#201 – The Expat Files: Passport Changes, RFID Chips, and Real Estate in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came up to play and now as I wonder My thoughts ever straight Hi everybody I'm Johnny Mueller and you're listening to the expat files Living in Latin America the show that tells you what it's really like to live work play and or retire in Latin America I tell it just like it is so let's get started a Few shows ago I spoke about how it was imperative that you go out and get yourself a brand new US passport before those immigration bums get around to putting in a very high-tech RFID chip and

[00:47] That new proposed chip is nothing like that super underachieving chip That's in our passports now Then new one that they're installing soon is one that can be read through walls and hundreds of feet away Not only when you go through border checks, but when you walk through Sears and Walmart, too No kidding not to mention you'll be an open book for any hacker with a hundred bucks worth of electronic gear from Radio Shack You remember when I talked about that a month or so ago? Well, guess what? I've got a really scary update for you and I feel I just have to talk about it since two loyal Listeners Oscar and mark each sent me independently the same articles about the big changes that are happening right now with US passport application forms So let me read a few excerpts that'll shock you from economic policy journal comm

[01:33] Now when you hear this you're gonna think it's totally unbelievable, but it's absolutely true And it's all over the internet on both legitimate and government websites You get it legitimate and government websites Anyway, what I'm about to read you now is bound to make you squirm in your chair And the reason why I'm bringing this up right now is because it's very urgent that you hear this and act on it Right away if in the near future or any time at all you plan on expatting it down here to Latin America 95% of you guys are gonna come down here on your US passport So obviously it must be current and in good standing or you'll never make it through a first world border check and notice I said first world border check yep If you forget to cross a T or you don't dot an I they'll nail you or at least hold you up at a first world

[02:19] Border stop, but once you get to the third world things change a bit And if your papers and passport are somewhat close to being in order, but not quite well You've got that gringo advantage going for you in fact I've seen expats and gringos with expired US passports pass through third world land border checks quite easily Often the inspector doesn't even catch it and when they do sometimes I'll just say sir Senor Do you know that your passport is out of date or expired or whatever? Well guess what that doesn't necessarily mean they're gonna hold you up at the border and lock you in a room to sweat it out Like they will in the first world Generally, they'll let you through anyway, or just make you pay a little bribe. You know that's provided They even catch it But as you surely know if you're leaving the United States for any foreign

[03:05] Destination your papers and your passport will have to be in perfect order or you'll never get out of the Denver or the Cleveland Airport, and that's why this article should really concern you so listen up. This is from Thursday, October 18th 2012 entitled why you need a passport now and under the title in parentheses It says because soon for many it will be impossible to get one So here's what the US State Department is planning for future passport applicants It says the new US passport application forms are back after they were pulled from circulation a few months ago Due to the fact that they never went through the proper US State Department approval process But the new forms are back again, and they're worse than ever even though. They're technically illegal

[03:52] Then the article goes on to say this Ignoring massive public opposition and despite having recently admitted that it is already using the proposed forms Illegally without approval the State Department is trying once again to get approval for two new nearly impossible to complete passport application forms that would in effect Allow the State Department to deny you a passport simply by choosing to send you either or both of the new long forms Which have already proven to be nearly impossible for the average US citizen to complete without violating the strict requirements of the agency by committing errors or omissions And it goes on to say early last year the State Department proposed a new

[04:40] Biographical questionnaire for all new passport applicants, which would have required anyone receiving this new long form called the DS 55 13 go ahead and look it up on the internet Then you'll see just how impossible it is for anyone to fill the damn thing out completely Anyway, that long form requires you to answer bizarre and intrusive personal questions about everything from whether you were Circumcised and if so according to what religious ritual now, it's not April Fool's and it's not a Monty Python sketch I'm not making this stuff up and you really got to wonder who are the perverts that put this thing together down at the State Department, I'm sure the Homeland Security and the TSA perverts had their hands in this one, too

