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Thoughts on First Luxury Project in Chapala?


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10 hours ago, Newjersey expat said:

Yes, lets build and build!   and make money! The boomers are coming and more Mexicans come on the weekends.  AND let us forget about infrastructure such as  water, sewage , even traffic lights that are not replaced until there is a horrible accident. The streets have double basketball pot holes. You may not see them because they are not on luxury lane. The trip from Chapala to the west end takes forever.  Figure out  how long it is from La Christina to Hildago and then see how much time it takes to travel it..  So, am I in favor of building and more building? No, not without guareented changes to accommodate more building.  After you made your investment money, did you ever go back and if the area could actually support it?   People buy here and then learn about places where water has to be delivered. Even better the 4 way at Pronza restaurant  had one functioning traffic light for how many weeks???

People have different definitions when they call this place paradise, weather usually being number one. But I don't think to many will say I can buy or rent a luxury place to live. 

Yes, to answer your question I have.  In every single investment property I have purchased, I actually constantly go back and actually use it.  It's not just a straight investment as I utilize it as well.   In many of these areas as luxury projects like this came on board, it usually spurred other higher end projects which spurred growth to the economy as nicer restaurants opened up, improved roads and parks and general investment in the area.     I don't buy to live in these properties.  My typical rental property has 7 days or less stays.   Honestly, this would be a wild card because I am confident I could rent it out every single weekend but I'm not sure how high end rental would be during the week.   I just don't know if people from Guadalajara travel much mid-week.  The locals are NOT my target market.

 

5 hours ago, cedros said:

Interesting. I have never heard of that before. Where are the holding tanks emptied to?

 

My friends that live there said they haven't experienced this but as mentioned, I'll go there during this time and see.

 

2 hours ago, Mainecoons said:

I think what we are trying to tell you is there really is nothing that fits this criteria locally at this time.  The closest thing that comes to it, and the construction has been stopped by legal action that will drag on for years, is that partially completed project on the shores of the lake in La Floresta.  I'm a real estate investor as well and I wouldn't touch that San Juan project with a ten foot pole given the poor location.  Frankly, Radisson Blu or the building next door aren't much better IMO.  Anyone who lives in either is going to get to listen to the trucks without mufflers using their jake brakes quite regularly.  

You may or may not be aware Zapopan has the fastest rate of real estate appreciation in Mexico, as much as 15 percent in the good areas.  We recently bought an apartment there both as a place to house students from Oaxaca we sponsor and also as a good investment.  As you have invested there, I assume you are aware of this as well.  However you should also be aware there is a serious glut of high end high rise property there, particularly in the Andares area.  It is going to take some time to absorb that.  Right now, a lot of those new buildings are empty or nearly so.

Well located single family is the right investment for lakeside for now and into the foreseeable future.  Lakeside's biggest problem as NewJersey alluded to is infrastructure and this is exacerbated by very bad, even by Mexico standards, local government.  Let me assure you the trashiness, potholed streets and general lack of maintenance you see in Ajijic and everywhere in this municipio outside of Chapala is not normal for Mexico as you would see with even a modest level of travel in Jalisco and around the country.  I tell people to visit Mazamitla and Tapalpa to see towns that cope well with heavy tourism and I could suggest a dozen more examples just in Jalisco.

A reform party has taken control at both the state and local level and they seem aware of the failings, so we will see if there is any change for the better.  NewJersey is right, this area is not coping well with the rapid growth and all of the infrastructure, particularly roads, has deteriorated badly in the last 10 years.  It hasn't appeared to dampen the enthusiasm to live or visit here yet, but at some point without major improvement in the provision and maintenance of infrastructure I would expect it would.  Retirement "paradises" are a very competitive part of the real estate market and when things reach the point the bad publicity starts and proliferates, the perception of attractiveness of an area can change overnight.  Acapulco comes to mind as a good example.

