https://youtu.be/jYGKkIG_jBk?si=qK0Z2pA9lPo-VKrD

I regularly have private clients asking me about Plan Bs.

Well, this one here covers a lot of angles. I spent a few days in the middle of Paraguay with this community.

About 250 Europeans and North Americans got together to build a resilient community in the middle of Paraguay. Every house has the option of being completely off-grid, there is an endless supply of water and sunshine, as well as land for agricultural activities. This community, which is currently 85% Germanic, also has access to organic meat, vegetables, and fruit due to its 2000 heads of cattle and vast agricultural operations.

Multiple alternative healthcare practitioners live on site, they even have a fire department, an industrial 3D printer (!!!), a gun range, stables, and a school which values liberty and tradition.

Typically one would expect relatively poor living conditions in such a community, but no. The houses are modern, comfortable, affordable, and there are two fiber-optic cable internet providers.

Just beware

This video is much longer than my usual ones – over an hour long because there was so much to cover. We did not just discuss the community, its values, and infrastructure. We also did some case studies of real estate investments that are available in this community.

Who is such a community right for?

• People who want a Plan B in case sh*t hits the fan
• Plan A for people who want to live close to nature, in peace, comfort and with good infrastructure away from all the drama and in a very low tax jurisdiction
• Plan A for people who want to raise their children in a sane environment

Most applicants and investors get rejected. They want to make sure only people who are aligned with their values can invest and integrate. It’s quite a unique concept.

If you feel this is right for you, read more about the community here and reach out to them to receive more information and set up a call.

If all you want is residency in Paraguay, feel free to reach out to Aleksandr. He has helped me, and many of my clients, obtain residency in Paraguay, which is a relatively easy process if you are from an OECD country.

To a World of Opportunities,

The Wandering Investor.

Other articles on Paraguay:

• Full guide to investing in real estate in Asuncion

Services in Paraguay:

• How to obtain residency in Paraguay
• My Real Estate Buyer’s Agent in Asuncion, Paraguay

If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.

Subscribe to the PRIVATE LIST below to not miss out on future investment posts, and follow me on Instagram, X, LinkedIn, Telegram, Youtube, Facebook, and Rumble.

My favourite brokerage to invest in international stocks is IB. To find out more about this low-fee option with access to plenty of markets, click here.

If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.

Transcript of “The off-grid Community in Paraguay you never heard of – a great Plan B in Latin America”

LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. So today, we’re going to do something quite fun. I’m in the middle of Paraguay, a little country of 7 million people, in a little town of about 20,000 to 30,000 people. It’s mostly a farming region. And we’re going to go check out a Plan B community, essentially, of settlers from Europe that have moved here recently. And they created a whole community that is built around a completely resilient lifestyle. These people are mostly German, but there are also Americans, and Canadians, and other Europeans, a few people from South America as well. They live on this community.

There’s food, there’s water, they even have a 3D printer, there’s a school. So there’s the whole thing with security all around. And these people just want to live in peace, on their own, away from government. I know it resonates with a lot of people these days. We’re going to go there. I’m meeting with the President, who’s originally from Austria, and he’s going to give us a tour. And then we’re also going to be looking at the lots, and how much these lots cost, how much it costs as well to build houses and apartments there. Because it’s possible to not just buy to live, it’s possible to buy as a Plan B, and it’s also possible to buy as an investment. We’re going to be doing all of the numbers as well. It’ll be an interesting case study.

The little town that we’re in is approximately a 30-minute drive away from the community. There’s a nice little central plaza with a nice church, a few supermarkets, a few restaurants, bars. I mean, there’s pretty much everything you need, nothing luxurious, but there’s everything you need. And this area is generally known to be quite safe here in Paraguay. We’re going to jump in the car, and we’re going to go check it out.

Perfect. I’m here with Dr. Annau and his wife, Sylvia, who founded this community and this project. How are you?

SYLVIA: Great.

DR. ANNAU: Wonderful. How are you, Ladislas?

LADISLAS MAURICE: Good, good. Thanks a lot for hosting me and my family here. We’re very happy to be spending a few days in your community.

DR. ANNAU: You’re very welcome.

SYLVIA: Very welcome.

LADISLAS MAURICE: So what I’m seeing from consulting sessions that I have with private clients is, increasingly, high net worth individuals are looking for a Plan B. There are people out there that want to move far away from everything, far away from society, they’re worried about everything that’s going on, but there are others who just want to have one foot in, one foot out, they want to be ready if things really hit the fan. And you essentially created this community, which encompasses both, which is quite interesting. So people that are full-time settlers here and then also people that spend a bit of time here and then go back to Europe or the US and go back and forth.

Why was this community created?

Can you tell us a bit more about why you came up with such a project, what the essence of your project is and your objectives, and essentially how many people are here, how many people you want to live here?

DR. ANNAU: After six years of doing this project, there is a lot of information, so let’s start somewhere. Our community is in the center of Paraguay in a subtropical climate. We have more than 300 days of sunshine. And we have, as you can see, everything is blossoming, blooming. It’s kind of a very, very nice climate. And we were looking for a place where you could be far away from the poisons that you have everywhere in these so-called civilized world. And you probably researched yourself what I mean with poisons of all kinds. And if you want to be far away, and you have a place where you can have clean air, clean water, clean food, and, above all, where you are being left in peace, you’re being left so you can do your thing. And that it’s only a few places in the world where you can do that.

Paraguay is a very, very freedom-loving country. You have a constitution similar to the US. People can have weapons here, so they are very, very free in how they live. The Paraguayans are very freedom-loving, so if anybody tries to take away their freedoms, they get really upset. It’s a good thing because we’re not alone here. And we were looking for a place where you can settle but still, and I know that your clients that are looking for a Plan B, once they are using the Plan B, they want to have all the amenities of a Plan A, right?

LADISLAS MAURICE: Yeah.

DR. ANNAU: Let’s face it, a Plan B is not some kind of a little hut in the mountains or in the jungle. Once you go to your Plan B, you need to have a shop, you need to have healthcare, you need to have all the amenities that you’re used to. And so that’s what we created. We created, for those people who are looking for a Plan B, a perfect Plan B. You have 16 square kilometers, that’s eight times the size of a Monaco, as a country, where you have no radiation, where you have no poisons from the sky, from the water, from the air, from nothing. So where you are poison-free, you’ll be eating organic food. We have the cleanest water in the world. And basically, we’re living here a type of freedom that is unheard of, unseen of.

And that’s why we’ve been all over the world in the radio, television, and in newspapers, even Wall Street Journal. I don’t know where else. I mean, you name it, we’ve been in all of them, not with all the stories being like reflecting who we are. And therefore, we’re thankful that you come, because you wanted to find out. You came here two days ago. And it was a lot of doubts, I guess. Huh?

LADISLAS MAURICE: [laughs]

DR. ANNAU: A lot of doubts and reservation.

LADISLAS MAURICE: I was intrigued.

DR. ANNAU: But anyway, after two days, you know who we are.

Visiting the organic cattle farm of the off-grid community in Paraguay

LADISLAS MAURICE: Very nice. Gosh. So how much cattle do you have here?

DR. ANNAU: Well, normally, we have around 2,000 cattle, and we will increase this this year to about 5,000 cattle. The cattle business is one of the backbones of the economic part of our community. Because you always need to know that we have–

[cow moos]

DR. ANNAU: Oh, hey, yes.

SYLVIA: Hi. [laughs]

DR. ANNAU: We need to know that we have enough income, current income, that if we not have an influx of new investors, we still have enough income to sustain the operation here. And sustainability is the watchword of the whole project.

LADISLAS MAURICE: I buy a lot. I build a house.

