Hautter.com

Meet Chris Snell

Published in March - May 2008 edition of Cabo Noche magazine

By Derrick R Grahn on Sunday March 9, 2008

As publisher of CABO NOCHE magazine and having been surrounded by marketing all my life, powerful branding always impresses me. Before launching Cabo Noche, in fact before I lived in or knew much about Cabo at all, there were several Los Cabos brand names that cleverly pierced their way into my memory. After only one or two trips to “Land’s End,” Cabo Wabo was the first to make its mark. Then Squid Roe. Even Hotel California was well branded at the time too. The other was of course, Snell Real Estate.

After moving to San Lucas, I began learning more about Cabo’s booming real estate market and about Snell. Behind the Snell brand name is Chris Snell, a man with an acute vision of what is to come in this vastly transforming and once considered nomads land. And with his slick 6-seat helicopter and his 55-foot go-fast boat, Chris represents the new Los Cabos vibe of wealth, pleasure and success. He is living the “Cabo good life,” as most newcomers envision it. But his success and exotic effects did not come unearned; they are products of his hard work and fortitude as he built, from ground up, one of Los Cabos’ most successful luxury real estate brands.

 

NOVEMBER, 2007

Upon arriving at the Palmilla office for my interview with Snell Real Estate president Chris Snell, his executive assistant insisted Chris was on a very tight schedule. Having only fifteen available minutes, I quickly proceeded:

 

 

Derrick: The Bisbee’s has just finished, and it is no secret that you are the biggest sponsor of the Bisbee’s [Los Cabos] event. Why is that? Is it your attraction to sport fishing?

Chris: Money. (laughing) We are the only ones who can afford it.

No, it is not my attraction to sport fishing. Basically, both myself and Bisbee started here together at the same time. We were both small, new companies that were trying to do our thing. The Bisbee’s started as a four-man bet and I started here because I didn’t have anything else to do.

And to tell you the truth, the Bisbee’s was struggling for a little bit. It was the greatest event that Cabo had, in fact still is the number one event that Cabo has and to lose that event would have been a shame. About six years ago, the Bisbee family came to me and said, “Would you be interested in sponsoring us, to help us keep it going and do what we do?” And we said “Sure, I would love to because we want to keep it here for Cabo.”

The sponsors are a very important part of the Bisbee and we are the title-sponsor of the event –we have been for six years. We fished in the event for seven years. So I figure, if I ever win it, I’ll break even (laughing).

 

 

What “hooked” you first, real estate or Cabo?
Cabo. I was actually in the agricultural business in Texas and I had a real estate license, because I used to do some farm and ranch stuff. We marketed agricultural, cattle and horse equipment in the U.S., Canada and Mexico. I came to Cabo with Koll in 1991.

 

With whom?
Don Koll, who started the Palmilla Resort and Cabo del Sol. I came down in ‘91 and we started the Palmilla golf course and the Cabo del Sol Course in ’92 –I was on the development team that built both those courses. [That same year] I was promoted to sales director. I was the director of real estate for Koll for both Cabo del Sol and Palmilla for six years. In 1997, I left and formed my company, which is Snell Real Estate. This is our ten-year anniversary.

 

When and where did you meet Don Koll?
I met Don Koll in 1986 at a family reunion at the Palmilla Hotel. He was trying to sell us a one-acre lot in Palmilla Norte for $60 thousand and I thought, “How the hell would you get here if you owned it?” We had flown down here in a twin-turbo Commander and it took forever from Dallas.

I was intrigued by his company more than anything, which was the Koll Company. We didn’t have Internet back then. I had to go to the library and use microfiche and microfilm to look up Koll and I found out he was a billion dollar a year company. I wanted to go to work for a company like that.

So, I set my sights to work for Koll. I sold my business back in 1987, moved to Irvine, California in ‘88 and took a job with Dal-Tile Corporation selling tile. But I had one rule… I wanted Don Koll to ask me to go to work for him –I was never going to ask him for a job.

I got to know him and finally in 1991, he asked me if I wanted to go to work for him and I said, “YEP.” He sent me down here to stay in his ocean front house and I said, “Man, I am doing this.” After he hired me, I was in a one-bedroom apartment way in the back of San José going, “What in the hell have I done? (laughing) This was a dumb decision.”

 

What made you separate from Koll to start Snell?
I didn’t get along with the vice president very well. I have never really been a good employee. When I was at Koll, I was limited to what I could do. I couldn’t do any investments. I couldn’t build my own spec homes. I couldn’t buy a home and sell it –because of the restrictions of working for the Koll Company.

I could see what Cabo was going to be, I could see where it was heading and I knew there was a lot of opportunity.