 

 

Great post.  Thanks for sharing.  Yes, of course I'm aware of the rapid appreciation in Zapopan. In fact, I purchased my property in Zapopan almost two years ago when they were just starting to build it.  It too experienced great appreciation.  The value on it went up over $100,000 US just during the 2 year construction phase.   I got a further discount as I paid almost all of the money upfront to lock in a good discount.   The developer was a friend of mine so I had comfort that it would finish on time.  I'm renting it out now and it's been doing extremely well.   I don't rent to students.  One thing I noticed is there are a LOT of rental apartments on the market but most of them have no furniture or the furniture in the ones that are furnished are not that great.   So I go the opposite end and furnish very high end and go towards renting to wealthy and corporations that send their employees there for business.    Less wear and tear and they are mostly out all day.

Thanks for confirming that nothing fits the criteria of Alto Lago.  I looked and looked but couldn't find anything at all.  This is also why I believe it would do very well as a luxury rental.   No real competition at all for what I want to create with the rental. Here is a floor plan for the unit I'm considering.  4 bedrooms with in-suite bathrooms and a great view of the Lake with private plunge pool in the Penthouse balcony as well as a pool in the building overlooking the lake.  The building has full service amenities like gym restaurant/bar.   For the typical Tapatio with some $ that is going for the weekend I don't think I'd have a problem renting this out at all.  You essential "sell" (rent) out the property with photos and amenities of the property and building.

 

I REALLY appreciate all of your comments as it's educational for me.  Although I've purchased hundreds and hundreds of properties around the world.  One thing I realized early on is you never stop learning and getting good information and thus my purpose of posting here and asking for input.  It's greatly appreciated and helpful.

 

Penthouse Floor plan.jpg

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I am sure that you have done your due diligence... This said, I would think that Guadalajara Tapitios with the funds to rent an upscale condo would rather buy or rent a house as they have more freedom to do those things that one cannot do in an apartment setting...

Your buck and your choice and I wish you the best!

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37 minutes ago, rvanparys said:

I am sure that you have done your due diligence... This said, I would think that Guadalajara Tapitios with the funds to rent an upscale condo would rather buy or rent a house as they have more freedom to do those things that one cannot do in an apartment setting...

Your buck and your choice and I wish you the best!

I'm not done with all of the due diligence  Still ongoing.  Well, yes several of my wealthy friends own a home in Chapala or around the Lake.  But many do not.  But my friends that do own there throw some BIG parties and inevitably you have many people that go there for the weekend and not enough room to stay in their friends house.   So they have to find local accommodations and as mentioned there isn't really anything that great.  

So it really becomes an issue not that they can't afford anything really high end to stay in but not so easy to find something and that's the gap I'm looking to fill.  I have NO doubt at all I can keep it rented on the weekends for a high dollar per night rental.  The developer already confirmed to me they will allow short-term rentals.  But I am still trying to estimate if I can capture a few rental nights during the week.  It's an experiment but often times that's the only way to find out.   

I'm still not convinced on the location as some of you aren't.  But I want to go see it and see it for myself.  The way and location they look to be constructing I don't believe there would be any issues with flooding or foundation issues.  The reality is that someone renting for 2 nights doesn't care so much about exact location.

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1 hour ago, Rick Sanchez said:

*Cough*Border promotion*Cough*

No promotion.  I think there is a lot of great information provided as a result of the thread.  I'm very genuine in wanting to find out information and I've also been able to verify some due diligence that I did myself.   I'm going there next month so willing to look at any other areas/properties/projects that you locals recommend.  If you don't want to post on the board you can PM me privately. 

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2 minutes ago, earlyretirement said:

No promotion.  I think there is a lot of great information provided as a result of the thread.  I'm very genuine in wanting to find out information and I've also been able to verify some due diligence that I did myself.   I'm going there next month so willing to look at any other areas/properties/projects that you locals recommend.  If you don't want to post on the board you can PM me privately. 

So... you say you speak Spanish, have "purchased hundreds and hundreds of properties around the world", you have many rich Tapatios for friends, and, based on your posts, a lot of money...

Then why are you asking a bunch of ex-pat strangers of indeterminate means on a public webboard about real estate investing advice in Mexico?

