EFAM | Escape From America Magazine

Argentina: Fractional Vineyards Make Wine and Cents

Your dream can be true

10 Acre Malbec Vineyard with 2 bedroom 2 bath Casita Fractional Ownerships USD $12,000 Per Unit

How many of us have dreamed of owning a vineyard, leisurely walking among our very own vines, picking grapes at harvest time and watching them magically turned into a delicate and delicious wine?

Pondering the possibility of owning a vineyard is a dream universally shared by millions of people around the globe and has been for thousands of years. But as we well know reality often smothers the flames of fantasy and the price for that “dream” can soar beyond the reach of our pocketbook and outside of our comfort area of what we consider “prudent investments” for our hard earned dollars.

Fractional Ownerships have become very popular and understandably a viable alternative. Knowing that one will not be using a home/condo 52 weeks a year but still being expected to pony up and pay 100% for the item and 100% of its annual expenses has motivated many investors not to abandon their dreams, rather to take a serious look at another approach of capturing that dream, “Fractional Ownership”.

Fractional Ownerships are now offered for:

  1. Luxury Condos and Homes
  2. Luxury Automobiles
  3. Luxury Yachts
  4. Luxury Jet Airplanes
  5. Luxury Art (yes, you can have a Picasso or Renoir part of the year)

La Vida Buena Offers 1/25th Vineyard Fractional Ownerships

Here is your opportunity to “put your toe” in the water and if later on you want to take the proverbial “plunge” and purchase 100% ownership of a La Vida Buena Argentine Boutique Vineyard your initial investment in the La Vida Buena Fractional Ownership will be fully credited plus an additional 10% profit. That is how confident La Vida Buena is about the value of its Fractional Ownership Program.

US$12,000 Investment for a 1/25th Vineyard Fractional Ownership

La Vida Buena Vineyards has made it possible for you to own part of a professionally planted and managed 10 acre Malbec vineyard that is nourished by the melting snow from the nearby Andes Mountains and delivered by the meandering Atuel and Diamante rivers.

What can I expect my US$12,000 investment to produce in income?

This is an excellent question and the answer depends of many variables, however, there are certain equations that can be utilized to arrive at realistic estimates and that are employed by many large, long established vineyards.

Before you delve into the figures below bear in mind that enhanced profitability requires a vineyard of 50+ acres (the major reason behind the La Vida Buena Vineyard’s 108 acre development) plus a worker’s house, tractor with implements, several vineyard workers, Vineyard Manager, Agronomist, Accountant and an Enologist to help produce great wine.

It may sound daunting, however, attractive returns can be realized by a smaller vineyard, like a La Vida Buena 10 acre fractional plus a 2 bedroom 2 bath Casita that adds both charm and additional income through its rental program and when available, can be used by the fractional vineyards owners when visiting their investment.

US$12,000 Per Investment Increment

Newly Planted in 2010  -  10 Acre Malbec Vineyard

Grape Yield Kgs.      Price Per Kg.            Gross Income US Dollars

2011    Year #1              -0-                       NA                                NA

2012    Year #2             -0-                       NA                                NA

2013    Year #3          20,000               AR Peso 2.5             US$12,820.00/ PI*$513.00

2014    Year #4          30,000               AR Peso3.0             US$23,077.00/ PI $923.00

2015    Year #5          40,000               AR Peso 3.5             US$35,898.00/ PI $1,436.00

In Year #5, after deducting vineyard expenses of maintenance, water, taxes etc. and harvesting costs (someone has to pick 88,000 pounds of grapes and cart them of to the Winery) your investment of US$12,000 would yield an annual income of $1,868 for a ROE of 15.6% and a ROI over 25%.

Now that is something to consider especially with exports of Argentine wine to its #1 customer, the USA (Canada is 2nd and Brazil now 3rd) increased 43% in 2008, 41% in 2009 and is up 19% the first five months of 2010.

Add to latter the fact that Robert Parker Jr., world renown Wine Critic, has graced many Argentine wines with ratings from 92 – 99 points and Wine Spectator recently released a long list of Argentine wines, red and white, that ranked between 87 – 90 points, the stage is set for you to take advantage o this opportunity..

