Getting a US bank to mortgage a property in Belize

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Getting a US bank to mortgage a property in Belize

Investor · Raleigh, NC · Member since 2015 · 17 posts · 3 votes

Hey all,

Does anybody have experience obtaining a mortgage from a US based bank or lending company for an international property (Belize) and have any recommendations? I’m looking for options to finance a condo for vacation/rental income.

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Henry ClarkPro Member

Developer · Member since 2020 · 4k+ posts · 4k+ votes

@Jeff Ashachik

Not to dash a dream, but I would stay away from Belize, unless you have straight up cash in hand.

No US bank is going to loan in Belize. You will need to collateralize with a US located asset, if you work with a US bank.

Covid. This is the perfect time to buy in Belize since the Airbnb business is being hammered. About 2/3 of the homes in Placencia on the coast are for sale. A lot of UK and Canadian owners can't go there. Plus low level of tourist. Do you have the Cash to ride this out and take any future Covid hits?

Where are you wanting to invest? If San Pedro on Ambergris Caye, I would really study the infrastructure (water/sewer).

Groundskeeper or Gated Condo. The first consideration of any property, anywhere in Belize is security for the property. You either must have a live on site groundskeeper, or be in a Patrolled Gated Community.

Real Estate Market.

a. There is no market in Belize for Real Estate. Do not plan on making money buying and selling. Realize you are talking rental/vacation. Belizeans don't have this kind of money. A normal person makes maybe $40 Belize a day, which is USD $20. So your market is another foreign investor. Not that many people out there like that.

b. Vacation- lets say you have $250,000 for the condo. At say 5% interest on $250,000 whether you are paying interest on a loan, or could have invested elsewhere, that is $12,500 per year. For $5,000 per week, I can rent the "best" bnb house on the ocean side. If I don't like that house or Belize, I can take my $12,500 somewhere else. Change the figures as you see fit. Point is, I wouldn't buy a Condo for a vacation spot in Belize. Even if BNB.

c. BNB- very little property tax in Belize. Example on $1,000,000 property you might pay $200 per year. Very little other cost other than the unit itself. What is your breakeven in rental days? Can you sustain no rent for a year depending on Covid. To me at this time unless you have the cash to float, this is gambling.

d. You still want to buy. Then. Remember CASH is KING in Belize. You have to be more ruthless than ever in your life. If they say $250k, you say $150k. If they say Seller finance, you say interest only for 2 years while riding out Covid. If they say 25% down, you say 15% down. If they say 5 year balloon payment, you say 10 year. Remember their money is tied up and Covid has nailed them. Your helping them out. They don't bite, go to the next Condo developer. I would be looking for a Condo that has already been sold and the owner is selling. Normally all the furniture, golf cart, bicycles, boats, etc go with the property. Its not worth hauling back to the US/Canada/UK. If you buy new imported furniture expect to pay 75% or more import tax.

e. Buy what you can adjust, not what you want. With the above approach, your not going to buy your perfect situation, your looking for a deal. Buy what you can adjust later. You hate the bathroom you can adjust. You have to have a top floor, you cant adjust later, buy it.

f. Realtors. Working with a realtor tell them what your looking for. Then tell them you want to look at their oldest listings first and in that order. For "d" above to work, the owner has to have had there property on the market for 2 years or more. They have to come to the realization, there is no market in Belize, and they will have to reduce their price. Don't work with a NEW seller. They haven't come to the realization, they have to take a shave. You need to realize that already on the backend.

Remember the first consideration is a "Groundskeeper", otherwise your house will get stolen. The first thing we did was to build a Groundskeeper's house, not in the picture. This property which is 50 acres was on the market for 15 years. They reduced the price by about half, then a year later, we offered about half of that. The last thing we want is a 3 story house, but we adapted. Entire third floor will be a Veranda. Front of 1st and 2nd floors will be porches.

Belize is great. Lobster season. Lobster ceviche, cakes, quesadilla and tacos.

