Of all the topics that I wrote about in a recent post, I received over a dozen responses for the mention of two simple words: rural cult. I actually wasn’t even writing about cults or anything rural, but clearly those two words struck a chord.
I was talking about investment opportunities in the near future:
“If real estate prices come back down in the US, you should not be afraid to act. There is no other real estate market on earth that is as liquid, able to use financing, and tax friendly as US real estate. I can’t wait to start another creative real estate project in the coming years. (Something with some wilderness, combined with exclusive community, all blended with privacy. Basically a rural cult.)”
If you’ve ever met me in person, you know I have a dry humor. Of course “rural cult” sounds horrible and creepy. But it’s hard to imagine a remote private community in the middle of nowhere as anything other than a place where a bunch of weirdos gather to light things on fire and discuss secret plans to take over the world. (I guess that sounds kinda fun, too.)
Seriously though, I would like to build a community that incorporates wilderness, exclusivity, and a strong community. The community doesn’t necessarily always have to live there. They can be all over the world, and visit the rural cult location during different times of the year.
This is something that I’ve thought about for a long time, and now have the knowledge, network, and resources to execute.
Before I share details of how I plan to make a rural cult come to fruition, let me share some of the hard lessons I’ve learned through good old fashioned experience.
Visiting a Rural Cult in Chile
In February of 2013, I traveled to Santiago to check out the region and get some surf at the nearby big wave spot, Punta de Lobos. Chile is a beautiful country and my first trip there did not disappoint. Even though I had to wear a hooded wetsuit with gloves and booties, the surf was excellent (and scary big).
Before I left for the trip, I got in contact with a man named Ken Johnson who was the co-founder of a community called “Galt’s Gulch Chile,” or GGC for short. Ken was introduced to me by Jeff Berwick, another GGC co-founder. I met Jeff a couple of times in random cities – the last being sometime in 2014 in Cancun, where he, unknowingly to me, ran up my bar tab buying drinks for strangers.
Ken and I had several email exchanges in late 2012, where he shared what they were building at GGC and offered different ways for me to purchase land within their community (which included sending him bitcoin or delivering physical gold in exchange for title for a plot of land).
I took this screenshot from one of their sales emails, from late 2013, which I have saved in my inbox.
Although I told Ken that I was going to visit, he obviously didn’t think I was serious. He had told me about all of the progress they had achieved which included everything from a community clubhouse to organic farming facilities.
When I pulled up to the ‘front entrance’ of GGC, it was nothing more than a random cattle gate, on the side of a long dirt road, in the middle of nowhere. Unable to get a hold of Ken, I ended up finding a local winery and toured vineyards for the afternoon while drinking way too much wine.
The rise and eventual fall of GGC is an epic story that has been written about multiple times. Vice’s article, “Atlas Mugged: How a Libertarian Paradise in Chile Fell Apart,” does a pretty good job of summarizing the debacle. Or you can go down a rabbit hole via a website that GGC investors have set up.
Fortunately, I did not get caught up in the project, which ended up embezzling millions of dollars worth of investor’s money. I did, however, get a front row seat to watch the full life cycle of this project.
The Draw to Private Communities
To be fair, Galt’s Gulch Chile did have a unique appeal. The planned community advertised prioritizing privacy, freedom, and a community of like minded individuals. The problem, other than a bunch of crooks operating the project, is that you actually do need a lot of structure and clear sets of rules for a small community to operate successfully.
As much as people love to complain about the notorious HOA rules that many US planned communities have to abide by, there is a reason for the rules – it keeps neighborhoods nice and orderly! That’s why many high-end communities around the world often times have some of the strictest rules when it comes to what your front yard looks like and how you affect your neighbors.
Ensuring that a community looks visually appealing and operates smoothly attracts a certain kind of person. Someone who understands that structure, safety, and functionality creates long term value. And those people will pay a premium for those qualities in a community.
Building a Community in Panama
My second encounter with building a rural cult was in Panama. It’s actually still there today, with hundreds of undeveloped acres (actually, hundreds of hectares) within the hills of a remote area of Panama. I invested with several other close friends to acquire land in an area that we thought would be an up and coming region.
I could write an entire guide about what to do, and what not to do, when it comes to buying and developing land in a foreign country. Unfortunately, this guide would be far overweighted with things NOT to do, as I’ve certainly learned the hard way with many parts of this project.
Anyway, the land is still there today and some of it has been developed with some random spec homes. I recently received a small dividend from this project, from a sale of one of the homes.
The vast majority, probably over 99% of the land, hasn’t even been touched yet. In the long run I’ll probably do alright with the investment – land banking is one of the oldest forms of wealth preservation, other than hoarding gold.
But, when it comes to the idea of developing a rural cult, doing so in a foreign country is just asking for trouble. Yes, it sounds fun, exciting, and potentially profitable to create a community in a remote part of the world… but unless you are a masochist who enjoys doing things the hard way, with little upside and huge risk, I’d recommend sticking to your home country.
Building a Building in Colombia
Fortunately, I do have one example of a successful project that I’ve developed in a foreign country. To clarify, the reason it’s successful (currently yielding our investors a nice return) is because of the incredible on-the-ground management and operators. You can check out all the details of the project here, and schedule a trip if you’d like.
This project was just a single building with 12 separate apartments. So, no huge amounts of land to manage and the relative convenience of having a city to support the construction and ongoing operations.
I shared this Colombia project, after my Panama example, as a way to say, ‘been there, done that.’ …And I certainly only want to repeat the stuff that works!
Starting a New Rural Cult
I have a lot of thoughts about building a remote, private, like-minded based community. If you’ve been reading my Explorer Report for any amount of time, it’s likely that you already line up with most of my thoughts.
Of course, creating a community like this would also need to make financial sense, with real value creation being built over the long term. Early members of the community, which would involve financial commitment, would result in significant long term upside.
I don’t have an exact timeline for the development of this rural cult. But I suspect there will be tremendous opportunities to acquire large pieces of land in very desirable locations within the next 2-5 years. I’m already speaking with a variety of interested parties, so initial funding of something like this (i.e. buying just the land) is mostly secured.
However, the most important part of building a strong and valuable community is the people. So, drop me a line if this all resonates with you!