DR. ANNAU: Yeah.

LADISLAS MAURICE: We’re going to go see some of those later. There’s all of these animals, the sheep, the 2,000 cattle, etc. This belongs to you as a separate corporation?

DR. ANNAU: To the parent corporation. We are a corporation that actually has a license for the stock exchange, but we will never go on the stock exchange. We only allow people that actually have a lot here to live, and at least plan to live here. Part B of Plan B or Plan A, we don’t care, they can invest into shares. And if you’re a preferred shareholder of this corporation, then you are a part-owner of this. But it’s separate from the lots.

LADISLAS MAURICE: So, let’s say, I buy a lot, I build a house, how do I actually benefit from all of this, apart from the visual aspect, and the kids being able to, I don’t know, just run around and play with animals?

DR. ANNAU: Ride horses.

LADISLAS MAURICE: Like, concretely, how does this help my own resilience? Because it’s not mine, it’s yours.

DR. ANNAU: So we produce organic food. Everything we do is organic. We are in the process of international organic certification. And we go one step further, for those who know about this, Demeter. Demeter certification is even more stringent than organic. And we’ll get both. Which means we produce organic beef, organic sheep, organic chicken. No, we’re not doing anything to our horses. We love them.

LADISLAS MAURICE: Horse meat. The Swiss, they eat horse meat.

DR. ANNAU: Well, no. No, this is not–

SYLVIA: Not here.

LADISLAS MAURICE: Not here. [laughs]

DR. ANNAU: Not here, not here.

SYLVIA: Not here.

LADISLAS MAURICE: The Swiss are not allowed to eat horse meat.

SYLVIA: No, not here.

DR. ANNAU: And all of the vegetables and fruits that we grow here is organic.

LADISLAS MAURICE: Okay.

DR. ANNAU: So if you have a lot here and you live here, you profit because this is a sustainable community. In times of crisis, we don’t need anybody. Right now, of course, we are purchasing some fruits and vegetables because we want to have more variety. But if there would be a crisis, we are completely self-sufficient, and that’s how you benefit.

LADISLAS MAURICE: Is there a place where I can buy some of the meat, and the fruit, and the vegetables, and the chickens here on–

DR. ANNAU: Of course.

SYLVIA: Yeah. We have the Mini Mercado.

LADISLAS MAURICE: Okay.

DR. ANNAU: Check our Mini Mercado.

LADISLAS MAURICE: Okay. Essentially, as a resident, then I would have preferred access. So if there are food shortages, if there are supply chain issues, before these things get sold to other people, the community would get fed, would have access to it first?

DR. ANNAU: Correct. Correct.

SYLVIA: Correct.

LADISLAS MAURICE: Okay.

DR. ANNAU: We only sell the surplus to the outside community, which we do already.

LADISLAS MAURICE: Cool. Okay. No, this is very interesting. And then you have a whole vegetable garden and all of that. 

Access to horses and horse riding

LADISLAS MAURICE: Actually, let’s talk about horses, because this is really cool. So if you’re an owner here, you can just park one of the horses and you’ll have your employees take care of the horse, etc.

DR. ANNAU: Correct.

LADISLAS MAURICE: How much does it cost? Let’s say, I buy, let’s call her Lucy, let’s say, I buy Lucy. Actually, that’s not a Lucy, that’s more of a Harry. [laughs]

SYLVIA: It’s a guy. [laughs]

DR. ANNAU: It’s a guy. [laughs]

LADISLAS MAURICE: Let’s say, I buy Harry.

DR. ANNAU: So you buy Harry.

LADISLAS MAURICE: I say, “Hey, Dr. Annau, I want you to take care of Harry because, I don’t know, my daughter, it’s her horse.” How does it work concretely?

DR. ANNAU: We take care of the horse. We feed it. There is, in comparison to other stables, a very moderate fee for doing that.

LADISLAS MAURICE: Roughly?

DR. ANNAU: Roughly, what is it, $130, $140 a month, including food right now.

SYLVIA: Now. But the horses are just outside they don’t have a stable.

DR. ANNAU: We have 23.

SYLVIA: It’s just being outside because–

DR. ANNAU: Horses here don’t like stables.

SYLVIA: Yeah.

LADISLAS MAURICE: Okay.

DR. ANNAU: If you build stables for horses, you may build them for nothing because they don’t want to stay in there.

LADISLAS MAURICE: Cool. So essentially, you can have your house, and you just take your bicycle, and you come to your horse, you WhatsApp the guy beforehand.

DR. ANNAU: Put the saddle.

LADISLAS MAURICE: “Hey, put the saddle.”

DR. ANNAU: We have boxes for saddle. You put your saddle on.

LADISLAS MAURICE: Okay. You put it or one of the guys puts it for you beforehand.

DR. ANNAU: Of course, yes, you can do that. You phone the guy. We have six veterinarians. Six veterinarians onsite.

LADISLAS MAURICE: Six vets onsite?

DR. ANNAU: Six vets onsite.

LADISLAS MAURICE: Okay.

DR. ANNAU: Somebody can also saddle your horse. You come here, and with more than a hundred kilometers of streets where you can ride. You can be, all day, you can be on your horse.

LADISLAS MAURICE: That’s pretty cool. All right. Good bye, Harry. Cool. Let’s go check out the garden.

DR. ANNAU: Okay.

LADISLAS MAURICE: That’s a lot of green stuff.

Visiting the organic vegetable and fruit farm in the off-grid community

DR. ANNAU: Yeah, we have many places where we produce green stuff. That is our commercial agricultural production. It’s called chacra in Spanish. And here, we grow everything that’s called vegetable that can grow here, which is pretty much everything in a subtropical area. And you have the, like, remolacha is Spanish, rote beete is German, it’s Beta vulgaris.

LADISLAS MAURICE: Is this for the children? Is this for the children from the school so that they learn all the different–

DR. ANNAU: Well, it’s also–

SYLVIA: Yeah, and the adults.

LADISLAS MAURICE: Yeah. [laughs] I feel like I need this education.

DR. ANNAU: And with the Latin names so that, yeah, we have the children, that our children learn how to grow things.

LADISLAS MAURICE: Really?

DR. ANNAU: How to grow vegetables. Because I think it’s minimum as important to learn how to build a house, how to make a chair, or a table, how to grow beets, how to plant a tree, that’s minimum as important as your math and whatever.

LADISLAS MAURICE: Nice. So it’s part of the school curriculum to do this?

DR. ANNAU: Yeah, yeah.

LADISLAS MAURICE: So the kids work in here?

DR. ANNAU: We, actually, have a special garden for the kids.

LADISLAS MAURICE: Really? Nice.

DR. ANNAU: We have many places. This is the biggest agricultural place called chacra, it goes way down here. And then we have the smaller place, which is called the huerta, garden, where we have more fruit trees. And we have a fruit yard for citrus fruits. We have the children’s garden. And then we have areas where our settlers are growing fruit trees, plant fruit trees. So there’s many places, which means we always want to have a surplus of food. Of course, everything is organic here.

LADISLAS MAURICE: Everything is organic. So I can just like grab something, eat it, all good?

DR. ANNAU: You can eat it. That was one of the basic tenets that everything we do here is without poisons, without chemicals.

LADISLAS MAURICE: Okay. Nice. And all of these are available for sale in the Mini Mercado?

DR. ANNAU: Correct, correct. So every day, fresh production goes in. You can even order salad and you get it fresh.

LADISLAS MAURICE: And how are the prices of, for example, your salads versus me going to the local market in town?

DR. ANNAU: What do you think?

LADISLAS MAURICE: What’s the premium versus local produce?

DR. ANNAU: It’s pretty much the same.