Based on your posts, one would think you would have many wealthy friends in Guadalajara (as you claim) that would give you the skinny on what's hot out here, and probably the inside track as well.

Sorry, you seem personable, but something here doesn't add up.

Just my two pesos.

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7 minutes ago, Rick Sanchez said:

So... you say you speak Spanish, have "purchased hundreds and hundreds of properties around the world", you have many rich Tapatios for friends, and, based on your posts, a lot of money...

Then why are you asking a bunch of ex-pat strangers of indeterminate means on a public webboard about real estate investing advice in Mexico?

Based on your posts, one would think you would have many wealthy friends in Guadalajara (as you claim) that would give you the skinny on what's hot out here, and probably the inside track as well.

Sorry, you seem personable, but something here doesn't add up.

Just my two pesos.

Because sometimes objective strangers give as good (or sometimes better) advice vs. friends.  In my experience, there is no correlation with how wealthy a person is and how smart they are or advice they give.  I have asked my friends in GDL and the ones that own in Chapala about this and they said nothing like it exists right now.   They say they aren't convinced on the location but don't go so far as to say it's a poor location for what I'm planning to do.  

They tell me definitely that there is enough demand to keep it full during the weekends (friday, saturday and maybe sunday) but they say during the week will most likely be dead.  But then again they don't know because nothing like it really on the market.

I understand that I'm a stranger and I don't personally know anyone on this board but I can assure you that I'm very genuine and I am asking from a due diligence standpoint.   I'm unsure on this investment and that's why I'm reaching out for advice which I greatly appreciate. 

Many of my friends told me I was nuts to pay almost 100%  cash up front on a development in Zapopan when it was just starting.  But I went with instinct and it worked out.   I don't have as strong of an instinct on this AltoLago property as I don't know the area well. But I'd like to think I know a thing or two about luxury rentals and what is appealing so from that perspective I feel confident I could make it.   

But I understand much of the concern and warnings is that the property will never finish.

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It was "announced" yesterday on a gringo FaceBook page that in two weeks new construction would tear down the tepalo waterfalls and build a development. It was announced today by the muni gov't that no such plans exist or have been shown for permits. So there you go.

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You need a broader view of the culture of this area, especially when it comes to our Tapatios. Guadalajara has always been viewed by the rest of Mexico as a conservative member - think Vincente Fox and his wealthy friends. Guadalajara is becoming crowded, dirty and dangerous. My doctor friend, a somewhat notorious night clubber and prankster, tells me he seldom leaves his home now - not worth getting killed for. So, where to go on weekends? The conservative choice is Chapala gated communities, especially if that their kids are married with kids on their own. Great weekends, I am jealous, they stock the house with food and snacks, then the grandkids come - riding ponies, ATV,s, terrorizing Grandpa's swimming pool and media room. Now Tapatios with unmarried children are a lot different. They seek opportunities for their unmarried for their young ones to meet the most eligible, the elite, etc. Their choice is never Chapala, they don,t want their kids hooked up with the Cowboys and sultry farmer,s girls. So they usually choose Puerto Vallarta, which more than caters to this crowd, and as they get older, ask Dad if they can use the condo for the weekend. Puerto Vallarta- playground of the rich. Fit in or die trying!

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It looks like a large 4 bedroom unit. Ideal rental for middle class Tapatios weddings in the area. They would love it for a short party stay. That is their prime recreational area on the lake. Although, my good Mexican friend (in real estate) says that she will not rent good properties to Mexican national . They are not the neatest tenants. I could also see some Mexican corporations actions to be held there if properly marketed. The Monte Coxala (upscale spa) is very attractive (unique with beautiful views) and is close by and the noisy fish restaurants in that case could be welcomed. Monte Coxala  is considered a high end "hotel"

 So.....who do you hope your clients will be???  Tapatios? This is a recreational area for Tapatios and a residential area for retirees on fixed income.  And there are us....Snowbirds and Sunbirds. We come for short period of time to escape our northern climates, cold and hot, get little jolt of Mexican culture and head back home. I know that majority of people in this category will not rent in that specific location (for many reasons) even if I also know that there is a shortage of higher end short term rentals.  Shorter than 6 months is almost impossible to find. Beautiful views are not so unique to the area. All the communities on the hill have lovely views. This building seems to be right above carretera . Sorry, at first glance (on their website) I do not see anything interesting about it.