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Alan Lacey
Lender · Grand Rapids, MI · Member since 2019 · 175 posts · 82 votes
5y
@Jeff Ashachik I cannot imagine you will find one. Only thing I could imagine is a bank that services both, but more likely need to find a bank there that works with foreign nationals. Many countries, as I am sure you know, do not have same type of mortgage options we take for granted and have many hoops to jump through to be able to buy, much less finance.
1 Reply
Jeff Ashachik
OP
Investor · Raleigh, NC · Member since 2015 · 17 posts · 3 votes
5y
Thanks for the reply @Alan Lacey, that’s what I was expecting but also hoping wouldn’t be the case. The developer (who’s based in the US) is offering seller financing as an option too which I’m thinking might be easier than going through and international bank based on the exact concerns you’ve mentioned.
0 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
5y
@Jeff Ashachik
Not to dash a dream, but I would stay away from Belize, unless you have straight up cash in hand.
No US bank is going to loan in Belize. You will need to collateralize with a US located asset, if you work with a US bank.
Covid.  This is the perfect time to buy in Belize since the Airbnb business is being hammered. About 2/3 of the homes in Placencia on the coast are for sale. A lot of UK and Canadian owners can't go there. Plus low level of tourist. Do you have the Cash to ride this out and take any future Covid hits?
Where are you wanting to invest? If San Pedro on Ambergris Caye, I would really study the infrastructure (water/sewer).
Groundskeeper or Gated Condo. The first consideration of any property, anywhere in Belize is security for the property. You either must have a live on site groundskeeper, or be in a Patrolled Gated Community.
Real Estate Market.
a.  There is no market in Belize for Real Estate. Do not plan on making money buying and selling. Realize you are talking rental/vacation. Belizeans don't have this kind of money. A normal person makes maybe $40 Belize a day, which is USD $20. So your market is another foreign investor. Not that many people out there like that.
b.  Vacation- lets say you have $250,000 for the condo. At say 5% interest on $250,000 whether you are paying interest on a loan, or could have invested elsewhere, that is $12,500 per year. For $5,000 per week, I can rent the "best" bnb house on the ocean side. If I don't like that house or Belize, I can take my $12,500 somewhere else. Change the figures as you see fit. Point is, I wouldn't buy a Condo for a vacation spot in Belize. Even if BNB.
c. BNB- very little property tax in Belize. Example on $1,000,000 property you might pay $200 per year. Very little other cost other than the unit itself. What is your breakeven in rental days? Can you sustain no rent for a year depending on Covid. To me at this time unless you have the cash to float, this is gambling.
d. You still want to buy. Then. Remember CASH is KING in Belize. You have to be more ruthless than ever in your life. If they say $250k, you say $150k. If they say Seller finance, you say interest only for 2 years while riding out Covid. If they say 25% down, you say 15% down. If they say 5 year balloon payment, you say 10 year. Remember their money is tied up and Covid has nailed them. Your helping them out. They don't bite, go to the next Condo developer. I would be looking for a Condo that has already been sold and the owner is selling. Normally all the furniture, golf cart, bicycles, boats, etc go with the property. Its not worth hauling back to the US/Canada/UK. If you buy new imported furniture expect to pay 75% or more import tax.
e. Buy what you can adjust, not what you want. With the above approach, your not going to buy your perfect situation, your looking for a deal. Buy what you can adjust later. You hate the bathroom you can adjust. You have to have a top floor, you cant adjust later, buy it.
f. Realtors. Working with a realtor tell them what your looking for. Then tell them you want to look at their oldest listings first and in that order. For "d" above to work, the owner has to have had there property on the market for 2 years or more. They have to come to the realization, there is no market in Belize, and they will have to reduce their price. Don't work with a NEW seller. They haven't come to the realization, they have to take a shave. You need to realize that already on the backend.
Remember the first consideration is a "Groundskeeper", otherwise your house will get stolen. The first thing we did was to build a Groundskeeper's house, not in the picture. This property which is 50 acres was on the market for 15 years. They reduced the price by about half, then a year later, we offered about half of that. The last thing we want is a 3 story house, but we adapted. Entire third floor will be a Veranda. Front of 1st and 2nd floors will be porches.
Belize is great. Lobster season. Lobster ceviche, cakes, quesadilla and tacos.
7 Reply
Mike LambertPro Member
Investor · The Americas and Europe · Member since 2016 · 1k+ posts · 1k+ votes
5y
@Jeff Ashachik

A US bank will never lend you money to buy a property in another country indeed.