[05:26] Why because checking out your privates is one of their specialties Just visit a US airport sometime and listen to what else that passport form wants to know about you You're also required to give the dates and locations for all of your mother's pre and post natal medical Appointments, which is absolutely nuts. I mean who knows that stuff and there's even more lunacy Listen to this you somehow have to dig up your parents home address Where they lived one year before you were born. Yep You heard right their address one year before you were born on top of that They've got a section that asks you to list every single address that you've ever lived at since you were born and Then they want your lifetime employment history, too

[06:15] Including this which is almost impossible to believe they want the names and phone numbers of every single boss and supervisor You worked under for your entire job history. Now. Tell me that doesn't sound like it came out of George Orwell's 1984 but there's more after the State Department proposed that new form It was pointed out by many public advocates that almost no one would be able to complete the proposed new form No matter how much time and money they invested in research I mean suppose your parents are deceased then how are you ever gonna find out where they lived one year before you were born? The whole thing is a catch-22 because the State Department knows you're bound to screw up on some of the questions and or just leave Some of them blank and in that case they can refuse to issue you a passport and yes folks

[07:05] That's what it's all about The truth is there are way too many disgruntled Americans toying with the idea of leaving permanently not to mention There are already an estimated 10 million US citizens or more living outside the good old US of a that's an awful lot of people who've chosen freedom over living under Uncle Sam's thumb and the numbers are escalating because the natives are restless the fact is The US State Department in the IRS can definitely see the writing on the wall They know that US citizens can only be taxed and controlled when they're living within the borders of the good old US of a So what's the easiest way to keep Americans in the country like nice little sheep to be sheared? You just make it really difficult to get a passport

[07:50] And if you do get one make it easy to block or revoke on short notice Like for example if they wanted US citizen John Doe to remain in the country for some reason or another Let's say according to the government his crime is that he's an outspoken libertarian radio talk show host a kind of an expat Agitator, you know, well suppose they wanted to clip his wings All they'd have to do is dig back in his passport files dig out his application and look for errors They're bound to find him then by law his passport could be automatically blocked or revoked Now I ask you what other dirty little tricks does big brother have up its sleeve Already, they're ramping up the attack on our freedom of movement. Can't you see that? It's beyond obvious So what freedoms are they gonna go after next and even better question is what freedoms do we have left?

[08:40] I mean, what freedoms do you have left? Lucky for me. I opted out a long time ago. I hope you're getting a good picture of what your government's doing to you I hope it's sinking in and there's no need to get angry that won't help You should just be making your silent plans to get your ducks in a row, too That's the only smart thing to do so this new very intrusive passport application form thing isn't gonna go away And it's gonna get worse So anyway after some private civil litigation attorneys reviewed this new passport application a big stink was made about it And it went viral on the internet And did you notice how no big media news outlets reported on it at all? In fact the only place you could find out about it was on the internet

[09:28] Or if you went down and applied for a passport at the post office and they handed you the form Anyway a few months ago after a few thousand citizen denunciations the State Department withdrew the new forms and went back to the old ones and for the last three months until now the State Department refused to make any comments on the status of those forms and now we find out that during that time the State Department Was revising that passport application form again Now you can look at the revised form. It's called DS-5513 as well as a new form called DS-5520 and If you look them up on the internet, you'll see they still contain many of those unwarranted Offensive and impossible to answer questions now with the revised form the State Department

[10:16] It no longer wants you to tell the passport examiner about the circumstances of your circumcision Though I can vouch for most men when I say it definitely hurts and since you're a newborn when they do it you cry a lot And for some of us more sensitive souls even now the thought of it makes us cry And that's exactly what I would have written on my passport application had that question been posed Okay, so someone in the State Department got their hands slapped and they eliminated that particularly outrageous and stupid question But the new form still asks for the dates and locations of your mother's pre and postnatal medical exams Yeah, we all have that info at our fingertips, right? And how long she was hospitalized for your birth and a complete list of everyone who was in the room

[11:08] When you were born? Come on What planet are these guys from and the new revised form no longer asked for all the addresses at which your parents live before you were born Instead they want all the places you lived from birth until age 18 But there's more I'm looking at form DS-5513 right now and it says in section D under the heading schools daycare centers and developmental programs List any schools daycare centers or developmental programs you attended from birth to age 18 In or outside of the United States and in the column it says list the city state country and Dates of attendance, you know looking at this. I don't know if one in a hundred people know the answers

