling that if you invest in so many companies, you don’t even know where the companies are. You don’t really know anything about their product. They’re probably hiring, you know, people in some country and some horrible conditions to create the product. Here it was like you could go visit the mines, you knew the people, and they would come and give talks to you. You knew the product. You knew there was a lot of gold here in the land and that they were helping people. So, it’s like in my mind it was safer because I could see it. But that didn’t make it any safer any more than the real estate that I can see. Yes, but that’s what I was thinking. 

Jason  44:22

Yeah, I understand and so, like, now you’ve got a lot of learnings under your belt. I didn’t know you before all this, but from what I can tell you, you seem to have just taken them all, just rolling with the punches and, and just moving forward and that level of positivity, I truly admire. But now you have all these learnings, how do you choose service providers and I guess how is this experience shaped how you choose different service providers? 

Susan  44:48

Yeah, I don’t know. That’s a very good question. That’s kind of why we talked about that. I’m just not moving very fast right now.

Jason  44:56

So, you’ve now decided to actually not purchase something because this sale as well is getting a little bit complicated. You’ve had a lot of complex issues in the past, so I personally think it’s a good idea to give yourself a year of just breathing room or renting somewhere and slowing things down before we potentially start looking again. 

Susan  45:12

Right, right so yeah, that’s, that’s definitely where I’m at but I’m also, I’m setting up a making sure I have a will for my kids. I have an account that I have my kids on the account so I’m setting up a will so they can have access. 

Jason  45:25

With a different lawyer, right? 

Susan  45:26

Yeah, in the States, in the States. And so right now it actually feels very good not to have any investment. I don’t even have a car here in my name. If I did get a car, I might have someone else buy it so it’s not in my name because it’s complicated if you die and kids and all of that. So yeah, it’s just wanting to make sure my kids are OK, and I had been stressing so much about that because if something happened to me and I had this large investment in a big piece of property, how that would be, you know, get taken care of? I was very worried about that and I do see a lot of Gringo’s a lot don’t have family, so they don’t worry about it. But if anyone that has kids is stressed about how to make it, especially if they have more than one because somehow, they’d all have to show up, it’s complicated. Complicated. So that’s where, yeah, I feel much better that I’m not creating a big headache. 

Jason  46:21

And do your kids get to visit here? 

Susan  46:22

They all came when we first were here, but now they have families of their own and stuff, so it’s much harder. But yeah, so I’m just kind of waiting. 

Jason  46:31

And so just taking a slight step upwards and from a high level, obviously, these sorts of issues, scams, whatever you want to call them, just dishonesty I guess is the bottom line. Like what do you feel? Obviously, they’ve impacted you personally, and to a great deal, but what do you think the greater impact is on the community of these types of issues?

Susan  46:54

I don’t know. That’s a very good question because we’re the ones that are kind of invading the culture here. They’ve lasted fine without us coming in and so it is, I think I know that the gringo maybe, Americans and Canadians, have had a negative effect in some ways because they bring the prices up because they overpay. But they don’t know because they’re being told to overpay by people. So, then the land gets outpriced for the locals so you’ve got those issues which are not good. And then the Gringo’s, they do bring some businesses and they do a lot I think to help the economy too. But it goes both ways so I don’t know, I think Ecuador’s probably better off that the Gringo’s came here cause they’re now we can buy organic kale, of course. 

Jason  47:45

But if there is this prevailing attitude, at least amongst some gringo’s that I meet, that they just have this walking target on their back and like, that’s for me, that’s not a healthy way to live, like that’s not an enjoyable way to know. 

Susan  47:56

And there are so many wonderful Ecuadorians. 

Jason  47:59

That’s part of the conversation that we haven’t even touched on, you know, like, obviously, yeah, you’ve had some bad apples and they do tend to spoil the whole bunch. But I don’t want you at home thinking that absolutely everybody that you come across here, especially if they’re Ecuadorian, they’re just out to get you. That’s certainly not my experience. 

Susan  48:16

The biggest thing too, and I’ve heard people mention it and I’ve heard people quote, people who had worked with me, and it’s just that if they, you can make yourself a target. And I didn’t mean to, but I thought I had an attorney and a realtor and I was like, OK, I want to purchase this. I want to find a farm. It was very foolish to do that. Maybe just buy one property and then have a completely different person and not ever give on. I mean, the fact my parents had passed away and I had money to invest was very naive to have people realize that. 

