Vacation Rental - Developer Financing - Mexico or Overeas

[Bob Green]

Hello All,

Any one out there have any experience with new construction - vacation rentals in Isla Mujeres or other tourist areas of Mexico? I  have been negotiating a deal and developer is offering financing.  The developer is asking for 25% down now and 25% at completion of property. They will finance the remaining 50% over 5 years. The rate is 9%. Wondering who out there has gone through the entire process and willing to discuss with me.

[Rich Weese]

run the other direction! I owned as many as six condos across the bay from Isla for over 30 years. There is not enough paper on BP to give you all the reason to stay away. Let me just start with the first problem. Preconstruction or currently during construction? The developer takes 25% from a lot of different buyers with the promise to deliver a unit. After he over sells the number of properties available,  mysteriously, he runs out of money and requires each buyer to put in additional funds. The construction stops and waits until enough new money is added to the property. My building was originally built to the third floor before construction stopped. It took three years before there was more money available. The   devaluation of the peso happened at the same time which made the money worth even less and required more. It was a nightmare getting it to the finish line.

I'm speaking as someone that was a licensed real estate broker in two states as well as someone that spoke Spanish and was a very successful businessman. Hurricane Gilbert and hurricane Wilma also didn't help. My location was the very best in all Cancun, across from senior frogs and nearly next door to Carlos and Charlie's. Run the other way if you're smart, in my opinion.