The biggest thing was, that we were selling real estate that had liens on it. We were selling real estate that had no CCR’s  (covenants, conditions and restrictions), no tax ID numbers –nothing. And by the grace of God and the strength of Don Koll, we eventually got everything cleaned up. But I remember sitting, thinking, “Wow! If Americans will come down here and buy real estate with all these problems and still give you the money, think of how good your business could be if you did it right and you used third party U.S. escrow and title insurance here in Mexico.”

So I went and formed my own company and everybody thought I was crazy for leaving that big glove, that big warm glove of Koll and going on my own in Mexico.

 

 

How did you react to those people?
I didn’t. The first thing I did was align myself with the notaries and the attorneys and the guys that I could trust. [I tried] to get the local area real estate brokers to use third party escrow. The first time I presented it at an MLS meeting I was literally laughed at. One of those laughing was [a person who later] ended up stealing over $3,000,000.00 of a client’s money. Now who is laughing!

Snell Real Estate introduced U.S. third party escrow to Mexico. We were the first ones to bring it here. We also brought Stewart Title and brought in U.S. title insurance. Mitch Creekmore with Stewart wanted to hit all the area brokers but none of them would jump on board with Stewart Title. They didn’t understand why they needed title insurance.

I remember looking at [Mitch] and said, “We’ll do it. We’ll do the title insurance. We’ll pay for it. We will pay for the title insurance. Once we start promoting it, once the buyers say, ‘Wow, that’s what we want’, you’ll see the other brokers follow in like a vacuum.”

And they did. Now other brokers are offering escrow and title insurance. They now understand the importance of title insurance, and the importance of third party U.S. escrow. That was what really separated my company from the others. Every procedure in this company is here to protect our buyers. That’s it. We put the burden of transferring title back on the seller, where it belongs. “So you’re going to sell me a piece of property? I’m not giving you my money until I have everything I need from you”.

When you live here in Cabo, everyone always wants to know the scoop. Family, friends, even strangers want to know “why” and “what” made you move here. It starts out light, but almost every time, the discussions gets more serious. They start to imagine themselves living down here too.

So then come the next set of questions: “Can you work down here? Are you Mexican? Can you own a business here?” The last question is the “one” though, “Can you own property down here?” That is what people “really” want to know. They want to live here, I mean who doesn’t. Take a look around, it is beautiful here. This was great stuff, not just for me, but for our Cabo Noche and Hautter.com readers as well.

But the best part was, Chris was totally into it. He wasn’t trying to “sell” me. I mean, he was “living” it, he truly loves what he does, and it shows. He may have been in a hurry before I arrived, but from the looks of it, he wasn’t going anywhere, at least not before he had a chance to fully explain all of this to me.

Derrick: What is the main reason that a foreigner would buy property in Los Cabos or in Baja, Mexico?

Chris: The number one reason is as an investment vacation property. Our typical buyer is looking for a second, third or maybe even their fourth home. They’re looking for properties that they can invest in, they can own, they can use and enjoy with their family and ultimately turn around in five or ten years and sell while getting a nice return on their investment.

They are presidents or CEOs, or CFOs, but they’re still gainfully employed –they’re still working hard. They play hard. They like the Cabo market because it is easy to get in and out of. They can decide on Thursday evening, “Lets go to Cabo,” and by Friday at noon they’re here in San Lucas and they’re out golfing or fishing or laying by the pool. Or if they want to come down for the week and the husband has to fly back for a meeting or the wife has to fly back for some events or meetings, they can be back the next day. It is a very easy in and out.

Do you think Los Cabos or Baja are one of the “key” destinations in Mexico?
I think it is “the” key. With Don Koll and what we did back then, we set the standard. My first buyer was Don Diamond. He gave us a check for $550,000 on a pre-construction condo on the beach and he told Don Koll, “I’m not paying you enough for this.”

We could not get any of the banks to finance our construction, because the banks said, “You will never sell a home in Mexico for that value.” Well, we have blown by that and then some. Cabo has proven that with the right product, the luxury lifestyle, the right amenities and the right location, you can create this luxury resort product.

Now you are seeing a lot of areas in Mexico following suit. From Punta Mita, to Cancun. All of a sudden a lot of areas are saying, “Wow, we can do it too.” But Cabo is the proving ground. Every single luxury development that is happening right now in Mexico is using Cabo as a price point example.

What does Snell Real Estate specialize in?
Our specialty is development sales. We work with developers to develop the program, the price points, the product mix, the amenity package, how we’re going to sell it, how we’re going to advertise it and how we’re going to market it. We’ll work on the launch programs, whether it’s a major launch or a founder’s program, or whatever type of initial sales program they want to put in place. Once we’re involved we oversee all the closings, we oversee the formation of their CCR’s, we do a lot of the legwork and legal work. It is all included in the service.

What are the price points of the properties that you represent?
I would say that with the exception of a few home sites, we don’t have any product that is less than $1.5 million, and our high-end is up to around $15 million. The average price point of a luxury high-end home [in Los Cabos], is between $7 and $12 million dollars.