[11:58] But that's not all in section E of the same form DS-5513 It says under the heading of residences list all of your residences in and outside of the United States Starting with birth until age 18 and then in the columns It says list the street the city the state the country and the dates you resided there Talk about catch-22s since no one I know could possibly answer all those questions I certainly can't the US State Department can deny the issuance of your passport And even if you are issued one if any department within the US government like for example homeland security or the IRS If they want to hold you up or block you from leaving the country for any reason All they have to do is make a call to the US State Department

[12:46] Look up your passport application form and now the State Department can legally void or block your passport because if they want They'll find some screw up I mean what if you miss the range of dates you lived in a house back in the 1970s and by the way when they Ask for dates like that. Must you be accurate to the year the month the day the hour? Yeah, right the hour. How about the minute now? That's one huge gaping catch-22 right there, isn't it? And after reviewing all this stuff I just have one question how in the hell did Obama get a passport? He can't even produce his original birth certificate. Can he then again? I don't think I can find mine either Bottom line it's obvious that big brother has big plans for all you guys up in the States

[13:32] Uncle Sam's just making it harder and harder for you to leave looks like soon enough. You won't be able to leave at all So again, this is a warning get yourself a brand new passport now before those new application forms are officially approved And it's too late. In fact, I heard for some it's actually too late already in some passport offices They're giving out that new application form already even though it's not officially approved So obviously it's in the pipeline and my advice get off your dead ass and go to the nearest post office And if they give you one of the two new forms that I mentioned I tell it out of there and go to another passport office because I know for a fact that quite a few of the offices Are using the old traditional forms and you know what? There are tons of places you can apply for a passport in any city small or large

[14:18] All you do is you go to the State Department website Put in your zip code and it'll search for the ten closest passport offices. For example, I looked at my old Chicago zip code 606 1 1 and there are ten places I can apply for a US passport that are within three miles of that zip code All post offices of course handle the forms and a lot of government administration buildings. Anyway, I'm saying right now You're not stuck. Not all government offices have the new forms, but time is certainly running out Okay, enough said about that. Now. I'm gonna hit on a popular Latin topic Now I must say you expats and expat wannabes are really interested in real estate whether it's buying selling renting or building And like I've mentioned in a few past shows There are some mini real estate bubbles going on right now in some medium to large-sized Latin American cities off the tourist trail

[15:11] and on the tourist trail like Costa Rica and Panama there are some really big real estate bubbles shaping up and some of you have asked well if on the tourist trail like in Costa Rica and Panama and Rio and in those other Latin countries that have become quite expensive now like Argentina and Chile People are saying if they like those countries and they want to be on the gringo tourist trail for gringo camaraderie or whatever reason Why can't they just buy some vacant land? Even if it is relatively expensive and then take advantage of the really cheap labor and building costs that you see in every Latin American Country even in countries on the tourist trail because even though everything else might be first-world expensive there The cost of labor and materials are two things that are still very cheap

[15:56] Well at first glance buying land and building a place yourself seems like a great idea Because practically anywhere in Latin America once you've got the land the actual building costs are pretty predictable for example It's pretty easy to build first-world style construction for 50 to 75 dollars a square foot That's off and on the gringo tourist trail But only if you're contracting out the job yourself, and you don't hire a general contracting firm In other words you hire a very knowledgeable general foreman who basically runs the job for you or like I said before you hire a young Architect right out of school or just a couple years out of school Let him draw up your plans and act as the general foreman himself Then you'll be able to get a building for 50 to 75 dollars a square foot and by the way you'll find a lot of young

[16:42] Architects right out of school or just a few years out of school that don't have any architecture work at all They're working here and there, but probably like at a building supply company or a cement company not as an architect But rather as a very overqualified clerk or manager at a tile supply company or something the thing is Universities in every big latin american city are pumping out way too many architects as well as way too many business admin people Too many lawyers too many history and geography teachers and not nearly enough hard scientists computer engineers chemists Doctors and engineers. It's the same story up in the states too sure It's bad for the country and very poor planning by the government But it's very good for us expats because these young architects are just dying for a commission and a commission from a real life