If you would like to see how the Vineyard planting process evolves and the “bottom line” numbers on a Pro-Forma for a 10 Acre Malbec Vineyard with Rental Casita please respond and they will be sent to you by email with attachments.


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16 Comments

  1. Jonathan Lohr September 3, 2010 at 11:20 am

    I am very interested in further details on the fractional ownership opportunity offered here. Also in details on the purchase of the entire package outright? If entire package purchased outright is there onsite management for the sale and rental of the units?

    Thanks

    • Thomas Phelan September 7, 2010 at 7:25 am

      Pamela,

      Allow me to introduce myself, my name is Thomas Phelan and my wife Yvonne and I own the La Vida Buena Vineyards, a 108 acre development in San Rafael, Mendoza Province, Argentina.

      Although we have sold several boutique 5 acre vineyards in the marketing process we have received many requests regarding a Fractional Ownership VIneyard.

      So we decided to pursue it further and offer just such an opportunity. We have added to the project a 2 bedroom 2 bath 1,000 sq. ft. Casita for two reasons; first San Rafael has an acute shortage of rental units thus because the Casita will be nestled in a beautiful vineyard setting is should produce great rental income which inures to the Fractional Owners. The 2nd reason is to be able offer on an availability basis, somewhere for the Fractional Owner to stay while visiting.

      Even though this article broke on the Memorial Day weekend we have received ob]ver fifty inquiries and upon request, have emailed many Reservation Forms of which several have alt=ready come back completed. This is probably for two reasons, the quality of the project and its pricing and these people are familiar with Fractional Ownership projects.

      If you have additional questions I invite you to personally me at: Tomphelany@yahoo.com

      Sincerely,

      Tom Phelan
      La Vida Buena VIneyards

    • Thomas Phelan September 7, 2010 at 7:27 am

      Jonathan,

      Allow me to introduce myself, my name is Thomas Phelan and my wife Yvonne and I own the La Vida Buena Vineyards, a 108 acre development in San Rafael, Mendoza Province, Argentina.

      I invite you to contact me directly at: Tomphelany@yahoo.com

      Sincerely,

      Tom Phelan
      La Vida Buena VIneyards

  2. pamela powell September 5, 2010 at 11:50 am

    How many fractional owners are there at this time?

  3. Janet Gains September 6, 2010 at 9:49 am

    How many casitas are there on the property now? Are you assuming in your wine forecast that you have a good crop every year? Do you have hail netting over the vines? So basically your selling a 10 acre vineyard and a two br two ba house for U$D 300,000. I`ve looked on the internet and it seems to me that properties of this nature can be purchased in San Rafael for about a third of this price… Maybe I´m missing something.

    • Thomas Phelan September 8, 2010 at 9:40 am

      Janet,

      Thank you for your interest and questions.

      On the surface and at first glance, your calculations are basically correct and I am reasonably familiar with competitor web sites and vineyards that are being offered as I do work with (on occasion as a broker) for these competitors.

      Addressing your question about averaged grape yields, my Pro-Forma takes into account good years, bad years and average years. It does not include any disastrous years, e.g. 0% production, but this certainly could occur as in any farm project and as I recall also with stocks, bonds, mutual funds, real estate etc. I used to say if you want guarantees buy US T-Bills but …., well that’s another story

      I bite my lip when I hear someone say my prices are high when similar projects are, perhaps 50% less or in your example, 66% less and the assumption is made by surfing the internet. I am not taking issue with you rather I feel the adage “All that glitters is not gold” applies to vineyards as well.

      I have lived over here for over two years and have seen a zillion vineyards and I agree some that are larger are also cheaper but if one fairly compares two equal vineyards La Vida Buena is quite competitive. Also, as with any “Factional” the total cost is more than if you single handedly purchased that house or Condo or boat.

      Projects similar to ours would be US$45,000 to US$60,000 per planted withj some perks we do not offer or cannot offer, e.g. clay tennis courts or amazing views of the Andes Mountains. None of these projects offer “Fractional Ownerships” and their entry levels range from US$250,000 and up with NO Casita or house included.

      Our individual 5 Acre planted vineyard are US$129,950 with NETTING and the Fractional 10 acre Vineyard, excluding the Casita, is US$22,500 per planted acre and again with NETTING.

