Deep Dive Into a Lawsuit Against a DR 🇩🇴 Developer

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Welcome to the Grubernation Weekly Newsletter!

I share information, tactics and tips for moving abroad, living your dream and EVERYTHING in between.

In this week’s edition:

• Deep Dive Into a Lawsuit Against a DR 🇩🇴 Developer

• Watching the Super Bowl in Paradise

• 12 Essential Dominican Republic Travel Tips

If you need help with finding your dream property in Dominican Republic, feel free to request a realtor I work with by filling out this form. You can also talk to someone about the investment I’m making in Cortecito with Boardwalk by filling this form out. As I always say, if you opt to close on a property these referrals will pay me a fee. Please do your own due diligence and trust your gut!

Deep Dive Into a Lawsuit Against a DR 🇩🇴 Developer

I was informed of a lawsuit filed recently against a developer locally in DR.

To be clear, I am not involved in this suit, I have no idea if it’s legitimate and can only say factually that a suit was filed in DR courts.

The complaintants are buyers of multiple developments along with the real estate brokerage that appears to have been part of the promotion.

A lawsuit filed is NOT confirmation of fraud or guilt on the part of the developer, therefore I’m not disclosing the name of the involved parties here, nor will I respond to emails asking for the ‘nudge wink’ names.

Don’t waste your time.

Where I do want to focus instead is honesetly on testing my own standards for investing in Dominican Republic against what could have been known about this developer.

To recap, I have 3 key rules for investing in real estate in both the United States and Dominican Republic.

Here is my current experience with real estate investing:

• I have bought and sold 41 of my own units in the US, am invested as both a general and limited partner in 250+ units in the US, and I’ve raised a few million dollars for those deals.

• In the Dominican Republic, I’ve invested in one project with Boardwalk (1 bedroom condo in Cortecito) and have agreed to promote it in exchange for referral fees that will be deducted from the price I’m paying.

I followed my 3 rules with ALL of the investments above.

The one time I didn’t follow those rules, I invested $35,000 that I’ll never see again.

Here are my three rules:

• Make sure the principle/developer is local to the project

• Make sure the developer/prinicple has gone full cycle in that specific market

• Make sure the developer has ‘scar tissue’

To be clear, I have some more rules around length of debt terms, percentage of equity raised vs. bank debt and I target very boring, basic returns after a long hold instead of those that have a focus on velocity of capital.

After researching the complaints, I found this portion of an article in Diario Libre…

There are 2 things I took away from this write up:

1. I’m even more certain about the advice to strongly consider past performance in the market when investing in a project

2. Dominicans have so many names .. I mean just look at how big those black boxes are to redact the owners. Sheesh

Jokes aside, I’m not happy about this experience for those investing nor am I spiking the football using their pain as an example.

There was one profile done of an older mother who had to stay with her son who is allegedly losing his money with this developer because of the depths of depression he’s struggling with.

All I can do is learn from my own past experiences along with the lessons from others in this new market I’ve entered in DR … and share with you.

That said, we as investors or potential investors have some responsibility for the scams that take place.

Most of the investors in this and other projects are Dominican Americans.

I’ve said to my wife over the years something like ‘oh they must be right because they’re Dominican’.

Moving here, I see that trust exists beyond just my wife or her family as a way of being.

It’s beautiful, but it also leads to trust based on feel or sense of belonging.

In this case, the agent promised buyers that the developer had depth of experience around the country.

“Great - can you show me the completed projects and show me the name of the owners of the development company?”

There’s more like where is it written, what’s the document, what are reviews on the projects, what’s the reputation of the builder with buyers, what buyers can you talk to that are in a completed project, is the agent giving you false names for a different develoepr and then explaining a name change, can you get a copy of the official business documents for the developer, etc etc etc.

It’s not easy to do due diligence, but it’s essential!

And whether this proves out to be a scam, I can’t help but wonder what would happen if collectively all of us investing here started asking these questions.

Would there be less fraudulent developments?

Would there be a higher standard for builders?

Would there be a better reputation in country?

This is an unregulated market which places responsibliity on you and me to vet opportunities before investing.

I think overall that’s a good thing, but we have to be better.

I’m in no way victim blaming these investors. Rather I want to use their experience as a cautionary tale for myself and others - ask questions!

Nothing will eliminate the risk of getting scammed, but boy we can reduce the chances significantly with just a few questions asked.

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The $35,000 I lost was because I violated my third rule - scar tissue.

The developer I invested in came out swinging around 2016 and grew fast and became highly organized.

• They were on all the big shows

• They had reputable people promoting them

• BUT they’ve never operated in a down market

In addition, they had highly leveraged and short term debt terms which both are a big no-no for me.

But that’s more relevant in the US than DR.

My hope is you read this and come away scared and excited.

Scared that scams exist and this may be one of them and a blatant, big one!

Excited that 3 standards may be proving to be a really simple starting point for analysis and will eliminate a LOT of projects from contention, or at least lead you to ask other questions to gain confidence before investing.

Just because a developer is doing their first deal in country doesn’t mean you shouldn’t invest with them.

But that should generate additional scrutiny on their financial position, their experience in other markets and so on.

Be careful and shop smartly my friends! It’s an amazing place!!

And remember, I’m not an expert and don’t claim to be. I’m sharing my own experiences and as I learn more I’ll share more - but PLEASE be sure to create your own standards and practices for investing and scrutinize everything - including the relators I send you.

Watching the Super Bowl in Paradise

First off, I have to address the elephant in the room.

The wrong team is representing the AFC. Point blank.

I’ve had time to think about this, and Cheif fans can disagree all they want but here’s my take…

The Bills had a chance to win for sure, and a dropped difficult catch may have made the difference.

The Cheifs are a historically great team with a great coach.

Those acknowledgements aside, given they’re a ‘great team’ playing on their own home field means they get that 12th man advantage.

Now when you add in an extra series (blown 4th and 1 call) and 20 additional yards (Xavier Worthy ‘catch’) you’re demanding absolute perfection from the visiting team and that’s unfair.

If I said ‘you can play the defending champions on their turf but they get an extra 20 yards and an extra drive’ you’d call BS!

So I am!

But hey, Taylor Swift generates $331m/year for the NFL, so why not make sure the Cheifs are in the Super Bowl.

Ok ok - it’s out of my system. Can’t wait for the Cheif fans who know both were bad calls to give me the ‘you had a chance to win’.

Look, if watching this upcoming boring ass game is on your docket and you happen to be here in Punta Cana, there’s a Super Bowl party at Playa Blanca you should check out.

Will I be there? No.

My family and others locally are getting together at a local spot we enjoy to hang out while the game plays in the background.

Enjoy the “game”.

12 Essential Dominican Republic Travel Tips

When is the best time to come to DR?

Where should you visit?

What are some things you should bring?

Should you rent a car and with whom?

In this video, I provide a comprehensive outline on traveling to DR in 2025 and beyond! These tips are next level (if I do say so myself) and I give specific advice on 5 different areas where you can vacation.

Let me know if any questions!

I hope you enjoyed this week’s newsletter. If there are topics you’re curious about, feel free to send along. See you next week!