[17:28] Gringo, that's like mana from heaven So anyway, it sounds like a great idea on or off the tourist track to build your own place If you can do it for 50 to 75 bucks a square foot That means you could build a nice 2000 square foot house for $100,000 or a little more and get exactly what you want because you've got an architect designing it from scratch No cookie cutter plans for 25 bucks out of the back of better homes and gardens unless of course you want cookie cutter plans Anyway, I talked a lot about that in previous shows But what I like to point out now is that because of these mini real estate bubbles popping up everywhere There are some tremendous deals coming online All you have to do is keep your eyes open and be a little patient And if you buy you won't have to go through all that trouble and pain and agony of spending a whole year

[18:14] Supervising and building a house because you know, if you don't have the temperament for that sort of thing It's a lot of stress. Have you ever built a house before then, you know what? I mean That's one of the top five things that initiates a divorce Turns out that up in the states when a couple goes through the process of building a house after five years nearly half The couples aren't on speaking terms anymore Anyway before you take on a house building project, especially in the third world There are a lot of angles to consider. There's nothing really tough about it It's not brain surgery, but it has its moments and can be nerve-wracking and remember because of the rainy season It always takes about a year Now listen to this before you get your hopes up thinking you're going to save a ton of money by building I'm here to tell you the bubbles are starting to fray around the edges In fact just this week I was looking at the yellow page's real estate ads in one of the big latin american newspapers

[19:03] In guadamala city to be precise where there is a nice little real estate bubble brewing Well, i'm here to tell you it's fraying around the edges and here come the deals. Listen to this I'm looking at the real estate insert that came with the sunday paper It's a 10 page full color glossy thing with all the big real estate agencies like century 21 and remax And a handful of big local real estate companies and developers, too Down here real estate is called bienes raices and real estate agencies are called immobile areas So look for those words when you're looking in the real estate ads Anyway, they're always putting out pamphlets and sunday inserts And by the way, that shows you how much the third world's being penetrated by franchises all throughout latin america century 21

[19:50] Remax and other first world real estate companies have landed So anyway the other day I was looking at one of these full color real estate inserts Specifically remax showing their houses and building and residential condos mostly high-end stuff that common locals could never afford In most of their ads they're targeting the rich the upper middle class and gringos and expats But here's what caught my eye and got me thinking that the bubble's about to blow I knew the bubble had been expanding in the last five or six years because all the signs and symptoms of a bubble are here Anyway, so here's what caught my eye I'm looking at a really nice first class first world residential tower in a very nice section of town Where remax has a number of three bath three bedroom condos for sale complete with custom kitchen cabinets and maids quarters

[20:36] Again with the maids quarters got a habit, right? All that in a 10-story residential complex that's got its own swimming pool and tennis court a health club and workout room And two covered parking spots for every condo owner And I actually took a walk through that place a couple of months ago and i'm thinking to myself they're probably worth like 135 000 but remax has got him at 198 Okay, so it's overpriced. But what's so special about that? Well, listen to this It just so happens i'm flipping through the newspaper to the yellow pages. That's where you see properties for sale by owner Anyway, guess what? I see that someone selling a three-bedroom condo in that very same building for 186 000 Now you see that's for sale by owner and that's pretty common down here people buy individual units for cash people with money

[21:28] And they don't live in them They just wait for the building to get done then they immediately put the unit up for sale like this guy's doing He probably bought in two years earlier A lot of people down here with money do that as an investment scheme So anyway, what you got is in the same newspaper on the same day You got remax selling a three-bedroom for 198 000 and someone in a different part of the paper and owner Selling an identical unit for 186 000. Okay, they're not that far apart, right? And you're probably thinking the condo that's for sale by owner Well, he doesn't have to pay the realtor's fee That way he can drop his price 12 000 bucks and make the same profit And by the way down here throughout latin america, the usual and customary real estate commission is five percent and with the big agencies

