Building a Costa Rica Real Estate Business Over 30 Years with Scott Cutter

Obviously we're in a much more mature market now, which is actually enjoyable because you start to sell to people not because they're going to get rich quick, but because we're helping them match lifestyle, legacy, family goals with the right area and the right property. You're not promising them the moon and the sun. You're just saying, you've earned it. Own it. This is a chance for you.

Every guest on this show has one thing in common. At some point, they looked at the life they were supposed to want and said, not for me. For today's guest, that moment came in 1997, right after he graduated from the University of Colorado Boulder. Most people take a trip like that to blow off some steam before coming home and getting a real job. Scott Cutter never really came home.

Nearly thirty years later, and one dual citizenship later, he can't imagine living anywhere else. He got his start working for a sport fishing outfitter, then ran the area's premier luxury boutique hotel in Manuel Antonio. It was there, watching guests from all over the world fall for the place the way he already had, that he started to see what Costa Rica could actually become.

So he made the leap. He and his brother Todd, who'd built his own travel business in that same small town, got tired of watching other people do real estate badly and decided to do it themselves. Today, that partnership — 2Costa Rica Real Estate — is the largest independent brokerage in the country. But Scott didn't stop at building the biggest brokerage in Costa Rica. He's also the sales director for Marina Pez Vela, Central America's largest full-service marina, known as the Billfish Capital of the World, where they haul 200-ton yachts out of the water like it's nothing.

>> Great to see you. Thanks so much for being here. >> Thanks Ross. Excited to be here. It's funny to listen to my own story. It's been an exciting three decades and one that's been full of a lot of challenges, but a lot of passion and a lot of Pura Vida as they say here, which is this pure life that I get to live down here in paradise.

>> So take us back to 1997. You graduate from Colorado and instead of coming home, you head to Costa Rica. What was it about that first stretch working at the sport fishing docks and then running that boutique hotel that made you think, I'm not leaving? >> The irony is leaving Colorado. Most of my fellow cohorts were starting corporate jobs, family, big cities, starting their corporate careers. Late nineties was a great time to be starting corporate careers, and none of it in general — I grew up in Alabama, everybody went to school at Alabama or Auburn or somewhere in the southeast, and everybody went right, and I wanted to go left.

It's just something in my personality — if everybody was wearing white, I wanted to wear black. Maybe it was contrarian, and I wanted to go as far away as I could. I think some of my desire to go to Costa Rica was that it didn't seem that exciting to stay. I felt like life was meant to be exciting, meant to be different. I came down, I actually had a job at a coffee shop and a sport fishing place. I was earning I think a dollar thirty an hour.

We drove from town to town. Every town we got to, I'm like, this is Mecca. We're staying here. And then we said, let's go to one more town. I started by the Nicaraguan border up north and got to a town called Playas del Coco. Was like, we're unpacking our bags. We found the Holy Grail. And then I said, we should check out one more town. And we kept going. I got to Manuel Antonio where I live now, and I don't think it was the job that made me stay. I remember pulling into this town on a rainy evening and I started to look for a place to rent for six months the next day. Something just clicked. It was this romantic rainforest, beautiful little village.

Doors open for a lot of people in their lives, and I think what limits most of us from achieving our potential and living our dreams is our own fear of what going through that door means. When I was here, it felt like the door was closing. But I got fired actually from the coffee shop, which is a whole other story. I got a job as a hotel receptionist at that hotel that I ended up managing. I was making a thousand dollars a month. There wasn't enough rum to be drunk with that salary and this little rainforest town.

I'll tell you a quick story at that hotel. I was a bored receptionist, played all the games of solitaire that existed on the computer, and in one argument, there was a little reception below this treehouse where the owner lived, and he had an argument with his accountant, his general manager, his food and beverage guy, and they all walked out on him. I knocked on the door and I said, hey, why don't you add up all their salaries, cut it in half, I'll do all their jobs, because I'm bored and I don't think they're that good at it. I didn't know what I was doing, but I knew that I'd be willing to work hard. I ended up running that hotel.

