Trump and Elon's Impact on DR 🇩🇴 Real Estate

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Welcome to the Grubernation Weekly Newsletter!

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

In this week’s edition:

• Trump and Elon’s Impact on DR Real Estate

• How to Buy in Dominican Republic

• I Investigated the BIGGEST Real Estate Lawsuit in DR History

   

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Trump and Elon’s Impact on DR Real Estate

Seems quiet in the United States .. NOT!

Here’s what I see:

• People love that DOGE is slashing federal spending

• People hate Elon for having access to info so he can slash federal spending

• Trump imposes 25% tariffs on key trade partners

• Trump delays those tariffs on key trade partners

• Fed reports a .5% increase in inflation for January

• Fed signals a hold on rates (no cuts, no raises)

• Americans feel GREAT about large scale tax cuts

• Americans are MAD that billionaires are getting tax cuts

I wonder why I stayed in Dominican Republic 🤣 

Here’s a deep dive outlining the impact of all of this on Americans with an analysis of what it means for anyone looking to buy in DR. 

The objective is to answer two questions:

1. Is it best to buy now?

2. Is it best to buy later

Scenario #1: Trump Implements Large Scale Tariffs

The administration has imposed reciprocal tariffs on all countries equal to the tariffs they charge the United States.

He has imposed a 10% tariff on China (we’ll see if it’s a bargaining chip to get China to pressure Russia to end the war)

He has NOT yet implemented a 25% tariff on Canada and Mexico (and I’m not sure if he will)

The threat of tariffs alone do create uncertainty in other economies for foreign investment.

CBC News in Canada did a report showing that many foreign investors are not expanding in Canada or even moving operations to the US or ‘non-tariff nations’ (like DR?) just because there MAY be tariffs imposed.

That’s significant.

In all these scenarios, tariffs will certainly increase consumer pricing and therefore increase inflation. 

Increased inflation means higher interest rates sustained in the United States creating less demand for housing and stagnant or possibly even slightly lower retail real estate pricing.

IMPACT ON DR: This scenario would likely fuel real estate prices in Dominican Republic. 

When investors aren’t able to place capital they look to other markets. 

With DR’s tax friendly real estate laws, growth in the tourism sector and stable/growing economic and political environment, there’s likely to be an increase in investor interest in DR and similar markets 

Scenario #2: DOGE Cuts $1T in Federal Spending

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Elon Musk pledged this amount recently from the oval office.

Whether you like him and this administration or not, I think 100% of tax payers aren’t fond of millions being spent on ‘condoms for gaza’ or LGBTQ plays in Serbia. 

As more and more news comes out, the ability to cut the federal spend annually by $1T doesn’t seem unreasonable. 

When spending is reduced it creates less supply of capital and therefore inflation would decrease. 

If you couple federal spending cuts which would be deflationary with tariffs which would be inflationary, there would be some offset. 

If cuts are deeper than price increases, then we have stable to lower levels of inflation. 

If price increases outpace spending cuts, then we have stable to higher levels of inflation.

Let’s call it neutral and we’re right where we are which is a stable rate environment.

IMPACT ON DR: This is where it gets interesting. 

There are two different subsets of buyers in Domincian Republic and they both create massive demand.

If interest rates go up because of tariffs and inflation, then investor capital moves overseas to places like DR.

If interest rates go down because of spending cuts or less aggressive tariff policy, then investors are likely to keep their capital in the United States.

However, deflation and lower rates mean more discretionary dollars in play for regular consumers to vacation more and buy the dream while in Punta Cana, Cabarete, etc.

When developers offer very easy financing terms like they do in Dominican Republic, Joe and Sally feel confident putting some money down and making a purchase with payments for the next few years while their dream condo in paradise is being built.

Now let’s answer the question:

Should you buy now or later?

• If interest rates go up, investors move capital overseas increasing values

• If interest rates go down, consumers visit and buy overseas increasing values

“Ok Jamie, you love DR and you refer to these realtors – so OF COURSE you’re gonna say to buy now no matter what”

I understand that sentiment but I have two anecdotes that give me confidence in my analysis.

#1: History of values in DR – since 2000, I see no evidence of a massive correction in the real estate market. Quite the contrary.

In 2008 during the global financial crisis, the world and Dominican Republic stopped. 

But from that was born the idea of ‘seller financing’ in Dominican Republic.

The boom was developers financing construction projects which kept DR and Punta Cana chugging along.

The same happened in COVID only that time, remote work and the great resignation led to people moving to DR full time or for a chunk of the year, not just buying.

Through all these different cycles, the cost per square meter has seemingly gone up or at worst remained flat. 

Any downturns were very short term.

#2: The Palladium Travel Club

My wife and I were on our ‘babymoon’ in Jamaica in early 2015 before our first son was born.

Rates were low, we all had money in our pockets and SOMEHOW I got pulled into a room at the Grand Palladium and told I could buy their travel club package for a mere $15,000.