There is a reasonably organized Lakeside Real estate business  . Few agents are long time residents (one has to dig them) and they know lakeside real estate situation well. I would talk to couple of them to get better picture (with open mind) of lakeside real estate dynamics. They might provide more information then your friends about advantages , disadvantages even dangers of these investments.

I would also like to mention that these hills are not a solid rock (as OP suggested)  and the area by SJC suffered many land (rock) slides in heavy rain in the past.

 

Good luck.

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3 hours ago, ComputerGuy said:

It was "announced" yesterday on a gringo FaceBook page that in two weeks new construction would tear down the tepalo waterfalls and build a development. It was announced today by the muni gov't that no such plans exist or have been shown for permits. So there you go.

But there is a difference between something getting posted on Facebook and another when one of the most prestigious real estate firms in the world is telling you about it.  But I do get the point you're trying to get across. 

 

2 hours ago, Islander said:

It looks like a large 4 bedroom unit. Ideal rental for middle class Tapatios weddings in the area. They would love it for a short party stay. That is their prime recreational area on the lake. Although, my good Mexican friend (in real estate) says that she will not rent good properties to Mexican national . They are not the neatest tenants. I could also see some Mexican corporations actions to be held there if properly marketed. The Monte Coxala (upscale spa) is very attractive (unique with beautiful views) and is close by and the noisy fish restaurants in that case could be welcomed. Monte Coxala  is considered a high end "hotel"

 So.....who do you hope your clients will be???  Tapatios? This is a recreational area for Tapatios and a residential area for retirees on fixed income.  And there are us....Snowbirds and Sunbirds. We come for short period of time to escape our northern climates, cold and hot, get little jolt of Mexican culture and head back home. I know that majority of people in this category will not rent in that specific location (for many reasons) even if I also know that there is a shortage of higher end short term rentals.  Shorter than 6 months is almost impossible to find. Beautiful views are not so unique to the area. All the communities on the hill have lovely views. This building seems to be right above carretera . Sorry, at first glance (on their website) I do not see anything interesting about it.

There is a reasonably organized Lakeside Real estate business  . Few agents are long time residents (one has to dig them) and they know lakeside real estate situation well. I would talk to couple of them to get better picture (with open mind) of lakeside real estate dynamics. They might provide more information then your friends about advantages , disadvantages even dangers of these investments.

I would also like to mention that these hills are not a solid rock (as OP suggested)  and the area by SJC suffered many land (rock) slides in heavy rain in the past.

 

Good luck.

This is excellent and thanks for taking the time to post it.  Yes, I'm assuming that the clientele would be Tapatios.  Retirees never are my target audience as they are on fixed incomes for the most part.  Many of my properties I charge $300 US dollars per night including the one in Guadalajara.  For that property so far I've mostly gotten Mexicans now living in the USA visiting their family in Mexico and also Americans and also several Mexican locals that rented it for friends/family coming in town to visit them.  My property in Guadalajara sleeps 6 people with 3 bedrooms so the cost to book a few nice rooms at a high end hotel would easily surpass that in many cases. And even then you can't really all socialize together, cook in a big kitchen, etc.

Yes, all of my friends in Chapala have great views from their houses but their houses are kind of dated and not that upscale.  The main thing is the view.  But the actual houses aren't anything to write home about and the furniture was also nothing special. They just use it for personal use on the weekends so I don't blame them.   One house that was really amazing that I got invited to a party once was right on the Lake with a HUGE yard.  The house was modern and very nice.  That was the nicest property I've been in there.  But the strange thing is there was an odor coming from the drainage in the bathrooms.  Also, the mosquitos were pretty bad.