I didn’t say it directly, but then I was like, oh, you know, these people, they have all this money. It would always be better, I think, to drive a humble car and wherever you live is fine but to make sure nobody knows if you have this much in a CD or this much that you’re looking to invest. You’d want to be extremely careful who you tell because then you do have a target. I mean, if people are saying, “OH, that person.” Because then someone else comes to you and they are a friend of the realtor or a friend of the attorney and you end up getting passed around. You think that these are people who are supposed to help you, but they all have been told to basically take advantage of you because you have money. So, we’ve heard that quote back that, we were told that was going on when we did the remodel. So, if you’re doing something like that, which is right in town and remodeling an old building and we got a beat up, ugly old building for a really good price. But then once we started the work, it was kind of like, oh, these guys, aren’t they? Yeah, we had a lot of people aware that there was all this money going into it that was very bad. You don’t want to do that again. 

Jason  49:59

So obviously having some unbiased second opinion is probably going to cut through some of these issues. The question, million-dollar question, is how do you know that that opinion is unbiased in a particular circumstance? Especially if your name’s been passed around some sort of unofficial list? 

Susan  50:17

Well, and then everyone says I have a friend or someone that’s just say looking for a pasture for their horse or something. They’ll say don’t mention it’s a gringo. Like don’t mention a gringo just have an Ecuadorian say, would you rent your pasture or do you have a house to rent you know, that sort of thing. Don’t tell them it’s a gringo. 

Jason  50:34

The negotiation culture, is really tough. Even if gringos know the negotiation culture, you’re going to turn up and you’re going to be at that immediate disadvantage because of those preconceptions that you’re talking about. 

Susan  50:44

So, someone else kind of made all the deal for you though because you know, or bought the car for you or I mean, I think if I did buy a house, I’d probably have an Ecuadorian friend buy it, then I’d buy it from them and pay the extra because I’d still be saving money to not be the gringo buying the house. So, you’re just dealing with a completely different financial system if you’re in that category. 

Jason  51:07

Something you said before that resonated with me. You mentioned when we’re inside that one of the things that you wanted to do was effectively set up these seminars for people – this is our experience or you know, these are the things to look out for. 

Susan  51:20

Yeah, and it was, yeah, not in any kind of negative way. It’s like, here’s how the attorneys work here, how here’s how real estate works here.

Jason  51:27

Here’s the lay of the land here’s how good or bad. Yeah, it’s what you need. 

Susan  51:30

The visa thing, here’s how it works and so that they understand that and have people come from the visa department, have attorneys come, have realtors come and talk. But ones that are willing to explain how it really does or it doesn’t work. So that was the idea. Yeah, just education, that’s all. 

Jason  51:45

I like that. What role do you think the community has I guess in trying to steer people towards the results that you know aren’t based on dishonesty or overpaying or something like that?

Susan  52:16

Probably what we were just saying was education. If someone would have to kind of sponsor that and know there’s one attorney here that has tried to do that. Like, do talks on getting visas and stuff, which is very good so just being able to expand that. 

Jason  52:31

So, do you think more of those workshop-type approaches? 

Susan  52:33

Yes, and I don’t know, I’ve always thought it was a small percentage that really did come with, you know. Most people want to rent and most people don’t even want a car, right so they’re really going to be fine. 

Jason  52:47

The people searching for land, in my experience, they’re the ones that really need a lot of assistance. 

Susan  52:52

Right and just to let people know, even if they’re not thinking of buying a home, I mean, just being more educated about the legal system. If somebody broke into their house, if there were issues, like just understanding all of that stuff and what’s legal and what’s not legal. Which can be very confusing. Like I was saying, I was giving power to someone and so people tell me that’s legal, that’s not. And then just, and then people like this road. I’ve always been able to use this road, but someone said that one of the people on the road could actually block the road, but then that would be illegal. But it could take two years before it went. You couldn’t get to the property and then. So, there it’s just to be savvier to understand how things work and not. 

Jason  53:34

I think when it comes to land purchases, it is very important to slow down and I think a really good approach for a lot of people is kind of something that you were almost doing. I think, basically buying a condo or something like that in Cuenca, something that is effectively less risky, if I’m being honest, just in terms of all the different things that can potentially go wrong. I’m not saying that those deals can’t end up poorly as well, but you’ve got a much smaller section of potential issues there. 

So that is definitely one of my suggestions. Whilst you’re learning the culture, you’re learning the rules around what you can and cannot do for the land. But if you’re hell bent on just owning land and not a condo, then come here, rent for a while, and use that time that you’re renting – the year contract generally that’s what they are. Use that time to do some scouting around for the land. 

Jason  54:21

Time to figure out the pricing of the areas that you’re interested in because the price per square meter, differs a lot. And this is really hard for me as an agent, to set those expectations with people around. 