SYLVIA: It’s pretty much the same price.

DR. ANNAU: Pretty much the same.

LADISLAS MAURICE: Same price?

DR. ANNAU: Same price.

SYLVIA: Yeah, yeah.

LADISLAS MAURICE: Okay, so–

SYLVIA: With some things, you cannot get in Caazapá because they don’t produce, is melanzane or aubergine. This is a higher price because you can’t find this in Asunción.

LADISLAS MAURICE: Okay, so you sell that to the restaurants, to these things in Asunción?

SYLVIA: No, we use it.

DR. ANNAU: Right now we use it all.

SYLVIA: Right now we use it all.

LADISLAS MAURICE: Okay. You like aubergine that much? [laughs]

DR. ANNAU: Yeah, yeah.

SYLVIA: Yeah.

DR. ANNAU: Yeah, we get it very often.

LADISLAS MAURICE: Cool.

SYLVIA: With 200 people, you use quite a lot of lettuce every day.

Off-grid, natural water source

LADISLAS MAURICE: Yeah, yeah, that’s true. Tell us about water. Because I see there’s irrigation, everything. How sustainable is your water source?

DR. ANNAU: Well, Paraguay is, if you translate it from Guarani, from the language, is the land above the water. So the water that flows to the water. So Paraguay, and that’s one of the main reasons why we are here, is founded on an underground river. It’s the second largest underground river or–

SYLVIA: Aquifer.

DR. ANNAU: aquifer. The biggest one is beneath the Sahara. This is the second biggest one. It’s so big that it comprises parts of Bolivia, Brazil, Paraguay, it’s so big that even if no water would get into it right now, which there’s constantly water filtering through, it would be enough water for 8 billion people for 400 years.

LADISLAS MAURICE: Cool. So no water security issues, essentially?

DR. ANNAU: No water security. And the water is clean, because it runs through 100 to 400 meters of clay and other stone, so the filter capacity, no matter what they do on the surface, the filter capacity of 100 to 400 meters of stone, clay, whatever, is so good that the water is absolutely clean.

SYLVIA: It’s wonderful.

DR. ANNAU: There are companies in Paraguay that take that water out of the deep well, they’re called deep wells, and they’re filled into bottle and sell it. They do nothing with it. And we do the same. We have 15 licensed deep wells. You need to get an approval. But we get it because when this is a big community, and we can always get more if we wanted to. If the community grows, we always get more. We have actually now basic license unlimited wells.

LADISLAS MAURICE: Nice.

DR. ANNAU: We’ve, right now, just made 15. That’s enough for now.

LADISLAS MAURICE: I’ve been drinking the water from the tap in the hotel room here onsite that you have, and yeah, the water is really good. It tastes great. And also, after taking a shower, your whole skin is just soft. There’s no chlorine, there’s nothing. It just feels great.

DR. ANNAU: No chlorine, no. No.

SYLVIA: Nothing in it.

DR. ANNAU: Nothing.

LADISLAS MAURICE: Cool, fantastic. If there are 2,000 heads of cattle, all the sheep, all the chickens, all the food. I see the food security, I see the water security. And I think what’s really interesting, and this is where I can see that there’s a bunch of Germans with engineering backgrounds here, is you have a massive 3D printer. I think let’s go check this out.

DR. ANNAU: Let’s check out.

A massive industrial 3D printer in the middle of Paraguay

LADISLAS MAURICE: Because this is very random. We’re in the middle of Paraguay, and there’s a massive 3D printer in a warehouse.

DR. ANNAU: You see something you cannot see anywhere in South America.

LADISLAS MAURICE: [laughs]

DR. ANNAU: We’ll show you. [laughs]

LADISLAS MAURICE: Let’s go. Great. Can you tell us about these?

DR. ANNAU: Yeah. This is the only place in South America where you can find houses like these. These are printed with a 3D printer. We’re not making little stuff with the 3D printer, we make the big stuff. It’s an industrial robot, an ABB robot, the one that you also use for building cars. But this one spits out like little sausages of concrete, and it makes these little, it goes around and round and up. And then you have a solid concrete wall. This is more durable than regular concrete. It also reflects sunlight. It’s very insulating. And we fill it up, it’s hollow, and we fill it up with perlite. Perlite is also an insulating substance, a non-organic insulating substance.

These houses we are prefabricating. As you can see, back in the lot, about 20 houses are prefabricated. Why are we doing this? Very often, an investor wants to, as soon as possible, make a return on his investment. Now, with this method, we can actually, from the signing of the contract to renting it out, three to four months.

LADISLAS MAURICE: Wow. So money paid?

DR. ANNAU: Money paid–

LADISLAS MAURICE: Four months later, tenant in?

DR. ANNAU: Four months later, he’s in. So three months the whole thing is there, and then it’s just a matter of furniture, what do you want to select, or do you have household goods in there?

LADISLAS MAURICE: And you can also take care of this, the furniture package and all that?

DR. ANNAU: We can take care of it. We do this all the time.

LADISLAS MAURICE: So everything?

DR. ANNAU: We finish everything. Normally, the tenant organizes his own tableware and stuff. But basically, we put all the furniture in, standard furniture. We’ll ask if and kids’ bunk beds, etc., so we have the respective furniture for the tenant.

LADISLAS MAURICE: And people that are not familiar with 3D printing, they might ask you how durable is this? How appropriate is it for like the relatively harsh weather here in Paraguay?

DR. ANNAU: This is sun-reflecting, so it’s probably more durable than regular concrete. It’s a really good solution. They use it, by the way, they use it in Abu Dhabi and in the Sahara. Most of their clients are from there, and we are the only ones in South America that bought this thing. And the cost, this whole investment is close to a million investment. We did this because we know that the big wave of investors will come. We are not at the big wave yet. When the big wave comes, people want to live here. And if they want to live here, I need to provide accommodation within three or four months.

LADISLAS MAURICE: This machine, if it’s working full-time, how many standard two-bedroom houses can it build in a month, roughly?

DR. ANNAU: Right now we are building about one a week. But we can implement a system where we can do double to triple, which means a rail system where we print and shove it out the rail. We shove it on a rail, it’s all planned. We don’t need it right now. One a week is well enough, but we could make three a week if we do that.

LADISLAS MAURICE: Yeah, because the guys are only working in the morning right now.

DR. ANNAU: Yeah, right. Guys only work in the morning, we can do three shifts.

LADISLAS MAURICE: Cool. Okay. And it’s not like these machines need to go to bed, right?

DR. ANNAU: No. This is an industrial robot, an ABB robot that lasts forever. They’re built like for the car industry, and they run, sometimes, three shifts.

How remote is this resilient community?

LADISLAS MAURICE: Yeah, exactly, yeah. This whole community is built around the idea of resilience. I’ve spent the last few months traveling around Latin America. I went to a few such communities in Costa Rica, and Panama, etc., in Mexico as well, and I have not found a single community that is as advanced as yours. And yet, you’ve managed to pull this much off in six years. I’ll attribute this to your Austrian rigor. [laughs]

SYLVIA: [laughs]

LADISLAS MAURICE: This place is far, so it is a disadvantage from an accessibility point of view. You have to come to Paraguay, it’s not necessarily very well-connected. And then, once you land at Asunción, you need to drive another four hours to this place. The lack of accessibility is one of the reasons that there is this level of freedom. You can’t have this level of freedom near New York, for example, or Toronto. Let’s talk about the people who are living here, because you talk about community. Can you tell us how many people live here full-time? Are a lot of people coming here? Where are the people typically from? Can you just give us a bit of an overview?