>> So you and your brother Todd, you ended up building 2Costa Rica Real Estate together. How do you build a business in a country that isn't one you grew up in? >> My brother is a year younger than me. He graduated in Boulder, then came down on summer break when I came down, went back to finish college, and then came down. He opened up an online travel agency. It was a receptive surf tour company. Surfing was the first people coming to Costa Rica tourism-wise — they were surfers. We spent five or six years working independently of one another, but basically every night speaking to one another about the ineptitude of professionals we tried to work with, and the amazement that the bar in so many areas is set low.

He ended up buying out his partner, selling his online travel agency at the same time that I had kind of left the hotel business and gotten into real estate. I worked as an agent in a real estate firm here, made some sales, but realized that I was making good money, I wasn't necessarily on board with the way I was making money. My wife got pregnant with our first daughter, and I realized that if I'm going to instill anything in my daughter, it's going to be values about doing things the right way and never giving those up chasing a dollar. I didn't like the way the business was structured, backdoor attorneys, a little bit of the old West kind of deals here.

That's kind of where 2Costa Rica Real Estate, our business, was kind of born. After a lot of independent trial and error, it just kind of manifest itself because I was in the real estate field and my brother was in the tourism field, but had clients that were so trusting in him because he planned their vacations that they were going, hey, we wanted your real estate. Will you help me, Todd? That's kind of where the idea started, out of my living room.

>> So how many of your clients now are local to Costa Rica? How many are coming from other countries? >> Costa Rica is a small country, but it's very diverse. Our business models are diverse. Our Pacific Coast office is tourism based. It's ninety percent North American, USA, Canadian buyers on the coastal market. In San Jose, the Central Valley where Todd lives and where our main marketing team works, it's a metropolis of three and a half million people. Our buy-sell pool is probably 60 percent local Costa Rican or international expats from other areas, dignitaries, ambassadors, international business people. Foreign buyers in the Central Valley are probably a 50-50 split.

I use a lot of analogies in my life. When we came in the mid-90s, Costa Rica was like an infant. It's incredibly perfect while it's incredibly imperfect. The natural beauty, the rawness of it, the pureness of it — it hadn't been touched by institutional money. When I moved to Quepos, you couldn't get a phone line. There was no cable TV. There was no internet. How do you sell real estate in that scenario? When I was a young realtor, they brought in phone lines by the pair in one of the big boxes, and I bought fifty phone lines. If you bought a house from me, I would give you a phone because you couldn't get a phone.

Then we went through a phase of a twenty-year process where I used to tell people in the last five years that Costa Rica is kind of in its teenage years. Like a parent, when your kids are teenage, you're like, I need to send this kid to military school. But you haven't. It's just growing pains to go from something that's innocent and pure and untouched towards all of that maturation of a destination: regulation, better infrastructure, gentrification, security, all these things that are part of any growing market.

People that loved Costa Rica in the 80s and 90s for how remote and raw it was, probably don't love it today, and probably won't love it in 20 years. The people coming here today would never have thought of coming and enduring what I endured 20 or 30 years ago in terms of roads and infrastructure. I think Costa Rica is in that transition now from its tourism and real estate teenage years into its really full-grown growth maturation cycle, which is really exciting for me. We're now starting to see the introduction of an MLS, financing coming through, real international developments coming through in brands and quality control and culture.

You've got to keep in mind, Costa Rica is a place we're just now seeing the onset of an MLS. It's still at less than 40 percent adoption rate. Local knowledge is critical. It was easy to a certain extent back in the day, because it was so cheap that you could almost tell people, look, look at this view, look at the price. When I was selling ocean view lots in Manuel Antonio for $75,000, people are coming down going, what do you mean I can buy an acre here for $100,000? There was a time when I was selling real estate at the beginning I would tell people, you're not doubling your money every two years, you're stupid or greedy. Because it was that fast the growth.