We’re seeing anywhere from a 12 to 25 percent return on investments per year, because it’s not your standard market product. This is high-end luxury real estate – the demand is there because we still have high-end luxury buyers.

Are the majority of your clients financing their purchases?
In our high-end luxury area, the majority of our buyers pay cash. Now whether they are going to their bank in the States or to their financial institution, saying “I am buying this home in Cabo, it’s $5 million, make it happen,” we don’t know.

We have a brand new agreement with Villas Del Mar and Deutsche Bank where Deutsche Bank is going to do a preferred lending program for the Villas Del Mar product. That is a really exciting program and it is exclusive to Del Mar Development, nobody else will have it. It’s a pre-construction program where you put 10 percent down, [pay nothing else] until closing. When the home is complete, you come up with another 20 percent. The balance is financed for thirty years, fixed for the first five. It is the first thirty-year mortgage to be offered [in Cabo]. No loan origination fees, no up-front fees –even your closing costs are financed in the loan.

 

What will you be focusing on in 2008?
Espíritu Del Mar, which is the new Del Mar development adjacent to Palmilla. We’re offering thirty-six homes in the first phase. There are a total of a hundred homes that will be in Espíritu. We have just finished the designs of the new Club Espíritu, which is an amazing amenity for the homeowners. With everything from a Pilates studio, to a pool, an aerobics gym and a juice bar. There is a moving river, what they call a “lazy river” that goes around a big one acre park. Also an amphitheater, three to four miles of hiking trails in the development and you have access to the Club Ninety Six Beach Club of Del Mar Development.

 

 

All right, enough shoptalk. Lets talk about the helicopter. Is the chopper for fun or…?
The “Snellicopter”… That’s what they call it. (laughing) Actually yes, the helicopter is for fun. My favorite vehicle my entire life has been a helicopter.

I remember at a very early age seeing a picture of Leonardo Da Vinci's illustration of a helicopter. That amazed me. That someone that long ago would have envisioned something like that, a helicopter, where you know… an airplane rides the wind, and a helicopter beats the wind into submission.

I do take clients up and show them around. We don’t charge for it, just whenever I’m flying if they want to go, they can go. We are now [setting it up], where we will have a charter available to fly clients. We’re going to have the aircraft legally permitted and so forth. I am taking flight lessons to learn how to fly the helicopter. Some guys like to surf, some guys like to race cars, I do like to race cars too… But, the helicopter is just something I have always loved. If it has an engine in it, and goes really fast and makes a lot of noise, I like it.

That brings me to the next question… the “go-fast” boat?

Chris: The Adiós.

Derrick: You call it the Adiós?

Chris: That’s the name of it, the Adiós. We always say, “Last to leave the dock, first on the fish.” It is a fast boat. But it is a unique boat; it is not a typical cigarette or go-fast boat. It’s actually a 30,000-pound, 55-foot long boat, with a very wide 14-foot beam. It has two Turbo Yanmar engines under the deck. It’s not a fishing boat –it is really a cruising boat. It’s a great boat to run up and down this coast at 28 or 30 knots, or if you really want to kick it up, you can top out at 38 or 40 knots. It’s got a great stereo and it’s great to snorkel or dive and take the kids out.

People who buy real estate from us typically get a few days to use it every year, free of charge. Any of our clients that have bought from us in the past get a preferred rate on anything we have. If they want to use the helicopter (when the charter service is ready), then [they’ll] get a preferred rate. If they want to use the Adiós, they get preferred rates. The boat is not a profit center; it’s a business tool.


Where do you see or how do you envision Los Cabos five years from now?
I see Los Cabos still as the number one destination in Mexico. Primarily because of our proximity to major destination centers; like Houston, Dallas, Phoenix, San Diego, Los Angeles, Denver and Las Vegas. There are no resorts in the world that have proximity to that much population, all within two to three and a half hour flight times located along the Tropic of Cancer, which is the best climate for resort destinations.

We have the cold Pacific waters on our west side. We have the Sea of Cortez on our east side and they mix right in front of us. The waters of the Pacific rarely get above 72°, the waters of the Sea of Cortez rarely get below 72° and we have the mountain range behind us that protects us from those Pacific winds. This Los Cabos area, the tip of Baja has a very cool microclimate that keeps our temperature an average of 78°. We are not in a high wind zone, we have a great climate, we have great water – great water temperature and lots of fish. There are not many places on the map that offer so many things. I see Los Cabos always remaining as the premier destination in Mexico.