DR. ANNAU: To the accessibility, I normally don’t tell this because I don’t always talk to people on that kind of level of investment. But yes, you go to Asunción, it’s an international airport. And if you wanted to be here in 25 minutes, you can take an airplane, a small airplane or a helicopter, and we have a full-sized jet airport in Caazapá.

LADISLAS MAURICE: Really?

DR. ANNAU: Caazapá has a 1,600-meter landing strip. You could actually land with a small Airbus, even a small Airbus may be able to land. So any Learjet, anybody else, we have deliberately created, because we know where the world is going right now, and you can research that, we don’t need to get into this, but where the world is going right now, a lot of people that actually have more assets will also look for safe places. And there are people that have their own airplanes, there are people that or have access to airplanes. So if you go to Asunción, we are, depending on the speed of your airplane, between 15 and 30 minutes away. And you land in Caazapá Airport.

LADISLAS MAURICE: Okay, within half an hour.

DR. ANNAU: A completely brand new airport, jet airport. And since we are, right now, getting the asphalt street down here–

LADISLAS MAURICE: So the road I drove on will get proper pavement?

DR. ANNAU: It will be asphalt, yeah.

LADISLAS MAURICE: Okay, good.

DR. ANNAU: Probably this year, probably in 2023. That’s what it looks like.

LADISLAS MAURICE: That’s a good catalyst.

DR. ANNAU: They are very close to completion here. And when that is done, from that airport, it takes you 10 minutes to get here. So you, practically, I needed to tell you this in terms of accessibility, it is very easy to access if you have a car. So that’s all available.

LADISLAS MAURICE: Great. So this is a more of a lifestyle property.

Viewing a nice family house in the community along with ROI, capitalization rate and rental yield numbers

DR. ANNAU: Of course yeah. It was never intended to rent or for investment. It is a pilot, a guy who is a Europe pilot. And he came over here and said, “I want to live with my family,” very young children. So he said, “Use whatever assets I have.” It’s like middle class, this is not a rich person. But with the housing prices here, he could afford making a huge villa with a pool and the lake.

LADISLAS MAURICE: Nice. Let’s go check it out.

DR. ANNAU: We’ll go and check it out.

LADISLAS MAURICE: So Dr. Annau, so this lot and house, so that we have an idea, all together, how much, approximately, in US dollars, with the finishings?

DR. ANNAU: You’re looking at a 2,500 square meter a lot with a lake. A quarter of this lake belongs to him, it’s his own lake. And you’re looking at this whole house with three large bedrooms, utility rooms, everything.

LADISLAS MAURICE: Big utility room here.

DR. ANNAU: Big utility room. You’re looking about €220,000 for the whole thing.

LADISLAS MAURICE: Okay. 220,000 euros?

DR. ANNAU: Euros.

LADISLAS MAURICE: Okay.

DR. ANNAU: So two-hundred-thirty whatever in dollars.

LADISLAS MAURICE: Yeah.

DR. ANNAU: You have big kids’ rooms, and, like, for the kids, ideal. We just came in here without announcement. So this is how people live. Three bedroom.

LADISLAS MAURICE: Three bedroom.

DR. ANNAU: I really like the bathroom. It’s gorgeous.

LADISLAS MAURICE: Cool. Big shower.

DR. ANNAU: It’s one of the nicest bathrooms we have here. It’s really nice.

LADISLAS MAURICE: There’s a big shower right here behind.

DR. ANNAU: Big shower.

LADISLAS MAURICE: Living room. Yeah, really nice.

DR. ANNAU: And living rooms in Paraguay are not very big, because most of the time you’re out at the terrace. What you have, you have a big terrace. But the living room is just for the few days that you want to stay inside. A big kitchen. And when I say €220,000, that’s including everything you see, is what they invested.

LADISLAS MAURICE: Okay. Euros.

DR. ANNAU: Euros.

LADISLAS MAURICE: So 230K, 240K USD, roughly.

DR. ANNAU: Right, right.

LADISLAS MAURICE: Including the nice pool.

DR. ANNAU: Yeah. The pool is just an asset.

LADISLAS MAURICE: That’s a nice pool.

DR. ANNAU: Hey, [Yasmin 00:26:41]?

LADISLAS MAURICE: Hey.

DR. ANNAU: Yasmin takes care of our horses.

LADISLAS MAURICE: Nice.

DR. ANNAU: So we want to have a horse range and we want to have a place where people that like to ride, a hundred kilometers of roads to ride.

LADISLAS MAURICE: Wow. Cool.

DR. ANNAU: So it’s a paradise for horse lovers, too.

LADISLAS MAURICE: So many more Harrys and Lucys.

DR. ANNAU: Right. So look at the lot here. This is a round lake with about 900 square meters. And a quarter of the lake is owned by each of these four owners. And like, the owner next to it–

LADISLAS MAURICE: And it’s swimmable in there?

DR. ANNAU: What’s that?

LADISLAS MAURICE: It’s swimmable?

DR. ANNAU: It’s swimmable, yeah, it has about four-and-a-half meters’ depth. So it’s always cold. Like, when you dive down there, it’s always cold, the water. And it’s good that we see when you see more or less finished development, and also that’s under construction. In two months, people will be living there and doing their gardens.

LADISLAS MAURICE: I mean, we just saw the 3D printer. I see that they’re not using the 3D printing.

DR. ANNAU: No, not yet. Not yet. We are really getting going with the 3D printer now. We can see the one house that’s already standing. But I have now projects, where like you have a little lot with four of these houses on. And that’s good profit, it’s very good profit, and it’s very fast. But here is also interesting. This was half a hectare. The owners bought half a hectare. And they put two apartments on one side, and put their villa on the other side.

LADISLAS MAURICE: Okay, I think this is interesting. So half a hectare, approximately, one acre. 

DR. ANNAU: Yeah.

LADISLAS MAURICE: And so they have their own property. And then they plan on renting out the other one.

DR. ANNAU: The other way around. This is their own one. So what they did, they came here, they did what most investors do. First, they bought the half a hectare. Then they, first, built the two apartments. And now they moved into the apartments. Now, which is also good, because if you ever change your mind, selling this property with two apartments on it and no house, you could always change your mind. Suddenly, you want to go in the mountains, I don’t know. But then you can still say, “Well, I’m selling a half a hectare with two apartments on it.” I have sold these, sometimes, in less than a day. Because the new guy says, “Well, yeah, I can already move in, and I can plan my house like I want.” And this gives the opportunity, family decides to come, then they are here.

Who lives in this off-grid community in Paraguay?

DR. ANNAU: We now have about 250 people living here. We have about 15, 20 kids in kindergarten, and about the same amount of kids in a school. We have a school here, which will be a publicly-recognized school by the end of the year. Right now it’s not. We have waited a little bit because we wanted to see how this whole thing works out with weird United States views of the world, and of kids, and of, whatever, social life, boys and girls. And we were a little cautious, but now we know that everything is normal here in Paraguay, so these kind of ideas that some in America may have did not transpire to Paraguay. We could hold them off.

LADISLAS MAURICE: Cool, so more traditional education?

DR. ANNAU: Well, we have boys and girls here. I don’t know, no matter how often I look at people, I see men and women. I don’t know, maybe I’m not intelligent enough, but I see men and I see women. Maybe I’m old-fashioned. Paraguay actually has men and women, and boys and girls, and that’s the way it will stay. We make sure of that. And now, the road is clear that we get our school recognized officially. Our school will be recognized and probably, by the end of 2024, once we are recognized as a colony, which it’s actually a body, a colony is like a country within a country. That’s only possible in Paraguay.

LADISLAS MAURICE: I think this is also important to go into the history of it because historically, in Paraguay, there were always persecuted minorities that would come over. And I think the colony system started with the Mennonites, correct?

