Loading...

Eco-investment: how does it work in practice?


The project is described on another page of this web site (see property).

Briefly, the property is a 70 hectare park with 15 quintas of approximately 1 hectare each. The rest of the park (approx 50 hectares) is made out of forests, meadows, springs and walking/horse riding trails.

The property has the following attributes relevant to making it suitable for eco-investing:
  • It has abundance of the critical resources needed for life: pure air and water, rich soil, warm climate, rain and therefore the potential to produce an abundance of organic food
  • It has the potential to provide multiple revenue streams generated by environmentally and economically sustainable land management activities (e.g. eco-tourism, boutique hospitality)
  • It is located in an attractive region of the world where the climate is friendly and where labor is abundant, skilled and cheap
Investing in the project is simple and safe because each investment is secured by a notarized land deed. In essence, the investor is acquiring a parcel of land, a "quinta", exactly as if to build a house and live on it.

The difference between a real estate purchaser and an eco-investor is that the intention of the investor is not to live on the land, at least not for a number of years, but rather to be the steward of a project and allow the parcel of land to reach some potential at an attractive cost and using locally available human resources. An eco-investment would involve the following steps:
  • A conventional real estate transaction between us, the property owners, and the investor takes place making the investor the owner of a parcel of land of approximately 1 hectare. The money is paid normally with a deposit followed by a full payment and the issuance of a notarized deed in the investor's name.
  • The investor agrees to our homeowner association guidelines
  • The investor agrees to a project for the parcel of land and agrees to fund the project. goals, milestones and budgets are set for the implementation of the project. We can make a number of suggestions in that area.
  • From this point in time, we are in charge of implementing the project on behalf of the investor. We use local resources as much as possible and keep a record of all expenses.
After a number of years, as set in the project schedule, the investor is the owner not only of a parcel of land in the valley of longevity in Ecuador but also the owner of whatever has been implemented on that parcel of land.

For example, if the project involves the creation of an orchard of a specific type of fruit, the investor's assets will be the land, the orchard and potentially the business of selling the produce from the orchard to local or international markets if this was part of the schedule.

To illustrate, we have for ourselves planted 100 pitahaya plants which in 3 year time will produce this beautiful fruit also called dragon fruit. This fruit is not widely available in Ecuador and certainly not in first world countries. However, it is one of the best fruit I have ever tasted and being from a cactus plant, it is not demanding. The number of seedlings that we have planted is small and is only used as a test bench but there is room on the land for 1000s of plants. Below, you see us having a lovely time with the workers and my daughter helping planting the pitahayas.

photo photo

This is only one example. Macademia nuts comes to mind too and it sells for high prices. It grows well here. The climate in the valley of longevity is ideal to grow just about any type of food (except trees that require frost).


Risks

Investors legitimately want to minimize risks. Buying a share in any development has risks. If things turn bad between the shareholders, as they often do, it is hard to recuperate the money and/or the investment becomes worthless due to project abortion.

In our case, this type of risk is non-existent as each investor is the exclusive owner of a parcel of rel estate covered by a legal deed and each parcel has its own project under the control of the investor. Recuperating the money is just a matter of selling the parcel which does not require any special procedure or permissions.

As far as the country of the investment is concerned, Ecuador, I would advise the reader to do some easy research on the internet. There are good web sites dedicated to Ecuador exclusively which will provide the information needed about making investments in this country. We found it quite straightforward but of course, each situation is unique and needs to be analyzed carefully (e.g. tax)

Type of projects


Projects can generate a variety of assets such as and not limited to:
  • landscaping: gardens, ponds, forests ...
  • food related: fruit, vegetables
  • medicinal: herbs, plants
  • artistic: sculpture, architecture
  • building: house, studio, workshop
  • animals: horses, chickens
  • energy: solar, wind, other

Next steps