Lets say “John Doe” walks in here tomorrow, ready to buy. How does the process work? How long does it take to find and purchase a property?
If they’re truly ready to buy something, it takes us one or two days. It takes only about three hours to do the drive and show them everything in the area. Our sites and our offices are set up, so that they are all updated daily. We can take them through our website and the big screen TVs and show them all the inventory that is out there. We can show them the virtual images that are available, the google images of where it is located. We can really do a lot here, before we leave to show them things. We find out what the client is looking for, what kind of amenities, what kind of privacy and what price point. Once we work through that with them, even for fifteen or twenty minutes, we pretty well know where they’re going to end up.

We put a client in the car and drive from one end to the other, it [takes] about 45 minutes. We don’t even get out. We simply drive clients through the developments. We show them what it is, we have a history of the product and we let them see it, [all] within their price point. And at the end of that tour, we ask them, “What interested you the most?”

Trends. What is the number one trend in Los Cabos real estate right now?
Private beach clubs are a big trend. Private aviation is a big trend. Private golf is a trend; it is an important trend for the high-end developer, but it is not such an important thing for the overall Los Cabos community. We still need our public golf courses. But your private, exclusive, high-end luxury communities –they’re trending towards private golf.We’re also seeing, in our age group of clientele, a big demand towards tennis and outdoor sports.

What is your biggest market right now, and what is the age range of your clients?
They’re averaging anywhere in their mid fifties, to their early seventies and are typically married. Grandkids and kids are a big thing now, ever since 9/11.

Last questions. What is in your Left pocket right now?
My cell phone.

And in your right?
My Blackberry™.


Derrick R Grahn is the Publisher of CABO NOCHE
 

 

 

 

Extras

Here is more of the interview with Chris Snell, which was not published in Cabo Noche Magazine.

Did you fish the Bisbee this year?
We did fish it this year. We fished on the Pegasus this year.

And how did you do?
We didn’t land any fish. We had three days of fishing. We caught a lot of fish on our pre-fish; Dorado and you know, big fish… a couple Marlin. But during the tournament we were pulling live bait –big twenty, twenty-five pound Tuna… So nothing but something very large is going to hit that.

On the first day we did get hit, but it didn’t stick. And on Friday at one o-clock, we were hit by a, something… that took our twenty pound Tuna and it was on for about four minutes. Ron Stone was the angler and it was just taking line, taking line, taking line and after about four minutes it just stopped taking line. And when we reeled it in, the Tuna was still there, but it had actually been swallowed by this fish, because the fins had already started to dissolve away from the [stomach] acids. But somehow the hook never set or never hit anywhere in this Marlin to you know, hook it. But it had to be a pretty big fish to be able to do that. So that was a pretty exciting five minutes.

Do you have any other gifts for your clients?
Yeah, we give them those giant bottles of tequila you see behind you.

And they were; these bottles looked more like huge, beautifully decorated porcelain statues.

Chris: It is a Claze Azul custom-made tequila bottle. The bottle is actually hand made and individually numbered. They are hand-painted and it takes over a month just to make one bottle. And it is filled with 100% Agave Tequila, by Claze Azul, which is one of Mexico’s premium tequilas. That is a gift that we give to all of our clients at closing…. The biggest bottle of tequila we could find.

How much tequila is that?
It has to be around two gallons. Maybe more.

Do you have your sites on any other places, like the Pacific or somewhere else in terms of having potential in the future? Or have people or developers tried to pull or lure you into those areas?
I have been asked that for years, to go into Punta Mita, Rocky Point, Vallarta, Correas, Cancun… and I just never wanted to get out. I specialize in Los Cabos, I specialize in Baja –this is what I do.

We had a lot of systems that we had to get into place and processes that we had to get in place that worked. And establishing all of these different entities to protect our clients took time and is a very hard process.

If we went into a new market, like Punta Mita and tried to figure out who all the right people are and put that all back together again like we did here, it would be complicated and take me at least a year or maybe even two, to figure that out. I just do not have enough time. There is enough business for me here.

We are expanding into Baja. We are going into La Paz right now. I think La Paz, with its airport, twice the size of the Cabo airport, with the islands that they have, with the proximity to all the boats –I think La Paz will be the next star coming up in Baja Sur.

The private beach clubs in these developments; are they housing other amenities, like restaurants?
Yes. They are on the beach. They usually have things like kayaks and other toys. The typical beach club has a bar and a restaurant and exercise facilities, ocean side pools and Jacuzzis, layout areas, music and all the bells and whistles.

The most unique beach club here is called Club 96, which is in Villas Del Mar. It’s on a swimming beach. And they actually have their own boat. We have a water taxi so that if you have a boat here or you want to use the Villas Del Mar boat, you can go right off the beach to the boats. You can snorkel on this beach. It is the best swimming beach in Cabo. So it is not just a beach club on a beach, it is a beach club on a “swimming” beach.

And how are those clubs funded?
The developer pays for the club to be built. And then we have dues. Our dues, for example at Club 96, are about $300 a month and $150 of that is food and beverage credit. So if you go, you get that back; if you don’t go, then you pay it .
 

 

 

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