DR. ANNAU: The Mennonites have many colonies. And the Mennonite colonies have worked best because their basis is the Bible and the creed.

LADISLAS MAURICE: Cool. Mennonites are essentially relatively similar to Amish. There are these German Amish-like communities in the north of the country. And they have a special status, which you’re trying to attain as well for this community.

DR. ANNAU: Right. There have been 55 recognized colonies in the history of Paraguay in the last 250 years, but colonies they [deem 00:31:30] earlier, but that the colony museum starts about 250 years ago. There have been colonies of Austrian, Germans, Japanese, you name it, Canadians, United States, Swiss.

SYLVIA: Swiss, yeah.

DR. ANNAU: There have been so many colonies, and the lasting colonies were the ones founded on a belief or a creed.

LADISLAS MAURICE: So 250 people, what’s the makeup of the people? Because it’s heavily German at this stage.

DR. ANNAU: Right now, since we started with our marketing material in German, and the interviews, which now are historic that we did five and six years ago, with Robert Stein, they were all in German. Therefore, we have about 80% German, Austrian, Swiss, and 20% other countries. We now have 15 nationalities. And right now, I think the influx from other countries will be bigger. If we talk in two or three years, there may be as many United States and American citizen. We hope for that, because we want to have an international community, that’s basically. The age is from newborn to over 80. It’s very mixed, we have young couples and we have also elderly people that are retired here, because you can live in Paraguay for, I don’t know, $200, $300 a month.

If you have your own house and your own little vegetable garden, you could potentially live off $250, $300. Not if you go to the Bambambo Cafe every day, but if you live off your garden, and you have a few chicken, you could almost live for free. And that’s good also for retired people, very good. You have a very low standard living cost, very low living costs, and you also have no taxes here. If you live off a pension fund, no taxes. We have a lot of people here that work off the internet. Many. 

Fiber optic internet in the community

DR. ANNAU: We’re the only place in Paraguay that has two physical fiberglass cables.

LADISLAS MAURICE: Cool. Fiber optic.

DR. ANNAU: Fiber optic. We have more internet reliability in our off-grid community than you have in Asunción, the capital of Paraguay.

LADISLAS MAURICE: Yeah, the internet’s fast.

DR. ANNAU: So, you have people that work over the internet that have chosen to live here because your income, your international income is not taxed in Paraguay.

LADISLAS MAURICE: Not applicable to US people.

DR. ANNAU: Not applicable to US people because they need to pay taxes if they are US citizens, I know.

LADISLAS MAURICE: Yeah.

DR. ANNAU: Tax returns every March. Is it March? Right, March, right?

LADISLAS MAURICE: [laughs]

DR. ANNAU: So anyway, but here, you have very low cost of living, you have very low taxes, you have an internet that is unheard of in Paraguay, and you have clean air and everything else.

Resilience through local income

LADISLAS MAURICE: And I think from a resilience point of view, so if we take the case of extreme things happening in the world, big supply chain disruptions, etc., the reality is, potentially a banking crisis, you have a hard time having access to your money, or your pension goes to zero. I mean, these things have happened in history. I’m not saying it’s going to happen, but these things have happened in history. So if we take this stress test, the advantage of having your own house and then also one or two investment properties on your own property is that, in case of issues, you know you can always get some sort income.

DR. ANNAU: You have local income.

LADISLAS MAURICE: Local income, getting paid by people one way or another locally. So this makes you and your family a lot more resilient. And I like the fact that, in this community, because often an issue with especially in North America, in all of these gated communities is that there are just so many rules in terms of what you can build, what you can’t build, blah, blah. Here, it’s actually very flexible. As long as you’re reasonable, you can pretty much do whatever you want on your property.

DR. ANNAU: I make people laugh, I can say, you can build a medieval fortress here.

LADISLAS MAURICE: [laughs]

DR. ANNAU: I mean, it’s your property, you can do whatever you want. [laughs]

LADISLAS MAURICE: Yeah. This would not be good for this property’s value if they had this, but yeah.

DR. ANNAU: If this would be your life’s dream, you would make it look nice, but we have, on the properties, we have no restriction to the style of what you’re building. And we have very little restrictions. Just the border lines that we need to keep somehow so that the neighbor that is not infringed upon. This is, you see, he’s going to make about between $1,200 and $1,400 rent.

LADISLAS MAURICE: For these two tiny apartments?

DR. ANNAU: For these two, for these apartments. And that’s enough for him to live with his family of four.

LADISLAS MAURICE: Cool. And this is what being resilient, being truly resilient means, having local income. And also anyone can start pretty much any business from their own house.

DR. ANNAU: And that’s a beauty. If he gets the idea I want to do pizza, then he starts in his kitchen. Like, Yasmin could start in her kitchen and just start making pastries. And then she starts selling them. If it works, she can always go and do it somewhere else. If it doesn’t work, or it’s not a big business, you could do it from her kitchen. That’s one of the big advantages. You can do any commercial activity as long as it doesn’t stink, as long as it’s not noisy, and as long as it doesn’t smoke, you can do anything out of your own private property or apartment.

LADISLAS MAURICE: Yeah. So a bit later, I’ll be showing some footage. I’m going with some of the settlers here, some of the people living here, we’re going to the gun range. And I already met some of them, they’re from Norway, and they have an ice cream business at home.

DR. ANNAU: They’re making ice cream.

LADISLAS MAURICE: So they get the milk from the local cows, all organic, they’re making ice cream in their own home and then selling it to the community.

DR. ANNAU: This can only happen in El Paraíso Verde. Out there, you will need permits, permits, permits, and other permits, and you would never get going here. And then to add on top what we were saying with the crisis situation, you could have a media sombra, half a shadow, that way you can grow vegetables. In Paraguay, you need about 100 square meters per person to live off the vegetables. So have a few chicken and have a vegetable garden here, is enough space there, so you can feed yourself.

LADISLAS MAURICE: Can you have a fish farm in there?

DR. ANNAU: Yeah. If the four owners agree to have fish, they could put tilapia in it. We have one lake, it’s a big property, where the owner owns the lake, he put tilapia in it. So he feeds the tilapia organic. And it’s not too many tilapia, so he doesn’t need to put any chemicals or antibiotics in it. But he has tilapia. He has fish every Friday.

LADISLAS MAURICE: Cool, fantastic. So about $230,000, $240,000 for all of this.

DR. ANNAU: Yeah.

LADISLAS MAURICE: If I were to buy this, hand it over to you. I know this is not really supposed to be an investment property, how much do you think you could get in terms of rental income on a monthly basis for it?

DR. ANNAU: If I compare other rental income on other places that actually rent it out, let’s say, $2,000 is doable.

LADISLAS MAURICE: Okay. So about 10% gross yield.

DR. ANNAU: Yeah, yeah.

LADISLAS MAURICE: Okay. Also, because it’s a bit more expensive, I’d say it’s probably a bit harder to have tenants. Typically, would be people with more money, so they’re probably building something else.

DR. ANNAU: Correct.

LADISLAS MAURICE: So now we’re going to go check out actual investment properties, where we would have tenants that would stay longer term.

DR. ANNAU: We’re going to look at a house that can be rented out and also owned, which is like this in-between kind of thing, like half the budget.

LADISLAS MAURICE: Perfect.

DR. ANNAU: And then we can also look at the apartments.

Affordable housing in the Paraguay off-grid community

LADISLAS MAURICE: Cool. So a bit over $100,000 for the other one. Cool. So we were on our way to the investment property, but we just bumped into Matthias and Heike. So for the little apartments for the people that are building their villa and with the two investment properties here, we bumped into them, and they’re kind enough to show us. So I think that’ll be interesting. How are you?