Interesting hearing about all the issues with the land/rock slides.  I'll take extra precaution with that.  So it sounds like it's easier to get a list of negatives against buying in Chapala vs. buying from many of you. Can you tell me some other negatives of owning a condo in Chapala?

 

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ER,

Don't feel the need to answer all the complaints. So far, you've been accused of being an advertisement, a phony border promotion, and a greedy, environmentally despoiling developer (my phrasing). Bienvenidos a Lakeside!

There is a cadre of folks here who wish it would stay like it was 20 (or more) years ago. There is nothing wrong with that; I knew plenty of small town folks back in the States who were the same way! But it won't stay that way, and most of us have no control over how it will change. There are some professional skeptics here who deride any new project: they are often right , because so many groups in Mexico announce new initiatives without actually doing all the background work which much be done. But after a while, the skeptics become cynics, deriding everything that gets announced, and refusing to admit some new projects do get completed.

Some folks lakeside have recently noticed a growing tide of newcomers. The Gringos are more obvious, but if you look closely, you'll notice an increasing number of Tapatios willing to commute or escape for the weekend. While I appreciate the very correct comments about lacking infrastructure, what some of the comments miss is the eventual clout of Tapatios (especially wealthy ones) will inevitably lead to better infrastructure. That's how it works, everywhere. The bad news is that those making a decision will NOT be expats living on a budget, so we might not like how the government decides to fix the infrastructure problem.

Good luck with your investment.

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16 minutes ago, NoVaDamer said:

ER,

Don't feel the need to answer all the complaints. So far, you've been accused of being an advertisement, a phony border promotion, and a greedy, environmentally despoiling developer (my phrasing). Bienvenidos a Lakeside!

There is a cadre of folks here who wish it would stay like it was 20 (or more) years ago. There is nothing wrong with that; I knew plenty of small town folks back in the States who were the same way! But it won't stay that way, and most of us have no control over how it will change. There are some professional skeptics here who deride any new project: they are often right , because so many groups in Mexico announce new initiatives without actually doing all the background work which much be done. But after a while, the skeptics become cynics, deriding everything that gets announced, and refusing to admit some new projects do get completed.

Some folks lakeside have recently noticed a growing tide of newcomers. The Gringos are more obvious, but if you look closely, you'll notice an increasing number of Tapatios willing to commute or escape for the weekend. While I appreciate the very correct comments about lacking infrastructure, what some of the comments miss is the eventual clout of Tapatios (especially wealthy ones) will inevitably lead to better infrastructure. That's how it works, everywhere. The bad news is that those making a decision will NOT be expats living on a budget, so we might not like how the government decides to fix the infrastructure problem.

Good luck with your investment.

Ha, ha. I LOVED your post.   Yes, I understand the mentality and I think you nailed it on the head.  I've seen the same type of thing in many places I've invested.  Brazil, Uruguay, Argentina, Colombia and other places as well.  I do agree with you that it's a catch 22 because as the more affluent people come in and more expensive projects, it will drive up prices on real estate.  For example, even if I don't end up buying in this project. If it's a success (and by success I mean it selling out at the prices they are asking) then you will see more and more people buying land and putting up developments.  So it will be interesting to see how this plays out.  

In many areas where I invested, locals wanted the infrastructure to drastically improve but they typically don't want to see their cost of living or prices to go up (especially housing/rental) which often times can be their biggest monthly expense.  I saw the same thing many years ago when I started buying up land in various neighborhoods in Buenos Aires (especially Palermo Soho) and people thought I was nuts.  Then projects started going up. Then that drove more investments.   And just a few short years after that it became the hottest and one of the most desirable parts of the city.  Obviously MUCH more expensive now.

But you are exactly correct that things WILL change.  And most likely real estate prices will continue to go up.  I'm looking at buying another property in Guadalajara and wow have prices there gone up just since I bought my property less than 2 years ago.  Look at high end newer high-rises in the Country Club area of GDL and it's quite pricey.   As another poster mentioned, in Zapopan (which is really the only area to really expand as most of the land in GDL is all sold and built out) the prices have appreciated tremendously and I don't think the prices are done going up in many areas.  