I had NO intention of dropping thousands of dollars while on a vacation I already spent thousands of dollars on.

But my wife batted her beautiful eyes, said she thinks it’s a good idea and I therefore, we dropped the credit card down and paid.

(Dude was a REALLY good salesman too haha).

That’s what happens when people visit DR. They get that blue sky in their eyes, that white sand and crystal clear water in their soul, the smell of the ocean in their nose.

Who WOULDN’T want to buy?

Heck – that same $15,000 could be the down payment on a $100,000 condo downtown if that same scenario presented itself today! 

I could justify the $1000/mo payment for the next 2 years and then I’ll just borrow $50,000 from my 401k at the end and VOILA! 

When I look at these 2 anecdotal scenarios, it just makes sense to me why in either case, demand stays high for property in DR and therefore the time to buy is now. 

By the way, that Travel Club membership has actually worked out really well. We have clearly saved money on vacations and travel with it even if it means we feel ‘locked in’ to Palladium when we go to a resort. 

She’s always right (don’t tell her that).

For this newsletter, let’s do a part 2 on this and talk about HOW to invest if you agree now is the time to buy – but you don’t want to get taken advantage of!

How to Buy Real Estate in Dominican Republic

When it comes to investing in Dominican Republic, the first question is ‘where’.

I’m going to demonstrate where with some animations below to clearly show you how I’m thinking about this.

The objective for all of us is to NOT get scammed on the investment we make. 

I hope this helps give you a sense of direction and clarity on where you should be investing.

Knowing where to start can be super confusing. EVERYTHING looks amazing in the brochures and every location is touted as the ‘best place to invest right now’. 

It kind of feels like this…

First step – Eliminate the ‘too good to be trues’.

In Punta Cana, when you see ‘$50,000 for a condo’ your radar should be up. 

It’s either NOT in Punta Cana and instead is in the middle of a neighborhood like Veron or Friusa which is not where you want to invest 

Or, it’s showing as being ideally located and is a flat out lie or scam. 

So we get rid of those and it looks like this.

Second step – You Meet With a TOP Realtor

Everyone here is in real estate. 

But there are only a few that are TRULY in real estate. 

Most realtors have multiple hustles. They own a store, they drive Uber, they work at the school part time, etc etc.

But let’s say you select a professional knowledgeable realtor (click here for a referral to one I trust).

That person will be able to provide you with the right investments for your budget.

Don’t get me wrong – they want to sell you the thing that gets them paid but the pros know reputation matters more.

So while they’ll push their exclusive product, there is much much less of a chance that the product is from a bad developer. 

For me, I bought a condo in Cortecito and routinely get blasted for it by many. 

‘the roads are a problem’

‘the drainage needs to be fixed’

‘the color of the building is ugly’

‘there are solicitors there’

The agent, however, is Cheryl Henderson who is probably the most reputable agent in the entire country. 

And she has a development company building in Cortecito called Boardwalk.

If you want to connect with Boardwalk, just click here.

Because I’m here and see the opportunity, my top target for investing in DR is Cortecito. 

Perfect fit.

The TOP realtor gives you clarity on where to invest.

Now it looks like this

Third Step – You Hire an Independent Real Estate Attorney

How exciting is this? 

You got a few options presented and found something that you really like in your budget. 

The realtor is responsive, providing you great insights and making sure you have everything you need. 

You drop $5000 to reserve your unit and sign the agreement (not the contract)

The contract is presented to you outlining the terms of ownership, the down payment amount and monthly payments. 

That’s when you hire an INDEPENDENT REAL ESTATE attorney! 

The real estate attorney reviews the contract, doubles down on vetting the developer and provides you with advice and counsel  for how proceed.

This includes modifying contract language, showing you tax records, deeds to prove the developer owns the land, etc etc.

Now that the attorney has done the due diligence and negotiated the contract, then and ONLY then are you ready to sign.

Now, it looks like this:

Now, will all of this GUARANTEE you’re not scammed? 

No – but NOTHING in life is guaranteed.

Does this GUARANTEE the project won’t be delayed? 

Of course not – in fact, plan on that happening (here, in the United States, or anywhere that contractors exist. They’re ALL manic and ADD haha)

But as you can see, by using this process you remove all the noise and naysayers in your life.

You cut through the crap Bavaro Digital or Listin Diario serve up daily.

This process above allows you to be CONFIDENT that the project you invest in is as good as can be and has an incredibly high likelihood of being delivered on time or close.

Summarizing …

• Stop chasing ‘too good to be true’

• Get a TOP REALTOR

• Hire an INDEPENDENT ATTORNEY

Enjoy your new place in paradise

I Investigated the BIGGEST Real Estate Lawsuit in DR History!

The alleged Novasco Real Estate scam is all over the news!

In this video, I break down the timeline of events, current status of the lawsuit and review the offer that was made against my own criteria to see if it would have been something would have gotten by me!

I think this is an important video to watch and I’ll update as I learn more!

That’s a wrap for this week - appreciate you following along and as always, email me with questions.