MATTHIAS: Fine, fine, thank you.

LADISLAS MAURICE: Cool.

MATTHIAS: And you?

LADISLAS MAURICE: Good, good. So, Matthias and Heike, originally from?

MATTHIAS: Germany.

LADISLAS MAURICE: From Germany. And so you built these two investment properties for yourselves for, what, retirement income, or?

MATTHIAS: Exactly. Exactly. Yeah, yeah.

LADISLAS MAURICE: When did you finish building these properties?

MATTHIAS: We moved into this one, four weeks ago.

LADISLAS MAURICE: Four weeks ago, great.

MATTHIAS: We intended to use this until our casa, our home is ready. And then we will move over there. And so yeah, four weeks ago, we finished everything and–

LADISLAS MAURICE: This one?

MATTHIAS: end of this week, it’s ready to–

LADISLAS MAURICE: Perfect. Okay, so it’s not even fully ready yet but you already have tenants, right?

MATTHIAS: Exactly.

LADISLAS MAURICE: Okay. And how much are they paying per month?

MATTHIAS: Four million Guaraní’s without water and electricity.

LADISLAS MAURICE: Okay, so 4 million, so that’s approximately $600, roughly?

MATTHIAS: Yes.

LADISLAS MAURICE: And they have to pay for all of the water, the electricity, the internet, and all that?

MATTHIAS: Yes, yes.

LADISLAS MAURICE: Okay, cool. Great. So let’s go inside. So very simple. Bathroom, bedroom, living room and kitchen. So very simple. But ceilings, again, high. So this is it. I mean, you get two of these. And you’re making $1,200 a month. You can manage it yourself, you live across. And I mean, that’s all you really need for retirement here. Life is really cheap in Paraguay. And then that’s it, you have your resilient Plan B.

Core values of the off-grid community

SYLVIA: And we wanted to create a new community where people can trust each other. When you meet somebody on the street or in the property, you know this person means good for me and I mean them good. So there is always this trust you can have with the people living here. And that was one of the biggest basis to go out and to found a new community because this is something you hardly find outside.

LADISLAS MAURICE: Yeah.

DR. ANNAU: Basically, we are a community. Above all, it’s not a real estate investment, not alone. It can be a real estate investment, but we’re not looking for people who just look for the money, we look for people that are real, honest, true people. And you know what, after six years, we have a community that lives by our tenets, which are on the internet everywhere, our tenets you can read. And tenet number one is I believe that you want the best for me and you can believe that I want the best for you. And that’s about it.

We are non-religious. We have no religious denomination. We have no political affiliation. We want to be completely independent. But basically, that is we are respect one another and we also respect that we are different. It’s very important. We have people from all kinds of creeds. We have people that are convinced that the Earth is round, others may think of maybe it’s not round, whatever, you know? It’s the only place on Earth where you can go to our coffee shop, drink a beer with somebody, talk about a topic and, at the end, you can say, you know, you think Earth is round, I think the earth is flat, whatever, whatever you want to think, or maybe it’s neither round or flat, I don’t know.

But basically, you can have completely different opinion about something and still know that the other person wants the best for me, and I want the best for the other person. We drink a beer. At the end, we agree that we disagree. And this is the only community where we will, at the end, we’ll have free teaching and free science. Science can only exist in a climate of dissent. We must have different opinions. Once we all have the same opinion, there’s no science. End of science. Then it’s a cult. That’s what modern science is. So this is why we will create a university here, because we want people, if somebody says, well, you’re pulled to Earth and other one says you are pushed to Earth, well, let’s see. We disagree. Let’s see what is the truth. We can only find the truth if we fundamentally are able to disagree without being at odds with one another. That’s basically our philosophical background.

And that’s, basically, we believe that man is a spiritual being. Let’s put it this way, if an atheist wants to come, they don’t last long here. So all the people that live here are fundamentally convinced that they’re more than just a piece of meat. Let’s put it this way, there’s a bottom line, and everything above that, everybody can have his own belief. And that it’s important just to know where’s our border lines. This is not for money. We’ve never done this for money. If we would have done this for money, we would have never done it this way. We always did it in order to create a sort of a Noah’s Ark. A Noah’s Ark where freedom is still preserved for you, freedom to do your thing.

Our job was always to create an environment where people can do their thing. All of these 2,200 properties, by the way, are 2,200 paradises all together is one big paradise. And Sylvia and my job was to make sure that you’re secure here, that you are free here, that you are not poisoned here, by no means poisoned. And you’ll research what for you is poison, right? You’re not poisoned, and you can grow. And we do believe it’s not only growing materialistically, but also growing spiritually.

And this is the only way that you can even grow spiritually, if you are not poisoned, and if you are free, and if there is not, tomorrow, an agency of the government coming after you, and then the police, and then the FBI, and then the whatever agency wants something from you, and you need to get a little permit. You can do everything you want here. If you want to make pizza, you don’t need a permit, you just make pizza. And if people like it, you sell pizza, and you’ll make money with pizza. And if you don’t like it tomorrow, you do something else. This is the kind of freedom that we have created here. And this is why people from all walks of life and from all countries, 15 different countries, are coming to us.

Visiting a budget house

LADISLAS MAURICE: Cool. So we saw the more the lifestyle property, and now we’re going to go check out a house that would be both for people that are more on a budget, or potentially an investment property as well. Right?

DR. ANNAU: Correct. Correct. And you asked me to do this, because I normally don’t show this house until it is really fixed up, finished. But we got the power of attorney yesterday. So therefore, you wanted me to show it. So I’ll do show it. This is a typical case. We have more than 100 houses built. And right now we have, I think, two houses for sale. So 2% to 3% of the houses are always going on the market or being resold. That’s normal this life. Reason why people leave, very easy, same thing, grandmother built the house, had this additional lot for the children, children say, “We don’t want to go to Paraguay, we stay in Germany.” Lady leaves. It’s just normal case.

LADISLAS MAURICE: Attrition.

DR. ANNAU: Normal attrition. So this house has about 900 square feet as living space, 900 square feet. The whole lot is about 8,100 square feet. But there is an additional lot which has a very special position, this is the last lot before the dam street, and you have unobstructed view.

LADISLAS MAURICE: So this will all be pasture after the road?

DR. ANNAU: This will always stay pasture. There is never going to be buildings here. And this is a jungle here. And in this jungle is a natural river there, the River Pirapó. So whoever wants to live here, like not just for renting, it would make sense to buy both properties. And I mean, this is gorgeous.

SYLVIA: It’s beautiful, yeah.

DR. ANNAU: It’s so quiet here.

LADISLAS MAURICE: So just the lot of 800 square meters, so about eight-and-a-half, nine thousand square feet is–

DR. ANNAU: Right around $25,000.

LADISLAS MAURICE: Cool. So 25K. And that’s pretty much entry level here for the community.

DR. ANNAU: It’s pretty much entry level, yeah.

LADISLAS MAURICE: Like, you won’t find any cheaper than 25K. This is the essentially amongst the cheapest lots in this community.

DR. ANNAU: Correct.

LADISLAS MAURICE: As soon as you start to have a river access, or a lake access, or you’re closer to the center, then the prices go up.

DR. ANNAU: Correct.

LADISLAS MAURICE: So this is really entry level, which is what I wanted to show both sides. You can have the full-on nice lifestyle, or you can come here a bit more on a budget. So a house like this. Let’s go inside. I mean it’s not finished. But yeah, like two bedrooms. I like the height of the ceiling.

DR. ANNAU: Yeah, yeah. Room.

LADISLAS MAURICE: Yeah. Okay, so two bedrooms.