Obviously we're in a much more mature market now, which is actually enjoyable because you start to sell to people not because they're going to get rich quick, but because we're helping them match lifestyle, legacy, family goals with the right area and the right property. You're not promising them the moon and the sun.

>> Tell me about 2Costa Rica now. Have you scaled? >> It was Todd and myself and then one other of my buddies who had lived down here that I knew from a property management company that was with us when we started the company. He's still with us today. We were making sales, three of us, no office, working out of my house. Then we got a small little office here. After a couple of years, Todd and I got to this discussion — we had hired some administrative help, we brought on a couple of new agents because we thought there was a way to grow.

But it got to this critical point where by having more agents and administrative staff and two offices, because my brother left Quepos and went to go live in the Central Valley — the issue with the overhead is you've got to sell more, or the overhead's just dead weight. There was a time, probably five or six years into our business development, we said, you know what — Todd's a great sales guy, so am I. We could just cut everybody loose and probably be making three, four times the amount of money we're making now by just you sell, I sell.

The issue with that was our business is only as good as Todd's well-being, Todd's ability to work. So we started to look at wanting to have something that was going to be bigger than just me and bigger than just Todd. We had the discussion and had to make the decision: do we commit to giving up a little bit of our own luxury, wealth, independent wealth, comfort to build something bigger? We now have the largest independent brokerage. We've had the opportunity to purchase almost every franchise you can imagine — Sotheby's, Christie's, The Agency, Engel & Völkers.

We've been approached by a host of international companies to take their brands here. We've analyzed it hard, but never saw the real value other than the name on the door and a quick validation to the open marketplace of you're people you can trust because they have a brand. And we've spent so much time, Todd and I, working on establishing our own reputation in Costa Rica as honest, hardworking people. Todd and I kind of committed to this integrity-driven approach. It was one of the reasons why we never took on a foreign identity or bought a brand, because we almost felt like we were in a certain way selling the path to integrity by buying it.

Now we've got ten different areas that we service. We have over 50 agents nationwide. We have an administrative staff of about eight people that just do marketing, deal management, et cetera, for our agents. We could probably have a hundred agents. We're very selective. We don't necessarily recruit top producers. I go to a lot of real estate forums and hear, how do you recruit top producers? Most of my top producers now were just great people that I knew in the community that we converted into real estate people because we told them that you can learn real estate, but you can't learn the kind of core values that kept me here.

One of my top agents in Manuel Antonio was a hotel manager here. Mother, family lady. COVID comes. There's no hotel business, the border is shut down, can't feed our family. You should become a realtor. We have a lot of our agents who are photographers, old ex-tour guides, hotel people, restaurant owners who we just know are amazing individuals with core values that we share. Then we take them under our wings and we teach them real estate. We've been more successful with that than trying to recruit top producers that are do anything for a sale.

Todd and I are both obsessive communicators and workaholics. At 4:45 in the morning, I'm texting him because I know nobody else will answer. And he's like, Scott's already up working. Then at 9:45 at night, when I've passed out because I woke up at 4:45, he's getting the last word in. We have weekly sales calls with all of our offices. We're highly involved with our agents. We pay for all the marketing, all the signs, all the open houses, all the business cards, all the photography, all the videography. Their first deals, because they're not typically experienced realtors, are deals that I give to them and then I do for them, and I still pay them half a commission to teach them physically how it happens.

>> Tell us about Marina Pez Vela. >> The marina is a passion project for me. It's owned by a Nicaraguan and Costa Rican ownership group. It's a huge development. They own banks and insurance companies and food and beverage companies and retail firms. They have almost a billion and a half dollars of investments in Costa Rica. But they never did anything coastal. So they bought this marina from the original developers, a Texan group, seventeen years ago and they brought their recipe.