      It is understandably hard to appreciate or understand the vast difference between vineyards sitting at a desk and looking at a PC until you stand on the property and look at the surroundings, e.g. we are surrounded by neighbors with hundreds of acres of Plum and Peach trees and a well established Chardonnay vineyard. Los Alamos Estancia was built in 1830 and is our neighbor and rents rooms for US$200 per night per person and is where dignitaries stay and well as major Political figures when visiting San Rafael.

      Many vineyards border major, noisy highways, or perhaps next to a junkyard or heavy industrial complex.

      Many vineyards are poorly kept and may require 25% – 75% of the purchase price in remedial measures.
      Many vineyards have the wrong kind of grape, e.g. Pedro Ximénez that fetches 1/3 what a Malbec grape brings.

      Many vineyards have no worker’s house which means when your worker leaves for the day, who is watching your vineyard?

      Many vineyards have a shoddy worker’s house desperately in need of repairs.

      Many vineyards have an antiquated tractor that is 30 years old and in desperate need of repairs.

      La Vida Buena has a brand new worker’s house built in 2009 and a bran new John Deer tractor acquired in 2010.

      La Vida Buena has a professional support staff; most vineyards do not, for example:

      1. Full time, 24/7 on site worker who watched the vineyard and Casita
      2. Off site workers
      3. Vineyard Manager
      4. Vineyard Agronomist
      5. Argentine CPA who makes sure everything is handled correctly
      6. Enologist

      I could ramble on but hopefully people will understand that until you set foot here in Argentina it is fair to either yourself or La Vida Buena Vineyards to judge from a PC.

      If you ever visit Mendoza Province I would love to show you our La Vida Buena Vineyard’s development and what our competitors offer.

      Sincerely,

      Tom Phelan
      La Vida Buena Vineyards

      • Janet Gains September 10, 2010 at 1:39 pm

        Could you please answer the question from Pamela of how may fractional owners you have now and my question of how many casitas you have built ready for occupants.

    • Thomas Phelan September 14, 2010 at 5:34 am

      Escape Artist Readers

      I have prepared a three page reply to Mr. Horst and in particular the article he refers to.

      If you would like a copy please email me at: Tomphelany@yahoo.com and I will gladly
      email a copy to you.

      Tom Phelan
      La Vida Buena Vineyards

  4. TahunaSky September 12, 2010 at 10:43 pm

    I have been looking at vineyards in the san rafael area of mendoza, and there are alot out there that are around US$3,000 to $5,000 per acre, developed (income producing), and around US$1000 bare. So this fractional owner ship is not cheap, and from my point of view the only thing going for it is you dont have to do anything except hand over the money.

    • Thomas Phelan September 30, 2010 at 10:07 am

      TahunaSky,

      Interesting comment. Indeed there is acreage in Argentina at US$500.oo per acre.

      My first question is a qualifier; you state:

      “I have been looking at vineyards in the san rafael area of mendoza, and there are alot out there that are around US$3,000 to $5,000 per acre, developed (income producing), and around US$1000 bare.”

      When you say ” I have been looking at vineyards in the San Rafael area …” do you mean you actually set foot in San Rafael, or was your searching done on the internet?

      I cannot begin to fairly answer your statement without knowing how your research was conducted, i.e. by internet or by physically spending time in San Rafael.

      Please advise and I will gladly reply to your statement.

      Sincerely,

      Tom Phelan
      La Vida Buena Vineyards

  5. Rojin September 16, 2010 at 5:00 am

    Thank you for your interest and questions.

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  8. Lisa R January 14, 2012 at 2:30 am

    Am I reading this right? My annual income would be $1,868. Is that just for the wine? I understand if you wouldn’t know about the rent income. But if there is some, it would be added to the $1,868., right?

  9. Miguel August 18, 2013 at 8:59 am

    Por favor enviar los detalles “If you would like to see how the Vineyard planting process evolves and the “bottom line” numbers on a Pro-Forma for a 10 Acre Malbec Vineyard with Rental Casita please respond and they will be sent to you by email with attachments.”

    El boton de consulta no funciona.

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