DR. ANNAU: Two nice bedrooms, and you have a closet, a walk-in closet. This is a bathroom. I’m sorry, you have a bathroom here. You have two bedrooms and a bathroom here.

LADISLAS MAURICE: Cool.

SYLVIA: [inaudible 00:49:34] you have two bathrooms, here and next.

DR. ANNAU: And you have another bathroom.

SYLVIA: Yeah.

LADISLAS MAURICE: Cool. So roughly, with normal finishings, how much would just building a house like this cost per square meter?

DR. ANNAU: If you go per square meter, you’re right around between $80,000 and $100,000 for this house, depending on how expensive your tiles are, your sanitary objects, and how expensive your kitchen is.

LADISLAS MAURICE: Okay, great. So you add the price of the lot of about 25K, around $105,000, $110,000 for a house like this. This is pretty much entry level in the community. If you want even cheaper, you can buy a lot like this and build a little one-bedroom house. Some people have done this. But this would be kind of your typical entry level house where you don’t feel squeezed, because the other ones we saw are a bit small.

DR. ANNAU: Correct. They were smaller. Also, this is the high quality windows, and this is a little better standard of a house.

Rental returns in the community in Paraguay

LADISLAS MAURICE: So let’s talk Plan B. So let’s say, I live in Canada, I want a Plan B, I also don’t want to put hundreds of thousands of dollars into Plan B because I may not be able to afford it or I don’t have the inclination to invest that much into my Plan B. But I want to have something that I can then also rent out, right? Make some money. And then if I need to activate my Plan B, then I can come here. So let’s say, I come to you and I say I want to buy a house like this. So let’s say, like 110K, 120K, if I want it a bit bigger, with a lot. And I tell you, I want to have tenants. I want you to find tenants for me. Because, if I’m in Canada, I’m going to have a hard time finding tenants here.

And I want to put a clause in the rental agreement with the tenants stating that if the owner or his immediate family want to move here, they have two months to leave or something. Can I put a clause like this in the rental contract and then hand over the management of the property to you?

DR. ANNAU: Correct.

SYLVIA: Yes.

DR. ANNAU: Correct.

LADISLAS MAURICE: Yes?

SYLVIA: Yes.

DR. ANNAU: This is Paraguay.

SYLVIA: Yeah.

LADISLAS MAURICE: Cool. So this is important, because as I’ve been traveling all over Latin America, it’s hard to find Plan B’s that you can also make money on in rural areas. Because as soon as you go into rural areas in most of the continent, if you’re not here to manage it, things are going to happen to your house, either things are going to get stolen, or there’s going to be just generally incompetence in terms of property management. So here, this is not the case, no one’s going to come and steal your cables, and your toilet, and your TV, and your tiles, and all of that. That’s not going to happen. So this is reassuring. And then if you want to come here, then you have the option to come here whenever you want. In the meantime, you’re earning a bit of money.

So let’s say, this house, 110K, I hand it over to you, find new tenants. How long would it take you to find tenants? And roughly, how much rental income could I expect from this house?

DR. ANNAU: If you want to get outside?

LADISLAS MAURICE: Let’s go outside.

DR. ANNAU: Because of the reverberation here. I think we have a better sound here.

LADISLAS MAURICE: It is nicer outside.

DR. ANNAU: If I want to rent out this house, we have a website and we have a whole sales force that is renting out houses. I got the power of attorney yesterday, so probably, within a week or two, I have the person who wants to move in here and rent it.

LADISLAS MAURICE: So it’s that easy. So essentially, house on the market, tenant?

DR. ANNAU: A hundred percent of our properties of our owners are rented, 100%. And normally, when the walls are about this high, people already have the person interested in renting.

LADISLAS MAURICE: So as a landlord, when I hear this, I want to jack up my prices. So what can I expect here per month?

DR. ANNAU: So let’s look at this in a practical viewpoint. Yesterday, we got the power of attorney. So next week, we’ll put this on our website and we’re looking for also not only for people who want to buy but also people who would like to rent. And if somebody would like to rent this place, there would be, more or less, let’s be very cautious, $950 per month once the house is finished. So considering you have between $100,000 and $110,000, depending on the price of the tiles you put in, you have between $100,000 and $110,000 to finish this house, you have about a cap rate of, let’s say, 10%, roughly.

LADISLAS MAURICE: Yeah, because you need to add a bit of furniture, the TV, etc.

DR. ANNAU: Yeah, yeah. Right.

LADISLAS MAURICE: Okay, so roughly 10% gross.

DR. ANNAU: Roughly, 10%.

LADISLAS MAURICE: What are your fees as the management company?

DR. ANNAU: We have a standard. We have three monthly rents have to be paid in advance. One month rent is commission, commission as sales force. Two months are being put in escrow with the company. And we will not touch this until the tenant moves out. Then we’ll look at damages and repair and pay that.

LADISLAS MAURICE: Two months is escrow, but who pays the commission, is it the owner or the renter?

DR. ANNAU: No, the tenant.

LADISLAS MAURICE: The tenant pays.

DR. ANNAU: The tenant pays the commission, yes.

LADISLAS MAURICE: Okay. So for now, I’m still hearing 10% gross, that’s what I’m earning. Then I have to pay how much? Because you also have a tax for the colony/the community, because you’re a bit of your own government here. So you have a tax of how much?

DR. ANNAU: In terms of monthly fees from your monthly rent, we have a 5% infrastructure fee from your rental income a month that we put into the infrastructure, and we have, more or less, 10% fee for managing. If we manage the property, depending on who manages it, we can do it, there’s also settlers that are taking care of properties, give or take, 10% of your rental income will be the management.

LADISLAS MAURICE: So the 5% is essentially a tax but mister is more of a libertarian, so he calls it an infrastructure fee. [laughs]

DR. ANNAU: [laughs]

SYLVIA: [laughs]

LADISLAS MAURICE: And then there’s the government income tax in Paraguay on rental income of approximately 10%.

DR. ANNAU: Ten.

LADISLAS MAURICE: What about the utilities here? So water, electricity, also the services for garbage, all of that, how much is that per month, roughly?

DR. ANNAU: Okay, so we just said the tenant pays about $900, $950 for the rent. Consider, roughly, depending on how many people live here, right around $100 a month for the utilities, electricity, water, and garbage. The internet is relative. It starts at around $20 a month and can go up to $70 a month depending on the bandwidth. Now, remember, we have two fiber optic lines here. So we have very high quality internet if you need it.

LADISLAS MAURICE: Cool. So there’s competition.

DR. ANNAU: Right. But this is also, yeah, Internet, traditionally in Paraguay, is expensive, very expensive, but the prices are also going down here with the competition. And also remember that that is cost that the tenant bears. For the owner here, you have the annual cost of maintaining the streets and the security, above all, the security, that’s the biggest part of that cost. Figure out about $600 a year for that cost.

LADISLAS MAURICE: Cool. All right, fantastic. So the tenants pay this, so this doesn’t really impact the yield for the cap rate for the investor.

DR. ANNAU: No, no.

LADISLAS MAURICE: What about the property tax or HOA fees?

DR. ANNAU: The property tax for the whole community is paid by the parent company. And so the annual fee for the maintaining of the property is the $600.

LADISLAS MAURICE: So a house like this, about $600–

DR. ANNAU: $600 a year.

LADISLAS MAURICE: per year for property tax, security, infrastructure, the lakes, all of that?

DR. ANNAU: Correct, correct. Everything. Everything.

LADISLAS MAURICE: Okay.

SYLVIA: That is for the house owner.

LADISLAS MAURICE: Okay.

DR. ANNAU: That’s for the house owner.