You have that Oracle campus with over 4,000 employees that will go there.  On the same block you have one of the largest private hospitals in Latin America going up.  It's more predictable in that area.  But Chapala is one of those areas it just depends how quickly it comes.

Great post.  :)   Thanks again for posting it.  And I don't feel the need to answer all the complaints. I've seen the same type of attitude in many other places.  But in each instance, I've learned something. That's the great thing about the Internet and these blogs.  The sharing of information and being able to discern what is helpful and what isn't.  

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1 hour ago, earlyretirement said:

But there is a difference between something getting posted on Facebook and another when one of the most prestigious real estate firms in the world is telling you about it.  But I do get the point you're trying to get across.

Not here, there isn't. I promise you, I am not being flippant.

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1 hour ago, NoVaDamer said:

what some of the comments miss is the eventual clout of Tapatios (especially wealthy ones) will inevitably lead to better infrastructure. That's how it works, everywhere. The bad news

Hasn't happened yet.

We have four consecutive governments who must have every relative in the concrete industry, because all we've seen in 15 years is more and more of it poured. No infrastructure improvements anywhere, other than minimal repair of certain roads. The water, roadways and cobbles, the phone and Internet expansion, none of it has been improved. None of it. And that's the infrastructure that would have been "better". Just look at those damned foolish Senderos projects and the poor suckers who live in the villages. Our people can't even replace a traffic light without public support; hell, they can't even replace a traffic bulb in a timely fashion. Yep, tons more Tapatio money being spent on housing and Oxxos...

Please don't suggest the exalted bike path was planned as an infrastructure improvement. I've had enough jocularity for one day.

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6 hours ago, ComputerGuy said:

It was "announced" yesterday on a gringo FaceBook page that in two weeks new construction would tear down the tepalo waterfalls and build a development. It was announced today by the muni gov't that no such plans exist or have been shown for permits. So there you go.

Computer Guy, that is not exactly what was said.  We have a ways to go to determine what may or may not be planned, what may or may not have been agreed to (by Javier? By ?) and must definitely wait to see what both Oscar España says, as well as the colonos etc.  At the moment, although Dionicio Morales has also given us some very good background, we have no transparency.  This government, as often in the past, has not told the public the truth of so many things.   Just as an aside, Chapala, Jocotepec, and Ixtlahuacan are still the three least transparent municipalities in Jalisco.

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6 hours ago, ComputerGuy said:

It was "announced" yesterday on a gringo FaceBook page that in two weeks new construction would tear down the tepalo waterfalls and build a development. It was announced today by the muni gov't that no such plans exist or have been shown for permits. So there you go.

Plans have been shown to Chapala and all has been approved to start building.  There was lots of people up there the other day checking the topography.  Chapala was told this is already approved ....

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This place sure does sound like the wild west. Ha.  But as mentioned, I've seen this type of stuff lots of times before.   Mexico still is easy compared to some countries like Argentina where you have to literally show up to closing with $100 US bills.  Now THAT is like the wild west.

Here is a photo I snapped last year when I was buying a property in Argentina.   Insane huh having $250,000 US in cash at a property closing?  So maybe now you'll understand that I've seen a lot of stuff before.  And yeah, maybe my risk tolerance level is a little higher than some of you gringos.

IMG_3897.JPG

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3 hours ago, utilitus said:

"

I keep a strap of US $100 bills for special occasions, so have a feel for the size of cash.  Based on the photo alone, I was able to estimate that pile at a quarter million.  What do I win?

Yeah, I think on this particular purchase it was around $270,000.  Some of the money isn't in the photo.  The crazy thing is armored guards aren't to be trusted (they are the ones that usually call their friends to rob you).  So I was walking around with the money in a backpack to the closing.  Safest way.   This is nothing.  I once purchased an old dilapidated building for $3.5 million and the seller demanded cash!   So we are at the closing in the basement of the bank and they literally have the money in vacuum packed sealed plastic from the US Federal Reserve Bank (as that is how it's delivered) and the seller still wanted to count each bill by hand!    Closing took about 4 hours.

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