They brought their special sauce that worked in the Central Valley of Costa Rica. They build commercial buildings and residential buildings and lease it to themselves and employ the people and the people bank at their banks. They create ecosystems that are just unbelievably powerful and self-sustaining. But they brought a lot of that culture from San Jose to this small town at the coast. They quickly realized that the special sauce for the chicken doesn't work on the fish, for lack of a better way of saying it. I think this is an anomaly for a lot about life and about real estate in general.

They hired me because they needed someone that understood tourism and foreign investors and North American mindset and expectations, but they also needed someone that could communicate at a local level. They brought in a lot of their young hot-shot recently graduated business guys to come down and run here, but they come from wealthy families and they come from privilege and they didn't understand how to communicate with the very staff that was going to create a lifestyle and environment in the community. They came in with a bit of an uppity attitude, and the local community wasn't getting it. They weren't getting the buy-in.

This wasn't about making this a little United States or a luxury marina. It was about understanding the history and the culture of this area. One of the first things we did is we actually hired a sociologist to come and interview the community and write ourselves a book. We hired an artist and a sociologist, and they wrote a book about the history of this town and the community and then how this marina could fit into that. That became our Bible for how we needed to interact.

This area was all banana plantation. In the 30s and 40s, Chiquita Banana — this literally was a banana republic. There was a railroad line that came down the coast. The Army Corps of Engineers had built a port right outside the marina, and that's where all the banana was exported. There's this love-hate relationship with the company. They built towns, they built cities, they gave jobs. But there was also a hate relationship because the company had a private area for the company execs. Everybody else lived in their little shantytown. Then there was an area called the American Zone that had its own hospital, its own gym, its own bowling alley.

From the onset, my role here in addition to sales director was to help create a space that brought the community in. So we're one of the only big corporate luxury developments — the gates are open. This is a public marina. We do school graduations here and free movie night on the big screen TV. We have Halloween. It was a hard thing because we had to invest a lot of money for the buy-in so that people would begin to trust that this wasn't a scam to say, we're going to steal a part of your patrimony and justify it with jobs and tax revenue.

This is going to be a place where you and your family can grow up, where your kids are going to have a safe place to come and enjoy. I want nice things and I work hard. Creating a space where local mates — guys that work on boats and work in the yard — can share at the bar with a billionaire that owns the boat they work on was a very big challenge. But it's kind of been our core DNA. The real magic here is that our billionaire clients that bring in their fifteen or twenty or a hundred million dollar boats, for the first time in a long time feel like their wealth is giving them the luxury, comfort, security, and infrastructure they want and deserve for their assets, but not at the expense of a sense of authenticity that most of the places they travel end up going to.

Everything's perfect, but it's perfectly bland. Our special sauce, and a part of my special sauce in life here, has been having that duality of a little bit of all the cultures. Costa Rica is a stunningly natural country. The beauty here is off the charts. But the easy answer to what's different is there's no Costa Ricans in those other countries. The Costa Rican people — there's this impossible to describe, almost ethereal experience that most tourists realize when they get here. It just felt so good.

It's a Central American country. They abolished their army in 1949 and said we're going to dedicate all that money to health care and education. Neighboring countries have huge histories of civil unrest, army, dictatorships. But Costa Rica became the Switzerland of the Americas, just committing to education, health care, caring for people, and that translates into a persona because generally they have three generations now of Costa Ricans that were raised with this mentality. Just watching my kids' curriculum, what they teach the kids in school about environment, passion, sustainability, peacefulness, the value of hard work.

I was scared raising my kids here because I'm like, my God, I'm sacrificing my kids' future because I decided I want to live in a small town on the beach. I told my wife, as soon as the kids are out of kindergarten, we're out of here. We're going to go to San Jose, there's some English schools there, we've got to get them in there. Then first grade was like, they're just learning how to color, how much better can they teach four plus four? We'll stick around till sixth grade, but then all bets are off. Both of my kids graduated here.