LADISLAS MAURICE: Okay. So that’s a pretty good deal. I mean, you get a lot for $600. A lot of flies and mosquitoes. Is that an issue here?

DR. ANNAU: No.

LADISLAS MAURICE: No?

DR. ANNAU: Mosquitoes are only an issue as long as the garden is not maintained. Now, here, you have not maintained garden, so you have a lot of puddles. Once we even out the garden, this is why I normally don’t show this property, in a couple of weeks, there will be one garden here, there will be grass planted, there will be trees planted. And a mosquito has a radius of about 200 meters. So once there are more houses there, there are more properties that are being fixed up, and so in those areas where we have the gardens, we have very little mosquitoes.

LADISLAS MAURICE: It’s not too bad.

DR. ANNAU: That’s for the Floridians. You know, Floridians are sitting in bird cages. That means they need to have mosquito nets everywhere. We, in Paraguay, never have a bird cage. We always sit outside without mosquito nets, which tells you everything. Which tells you that our normal mosquito nuisance is a fraction of what it is in Florida or in other areas, like Norway or whatever. Or Canada. Canada, there’s a lot of mosquitoes, so where you cannot stay outside in the evening because of mosquitoes. Here, we sit outside without mosquito nets. And when the maintenance is done, you have a quarter of the mosquitoes that you have right now.

LADISLAS MAURICE: Cool, so it’s not too bad. I’ve been in shorts here for a few days, I’m all right.

DR. ANNAU: Right, right.

LADISLAS MAURICE: Cool. So essentially, about 10% gross and then you remove about 10% for property management, 10% for taxes, approximately 5% for the infrastructure fee.

DR. ANNAU: Correct.

LADISLAS MAURICE: So you get, generally speaking, to a net yield of about 6%, roughly, net-net yield 6%, if you take into account a little bit of maintenance.

DR. ANNAU: Right.

LADISLAS MAURICE: So this is what you get. I can’t–

DR. ANNAU: But remember, it’s inflation adjusted, rents rise if there’s inflation.

LADISLAS MAURICE: And there’s no rent control here?

DR. ANNAU: There’s no rent control. And the good thing is, if the tenant doesn’t pay the rent, he’s out. There is no–

LADISLAS MAURICE: Yeah. How fast?

DR. ANNAU: Tomorrow.

LADISLAS MAURICE: Cool. Okay. So you don’t have any tenant risk, there’s a two-month deposit.

DR. ANNAU: Yeah, two-month deposit.

LADISLAS MAURICE: Every year, you can increase the rent to whatever, so there’s a lot of freedom for the landlords.

DR. ANNAU: Correct.

LADISLAS MAURICE: So this is, I haven’t found many places in the world, actually, I haven’t really found any, where you can get a Plan B in Latin America in such a community that is fully resilient, that is relatively affordable, and where you can actually make some decent cap rates, decent rental yields in the meantime.

DR. ANNAU: If I would invest here, I would build such a house. Nice house. I would also make a spare room somewhere as my deposit. So my personal things would go into the deposit. I would lock it up.

LADISLAS MAURICE: So a storage unit, cool.

DR. ANNAU: And I would say, well, I’ll come back in a year, I come back in two years, I come back in nine months, or in six months, you can rent out the home. So you rent out the home. Since we have no legal restrictions, we can say, well, in two weeks the guy comes. Remember, we also have a hotel. So if we have to evacuate somebody rapidly, we have 88 hotel rooms, so we can always put him in a hotel. Meanwhile, the landlord comes in, takes over, opens his deposit, puts out his personal stuff.

LADISLAS MAURICE: And takes his guns. [laughs]

DR. ANNAU: Right. And the good thing is since we have security here like nobody else in the whole country, nothing gets stolen here. So it’s like this is secure. And if you have invested anywhere in the world, you know if you go away for a few months, be aware that not everything will be there when you come back. Here, you can be sure that everything will be on its place when you come back.

LADISLAS MAURICE: Cool, fantastic. So I’m going to leave the two of you because I’m meeting with some of your settlers. We’re going to go shoot some guns.

DR. ANNAU: Good.

LADISLAS MAURICE: I’m looking forward to that.

DR. ANNAU: Good.

SYLVIA: Have fun. [laughs]

LADISLAS MAURICE: Yeah, I’ve been excited about this the whole day. So if you’re interested in finding out more about the community, there is a link below. And people from the community will get back to you with an information package, etc., and you can discuss with them.

DR. ANNAU: Right.

SYLVIA: Right.

LADISLAS MAURICE: Fantastic.

DR. ANNAU: Okay. Thank you.

LADISLAS MAURICE: Dr., thank you very much for your time. Really appreciate it. Sylvia.

SYLVIA: Thank you.

LADISLAS MAURICE: Thank you.

Gun-range fun

LADISLAS MAURICE: Cool. So Jan here is in charge of the shooting club. So there’s a club and there’s a shooting range here in the community, and he runs with the gun range and organizes shooting classes for people. Correct?

JAN: Yes, yes.

LADISLAS MAURICE: Cool. So I can see that you have quite a few nice toys here.

JAN: Yes, yes, very nice toys. And you could buy it very simple in Paraguay, it’s no problem. It’s a very, very free country, and it’s interesting, the people. Many people have guns but you don’t have so many accidents with guns. They are very–

LADISLAS MAURICE: Good. So what’s the process? So I need to have, if I understand correctly, I need to have permanent residency to be able to own a gun. Correct?

JAN: Yes, yes, you need to settler. If you have the settler, you go to the weapon store and say, “I would like to have this gun.” Then you pay a little bit money for the gun, and then the owner from the shop makes you the permission for the gun. And then you could take the gun maybe three, four weeks later to your home.

LADISLAS MAURICE: Okay. And so for my understanding, it’s you can only have the gun at home, in the house where it’s registered, and in transport in your car. Am I correct?

JAN: Yes, yes. But if you would like to carry the gun all the time, you need extra permission for this.

LADISLAS MAURICE: Okay, so concealed carry permit.

JAN: Yes, yes.

LADISLAS MAURICE: You can apply for, but which is more complicated to get. You need to change–

JAN: A little bit, not so much.

LADISLAS MAURICE: Not so much?

JAN: Not so much.

LADISLAS MAURICE: Okay, cool. And the price of weapons, so guns are not cheap here.

JAN: No.

LADISLAS MAURICE: So definitely more expensive than in Canada and the US. Similar prices maybe to Europe, but in Europe you can barely buy them, so that doesn’t really count. So typically, twice the price of the US for guns. Correct?

JAN: Yes, yes.

LADISLAS MAURICE: Okay.

JAN: Maybe I think for expensiveness, this hand gun here, it costs, in Europe, this hand gun here it costs in Europe €500 and here it costs €1,000.

LADISLAS MAURICE: Okay, cool. Okay. And typically, on the market, because here, you have, what, Czech and American guns, right?

JAN: Yes. It’s not so easy to buy American guns here because the American would not sell their guns to Paraguay, but they have some guns in store, and then they sell it to you.

LADISLAS MAURICE: Okay, cool. So typically, the guns are mostly from where, when you go to the gun shop here?

JAN: They come from Czech, Czech guns.

LADISLAS MAURICE: So Czech Republic?

JAN: Yes. They make very great guns from the Czech Republic.

LADISLAS MAURICE: Yeah, they do.

JAN: And some Turkish guns, and the ammunition comes from Israel, for example. Yes, mostly from Israel.

LADISLAS MAURICE: Okay. So ammo from Israel, and Turkish and Czech guns.

JAN: Yes.

LADISLAS MAURICE: Okay, cool. Interesting. Great. So we’re going to go have a little bit of fun with these boys here.

JAN: Yes.