OK, this is why the land is going to cost $150 per square meter here. And here’s why it costs $6 per square meter here. We’re not talking huge variances in geography, you know, like less than an hour away from each other, but very, very significant differences in value. And it would be very easy for me, if I was that way inclined, to oversell something that has, you know, $6 per square meter at $12 per square meter. That would be quite easy but obviously, when it comes to the agents and the ethics side of things, this is probably one of the main messages from the video is that there is no code of ethics here. 

It really is buyer beware when it comes to your purchases and something that you said before about the proactive nature that just does not really exist in Ecuador. I think that is a very, very good point to sort of maybe leave this conversation with because I myself, there’s cars – mechanics. That’s probably the best example that I have. I know nothing, maybe I shouldn’t be saying this on camera, but I know nothing about cars, making myself a target, but I know nothing about cars so I’m always at the behest of the mechanic to treat me in the right way. But I have learned that I cannot do that. Yeah, I now have to be a little bit of a mechanic. To go in there and say this is what I want fixed. But if that thing doesn’t work, then you need to look at this other thing, just go check out that.

Susan  55:59

That’s good. See, ok. 

Jason  56:01

Well, I mean look, I’m not good at it. I’m terrible at it and it takes more time, but I’ve just learnt that that is the cost of living here. 

Susan  56:07

That’s true. That’s a good point because I think in the States we do have well… and in the States, you can turn in and the attorney could lose his license, the real estate agent could lose their license, the car dealership, you could sue people. There’s kind of a that keeps people more in line, even if individually they wouldn’t mind cheating you. They don’t want to lose their job, they don’t want to lose their license. So, you have more of those just in place that keep people more honest. Here, they know how hard it is for someone to go after them and there are actually a lot of laws protecting them. 

Jason  56:38

Especially for someone who doesn’t know the system versus someone that is using the system to hide their dishonesty. It’s a really tough place for you to be in. 

Susan  56:47

Right and then people will say, oh, we’re going to sue this person. Well, I’ve heard that almost never do gringos come out on top, but I don’t know how that works. 

Jason  56:56

It can be a bit of a coin toss sometimes when you go down to the courts. 

Susan  56:57

But it’s just and Americans, I think, can be a little bit sue happy because the States like to sue him, sue him, sue him. We tried a couple times and we realized that we were just then putting more money to someone that had no interest in bringing us our money back, just taking money to have the lawsuit go nowhere. So, then it was like, I’m not going to do that anymore. I give up. 

Jason  57:23

You’re just done with that. Yeah, I understand. It’s beaten you finally. But I just want to finish this, on your future plans here. You’re going to rent a place for a little bit of a time, take some time out, but any other plans for Cuenca or Ecuador, you’re going to stay in the area I’m assuming?

Susan  57:37

That’s a good question. Yeah, I don’t know. I’d love to be close to my kids in the States, but I do think it is a bad time to move back to the States. There’s just a lot going on that isn’t good. And so, I don’t want it. And, just the price of real estate is so insane or rentals and everything so I’m just like, OK, I’m going to visit, I’ll visit family and just stay here. And I do love the country and I have lots of friends and I’m very happy here so I think it’s just finding the right place for me and then being able to travel, which hopefully even if planes are falling out of the sky right now, that’s OK. There are a few issues with that, but I’m Careful with Boeing. 

Susan  58:17

Right, right, exactly. So, then I would just travel more so I would travel more to see family, but keep my base here because I really love it. I like the country. I do like the country. 

Jason  58:27

I mean, I love it out here. You’re not moving too far from the country, right? 

Susan  58:30

No, my rental is very close so it’s awesome. 

Jason  58:33

Yeah, that’s great, well, I’m really glad that you’re staying here because it is gorgeous. I love coming out here and thank you very much for your time.

Susan  58:41

Yeah, I’m glad we could talk

Jason

Thanks, Susan. 

Jason  58:43

Awesome. A big thank you to Susan for sharing her story with us today. I did say at the start of the video that this was not going to be a feel-good story. I do wish Susan’s outcome was different, but Susan remains so upbeat and positive about her journey. I truly admire Susan for this resilience and for choosing to see the good in every scenario. The other clear message that I’d like you to walk away with is just to be very careful when it comes to trusting anyone. When large sums of money are involved, the temptation for a quick buck can be too much and you as the buyer will ultimately lose out. The main driver for us at YapaTree Properties is to provide you with a safe, fair, and easy buying process and our hope is that over time other agents will also see how we are being successful by introducing fair and ethical processes and hopefully, then they will follow suit. Now will it work? I really do not know changing anyone’s behavior is always tough, but we are certainly trying. 

If you are interested in our buyers agent service, I do suggest checking out this video. Thanks a million for watching and have a great day.