Hi, I am a small investor in mexican real estate. I see there is very useful information in Bigger Pockets about hard money lenders and crowdfunding portals for Real Estate projects in the US & Canada. However, there is a void about the other next door neighbor, Mexico. With Federal Bank interest rates at 7%, mortgage rates at 12%, business loans at 20% and personal loans at 38-50% and inflation just below 3%, it presents an amazing potential for US funders.
I know there is greater country-risk but the spread between US-Mexico interest rates is huge, that's why Mexican bank branches of multinational banks are within the most profitable in the world. Some RE markets are driven by American expats in the coasts and the border (Baja California, Puerto Vallarta, Manzanillo, Mérida, Cancun) and Lake Chapala, San Miguel de Allende and other hotspots for US baby boomers retiring in Mexico, and Mexican-Americans moving to México, all prices traded in US dollars.
The economy of some Mexican States is booming and the real estate prices are ridiculously low with high potential for appreciation. E.g. I have house flip and house split projects that could easily duplicate a $50k USD investment in one year. I could start with those aimed to be sold to American expats.
Banks here only loan based on your personal income and they don't issue buy to let mortgages. I need private lenders or crowdfunding, but the few options in Mexico are geared towards new developments of large luxury apartment complexes.
Any ideas on where can I find US hard money lenders for about 15%-20% short term loans $50k-150k Usd secured by property in Mexico?
It would be great to start a Mexico investment group in Bigger Pockets if there isn't one. The potential for profit here is huge!
Thanks a lot
just curious what kind of investments you have done in Mexico since your post? I love Mexico and have always considered investing in Mexico but all of the information I've read makes it seem much safer to invest in the US although I love to visit Mexico and would love to visit there someday. I lived in Queretaro for a time and I am amazed how that city is booming. Here is a video of all of the projects going on right now: https://www.youtube.com/watch?v=y4Oz0aPQLek
Anyway, just curious how the investment scene is in Mexico. I heard that capital gains tax is 35% for RE sold in Mexico, is that right?
@Chris Potter wondering this too! It seems like such an easy win, but if it was I assume there’d be more people doing it. So what am I missing?
I have been investing in Mexico for a few years now and I’m working on solutions to offer financing to buyers and investors, as well as developing an information resource (for other countries as well). For your information, I have replied to plenty of posts about investing in Mexico in this forum.
I’ve just sold one of my brand new condos and I’m financing the buyer.
Your idea sounds interesting on paper but it’ll never work.
A private lender will only lend you anywhere if he can take a mortgage on the property and a foreign lender cannot and anyway would never want to take a mortgage on a Mexican property.
Even if that was a possibility, it wouldn’t make sense from a risk and return point of view because, while bank loans are cheap in the US and Canada, private loans easily run into the 15 - 20%. So, the opportunity you’re thinking about doesn’t actually exist. For an US or Canadian private lender to be willing to carry the additional risk of investing in Mexico, he’d require a much higher rate compared to what he can get in his own country. And it’s likely he wouldn’t wasn’t to do it at any price, because private lenders are not the most risk tolerant people out there.