Seaside Mariana

Hi Jimmy K. 

Welcome to Central America Forum. 

I searched and easily found the main website for the investment opportunity you mention: http://www.seasidemariana.com/. This is the first time I've heard of the project(s).

The first thing I want to say is that this forum (Central America Forum) is open to participation from any member.  We welcome and will include perspectives - even from anonymous users - provided they are relevant to Central America, not illegal, and civil (meaning free of foul language and personal attacks).  We differ in this respect from many other online Nicaragua forums, including nicaliving and therealnicaragua among others, which allow personal attacks and censorship so long as the result appears to support the political and economic interest of the website owners.  We also differ in that your contributions to Central America Forum are fully your own.  We allow you to modify and delete your content in the future.  In this respect, we also differ from other forums, where the moderators manipulate their content and refuse the original posters permission to remove content.  We indeed respect copyright laws and the rights of the original posters to their copyrighted content, something that does not happen at nicaliving or therealnicaragua.

Now let's take a look at a few items from the Seaside Mariana website.

Nicaragua displays the same opportunities and possibilities that marked the beginnings of economic upswings in Costa Rica, Belize and Panama. The real estate investment opportunity is similar to Costa Rica 20 years ago and by arriving early in this emerging market investors can expect superior capital returns.  (http://www.grupomariana.com/contenidoview.php?menu=1&smenu=9&id_contenido_textual=119)

This is the kind of misinformation that I wrote about in my article on how indeed Nicaragua does deserve its negative reputation, despite the hype to the contrary.   Unfortunately, the "New Nicaragua" was a pipe dream many people had from 1990-2004.  It was a nice dream, and inspired by it I bought a farm in Nicaragua and tried to build an international peace and ecology center.  The dream goes like this.  The Sandinistas apparently relinquished some power in 1990 (although in fact they stole vast amounts of public property in the piñata).  Then after several successive administrations, Nicaragua showed that it was even ready to throw its corrupt politicians in jail, as it did with former President Aleman in 2003.  Real estate prices rose tenfold in many areas from 2000-2004.

But the dream has been uncovered as a fantasy.  Ortega and Aleman pulled off a constitutional change (that then-president Bolaños considered illegal) that, together with Ortega's control of the electoral branch of governmet, allowed Ortega to retake the presidency several years ago.  Then, as we witnessed four months ago, Ortega engineered fraudulent electoral manipulation to gain control of yet another branch of government, concluding with a coup that released Aleman from jail and gave Ortega control of the final branch of Nicaraguan government (see Chamorro's analysis of these events, or our own articles on Nicaragua's voting fraud in the municipal elections and our discussion of the latest on the Aleman Ortega Pact).

Politically, compare this situation with Costa Rica twenty years ago.  Costa Rica had been more democratic, and had abolished its army.  In Nicaragua, the army is controlled by the Ortega family, and the country has reverted from ten years of some Democracy to its long history of Dictatorships.  While both Costa Rica and Nicaragua have been good at holding out the hand for foreign investments, Nicaragua - especially under the Sandinistas - has held out the hand to investments from Chavez, the Soviet Union, Iran.  Did Costa Rica court this type of partner twenty years ago?

Compare the Nicaraguan investment climate with Costa Rica twenty years ago.  Take a good hard look at the graph I prepared with gapminder for Nicaragua versus Costa Rica.  Click on the link, go to gapfinder, and play around with the charts.  Does the chart for Nicaragua now resemble Costa Rica's twenty years ago?

Perhaps, then, Seaside Marina would like us to believe that their resort can be successful even if Nicaragua is not successful?  There is only way this could temporarily happen: they could potentially market themselves by using the ponzi scheme sales tactics, rewarding a very small number of early investors with the "investments" of later investors.  Unfortunately, as Buffett also says, you only find out who is swimming naked when the tide goes out.

Suppose, however, that you actually believe that of the $350,000 per share price for the shares of the Seaside Mariana are worth buying.  Suppose you don't mind the 30%-40% commission that the smooth talker you met in London will receive.  Suppose you don't mind the 10% up front and 5% annually that Ortega and friends will take.  Suppose you don't mind these things because you are a "long term investor" and believe that Ortega will peacefully leave power in three years without "peacefully nationalizing and then privatizing in his name" the investment you think would be nice for you to own.  Suppose that you believe that some uncorrupt politician will beat the massively-rich Ortega and Aleman machines in the next Presidential election in three years.  Even if you believe all these things, you should certainly do your due diligence personally, and I'll tell you how.

First of all, you should get a copy of the last thirty years of property deeds for the entire property supposedly owned by Seaside Mariana.  This will cost about $100 for registry fees plus $200 for English-speaking lawyer to get from the registro in Diriamba (a local Spanish-speaking person could get it for about $50, but just spend the $300).  We will post the entire history here on Central America Forum.  The reason for this is because many of these pseudo-resorts have flimsy titles, and are much easier for the governments (Sandinista and others) to confiscate.  When we have that online, we can look at it together.

After that, you'll need to personally talk to the former landowners and neighbors to find out the personal history of that property.  We can talk about how to do that when you get to that step.

Finally, I recommend that you investigate with 5 different lawyers the current and prospective laws concerning property near the ocean, especially with respect to the specific parcels you are talking about as investments.

I also welcome the participation of representatives from Seaside Mariana to participate here in the discussion we are having.

If you have not also joined nicaliving and therealnicaragua, I encourage you to do so.  Please post the link to this thread and your questions there, to get a broader range of perspectives. 

As a post-script, let me add one last note.  Maybe, like some of the other "investors" in Nicaragua, you actually do not care about the safety of your investment or getting a return on it.  Perhaps you just want to do something good for the country while having an adventure.  If this is the case, let me recommend that you consider carefully how much of the cash from these schemes trickles down to the local economy, and what kind of culture results from that.  If you are just trying to reallocate excessive resources and do something good for Nicaragua, many of us here would I'm sure be happy to participate in a discussion of whether that is possible, and if so, how to do so effectively.

Peter Christopher