[22:14] That's hard and fast, but with small individual realtors and individual realtor groups You can usually negotiate that down to four percent or less Depending how hungry they are Anyway, so we got two condos in the same building for sale with a twelve thousand dollar spread But here's where it gets real interesting Guatemala city has four daily newspapers now in one newspaper called the siglo benti uno, which means 21st century in english They're pretty much noted for their classified ads. It usually has more ads than news So it's a little lower class of people reading that rag Anyway, that very same day I picked up a siglo benti uno looked in the real estate classifieds of which there are many Even low-class real estate crap located in places that expats wouldn't step foot in

[23:02] Anyway, there's a mix of things in that paper Ta-da there in the ads is another three-bedroom apartment in that very same building Advertised by owner, of course because the big real estate companies have their own publicity machine and they don't put ads in that paper But here's the shocker that brand new three-bedroom apartment That remax had for 198 000 bucks This owner is selling for 124 5 that's a savings of 75 grand over remax's price So what conclusions can you make you got to know this guy is desperate He's got to be in financial straits because if he sells at 124 5 he'll be lucky to break even But here's the thing if you're an expat who studies the market a little bit I mean just read the paper like I do every day and occasionally you'll find desperate sellers

[23:52] What you do is you make that guy a cash offer and I bet you can get it for 110 g's you heard me 110 g's and that's a 1500 square foot apartment So what can you conclude from all this besides the fact that it looks like the bubble is fraying around the edges Well for one thing based on this case study It's much better to buy than to build now, isn't it because you're getting a nice luxury first world brand new guarded condo with all the amenities for about 65 dollars a square foot and the beauty of it is you save all the stress it Takes when you build a place and you save a year of your life And you know down here in these little mini bubbles i'm talking about there's way too much supply and way too little demand They're building all this high-end stuff to us. It's not high-end But to them it is to us. It's middle class first world style or it's slightly better

[24:40] But only about five to maybe seven percent of the local population can afford that stuff here So in many cities throughout latin america, they're way overbuilt in that so-called high-end range Which means that's where all the bargains are going to be and as you can see by this example, they're starting already There's some really great lessons to learn from this number one Don't fool yourself into thinking you're going to get some kind of deal down here if you go on the internet And hook up with one of those big international real estate companies like remax or century 21 Oh and sure by all means get online with them and review their properties and stuff They have nice photos, you know But don't deal with them and don't think it's any better if you come down here and hook up with remax And let them cart you around to all their properties You'll pay way too much that way too. My advice look in the paper for distressed owners and better yet

[25:30] Look on the bulletin boards at the big grocery stores in the cities people post things there all the time Now that's where you can find some really great real estate deals and usually you can tell by how professional or amateurish The ad is written That's a clue as to how desperate the person is to sell So again to buy or build that is the question. Well, you'll save a ton of money building That's for sure on or off the gringo tourist trail Then you get exactly what you want. And if you have a sharp eye you'll get a first world building in every way But distressed owners are coming online all the time now, too For example a friend of mine bought a 1000 square foot two-bedroom unit in a really nice residential complex He paid 85 000 for it. It was very well built beautiful plaster and stone on the outside

[26:18] Together with excellent gardening with fountains and a beautiful sitting area But the interior decoration in the condos themselves was horrid That seems to be a common thread in a lot of these buildings even the new high-end ones the interior decorating in a word Sucks and often the building itself will be very solid and elegant Beautiful tile and wood beams and real marble countertop then the bathrooms in the kitchen will have cheap thin stainless steel sinks That look like they came out of a winnabago And the water faucets and fixtures will be cheap no-name brand stuff that'll leak within a year and worse yet The rooms will have arched ceilings with beautiful teak beams yet. The doors and the trim will be cheap composition board Sorry folks trailer court trim does not go with granite countertops, you know

[27:06] Anyway, my friend bought one of these 1000 square foot units and the first thing he did Was he ripped out all the trim and doors and the kitchen cabinets the cheap stainless steel sinks and faucets too? And he had it all redone and rainforest hardwood and first world plumbing fixtures and it cost him an extra four or five Thousand dollars, but now his condo looks like an absolute showplace a model home Oh and next time i'll tell you about the light fixtures You've been listening to the expat files living in latin america Coming to you each week from somewhere south of the border and don't forget you can email me on anything at all about latin America the expat files at gmail.com See you next time