RIO DE JANEIRO (Reuters) - Rolf Glaser zips his motorbike up the twisting alleyways of Vidigal slum, past a bunch of cheerful, gun-packing drug traffickers, and emerges at a cliffside plateau next to some demolished shacks.
A scrawny dog barks angrily from a nearby rooftop.
This, the German developer says with a straight face, could be Rio de Janeiro's next tourist hotspot.
"Can you imagine sitting up here on a terrace with a glass of wine?" he muses, motioning toward the sparkling azure Atlantic Ocean that filled the view on a boiling summer day.
"Do you think you would miss anything?"
Many Brazilians, Glaser admits, think he is missing something by planning to turn one of the hundreds of Rio slums -- whose names are synonymous with violence, drug-dealing and poverty -- into a trendy new spot on the city's tourist map.
Slum residents, many of whom clean the streets and tidy the homes of the rich, are often criminalized in people's minds purely by association with the "favelas," which are often controlled by drug gangs armed to the teeth.
But blond-haired, blue-eyed Glaser is one of a small, bold band of foreigners going where most Rio residents fear to tread, catering to tourists who want to see the "real" Rio beyond the sleazy Copacabana beach district and trips to the Christ the Redeemer statue.
The 52-year-old entrepreneur, who made his money in currency trading, plans to build around 10 well-appointed villas on top of Vidigal where tourists will be able to taste luxury and the gritty life of the slum at the same time.
And then there is the view.
In a city renowned for the jaw-dropping beauty of its beaches and forested mountains, Vidigal, perched high at the end of a swanky beach area, has a panoramic vista that would make real estate agents' eyes water.
That is already sparking worries that his investment, which he puts at around $500,000, may spark property speculation that could force residents to sell up and move to other slums.
Still, favelas remain largely off limits for Brazilian buyers, leaving the way clear for foreigners who have increasingly found them fascinating and chic.
"The city doesn't accept the favela -- there's enormous separation, forgetting and ignoring of favelas," said Dulce Pandolfi, a historian at the Getulio Vargas Foundation, who voiced concern that Glaser could spark "false illusions" for Vidigal residents.
"That's maybe why a Brazilian, even with resources and capital, isn't interested in investing there."
Films documenting the daily bloodshed such as "City of God" and "Elite Troop" have become international hits, and 'favela tours' have been a controversial growth industry in Rio.
Some foreigners have moved in to less violent and less impoverished favelas such as the huge Rocinha slum, not far from Vidigal.
Bob Nadkarni, a long-time Rio resident from England, helped set the trend by building "The Maze," a sprawling hotel and bar on top of the Tavares Bastos slum that attracts filmmakers and a cool, international crowd for its monthly jazz nights.
But his slum has a major security advantage -- the presence of an elite police station that keeps drug gangs away. Most other slums, including Vidigal, are only visited by police during rapid, violent raids.
Nadkarni, a 65-year-old former journalist who has lived in Tavares Bastos for 28 years, said Glaser was breaking new barriers by bringing tourists to stay in a favela with an active drug trade.
"I believe in the opening of favelas to opportunities for the people. Its people are denied all opportunities," said Nadkarni. He said Tavares Bastos now had residents who sent their children to private school, partly due to a tripling in property values since the drug gang left nine years ago.
"If he (Glaser) succeeds, he will have created alternatives, and alternatives are what people in favelas need," Nadkarni said.
Glaser, who has had links with Brazil for more than 20 years, says his vision is as much social project as business. He plans to offer funding for families to convert rooms in their mostly ramshackle homes into "bed-and-breakfast" lodgings for tourists and foreign exchange students.
Long-term foreign visitors, perhaps retirees, might be the target market for the hilltop villas, he believes.
No special security measures will be needed, he says. "Here, you have the law of the favela -- you don't steal," he said, referring to local rules that are enforced, sometimes brutally, by the gangs.
A museum, a juice bar, education projects and a giant image of a peace dove that could be seen across Rio are among other plans as he seeks to make Vidigal a "normal" part of the city.
"They have lost their pride," he said of slum residents, speaking at the luxurious cliffside Vidigal house he bought last year with stunning views from its wooden deck.
"During the day they use the beach but the restaurants and everything else are off limits. I would like to create a different reality."
Outsiders expecting dire poverty and urban warfare are often surprised by how peaceful and orderly slums like Vidigal seem. They can be calm, crime-free and relaxed for months -- until the next police raid or feud between gangs.
"I don't think foreigners will have any problems here," said Alfrandino Perreira dos Santos, a 75-year-old who has lived in Vidigal for 50 years. "I already see some go up to the top for the view -- it's the best in Rio."
Additional reporting by Douglas Engle; Editing by Kieran Murray and Doina Chiacu