I second @Henry Clark. While I invest mainly in international real estate, I would never buy property in Belize, unless it's (mainly) or my own personal use. And then still. I replied to another thread on that topic some time ago, in which I mentioned even more reasons to invest there but I don't think there's much value to add to the picture already painted by Henry. And I'd go further. Even if I had the cash I wouldn't, unless I don't care about ever getting that cash back.
1 Reply
Paul Sandhu
Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes
5y
From "Clear and Present Danger" with Harrison Ford as Jack Ryan.
- [Jack needs a helicopter]
  Jack Ryan : I'm here to rent the Huey.
  Helicopter owner : We don't rent it anymore, but it is for sale.
  Jack Ryan : How much?
  Helicopter owner : Two million dollars.
  Jack Ryan : Uh, my pilot and I will have to take it for a test drive.
  Helicopter owner : Of course, you just have to leave a deposit.
  Jack Ryan : How much is that?
  Helicopter owner : Two million dollars.
  Jack Ryan : Umm...
  [Shows a CIA business card]
  Jack Ryan : Would you take a company check?
0 Reply
Travis Steinemann
Specialist · Mendoza, Argentina · Member since 2018 · 120 posts · 111 votes
4y
@Henry Clark hi Henry, love your detailed response on here. Would love to connect and get a little more of your background with Belize as I am interested in buying there too. Have 12 units in Baton Rouge, but want to do some str in Belize too and use it one month myself.
0 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
4y
@Travis Steinemann
Anytime. But you have to question a guy who just told you why not to invest in Belize and I’m investing.
0 Reply
Travis Steinemann
Specialist · Mendoza, Argentina · Member since 2018 · 120 posts · 111 votes
4y
@Henry Clark well that post was in the heart of COVID and you said only invest if you have cash and want to live there yourself, which I do (at least part of the year), so I am interested in learning more about it. The property looks lovely by the way.
0 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
4y
Anything for a fellow Tiger.
First you need to narrow down what you're looking for and your price range. Also, what your financial and personal objectives are. Belize is real small, but it is very diverse in Real Estate Options and life styles.
Example 1: Great beach house facing the ocean, near town. San Pedro/Ambergris Caye- $1,000,000; Same house 3 miles out $800,000. Difference is lot price. Placencia- Same house $200 to $300k lower; Corozal- still lower but I have not researched; There are other towns and locations, but you need to lock in and research what you are looking for. Watch all of the Will Mitchell youtube videos. Anything under $850,000 on the ocean side is a dump and fixer upper in San Pedro.
Example 2: Beach house facing the ocean. Deals, look for any old uncompleted structure.
Example 3: Inland, Cayo District. This is for the rivers, Maya ruins, less touristy, country living. Look for property that you can still buy there, but you can't buy in the US unless for a fortune. For example, we look for location, water, View. Build a spot. Your making future money on the location, possible future subdivision and current money on the rental. Keep in mind Belize is one of the cheaper spots for land, definitely in the Caribbean side and definitely compared to other Central America countries. Also it is a very young population, thus real estate prices have to increase as they mature. They are not your market, but they will start to build on prime real estate, reducing its availability.
Example 4: Go to the town and drive around and look for any unfinished concrete structure. Buy it cheap and finish it.
Example 5: European Hostel setup. Educate yourself on European hostels, pricing and expectations, setups. A lot of the younger European group come to Belize and live real cheap on hotels or housing. These folks come throughout the year, even non holidays. But they are looking for cheap. I would go with cheap Male/Female or any sex large rooms, with a joint bathroom and kitchen area. To make money I would do an evening meal and two beers for $15 USD. Offer cloths washing service. Find an old worthless warehouse off the main area and retrofit. Don't thing in terms of the US and your expectations.
Example 6: Tiny houses- google Belmopan Tiny House Belize. I loved staying at these until we found a closer more permanent spot.
Example 7: Yacht living/rental. Move back and forth between San Pedro, Placencia, the reef islands, etc. Think of financial risk management on this option as safer. Develop a model. Check out slip fees if needed.
Example 8: Buy a few acres and put up several Mennonite homes and go off grid to reduce costs.
Example 9: Who knows. Become predictable. Pick the same hotel, the same breakfast spot, the same car rental, the same xxxxxx. At each place tell them you are looking to buy land, a house, fixer upper, etc. All Belizeans are Real Estate sales people. Everyone. Deals will start to come to you. Go with the flow and see if it works. Always take the property through an attorney or realtor though. Land ownership can be shaky.
Key issues as noted in earlier post:
1. Caretaker, is a must unless you do Gated condos.
2. Rental model- Daily, STR, Weekly/Monthly/Six months.
3. How do you finance or sell coming back.
4. Properties- look for ones that have been on the market for a while. Cancer, divorce, not the dream, need funds back in the US/Canada/UK, etc. Offer half their asking price. Realize it will be you when you sale, thus you have to make your money going in.
5. Check the too simple things. Sewer, Water, Electric capacity of the area.
Our model is three fold. A. Enjoy the life. We have about 15 years down there., B. Buy intrinsic value. River/Stream, Ocean, view, location, future subdivision., C. Teak- our market is India, China, Malaysia and not Belize.
Read my post in the Commercial section, of building our place in Belize
3 Reply
Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
4y
Forgot the most important part. Develop TRUST with someone down there. Even when they screw up, it's your fault, because you didn't do what I am about to tell you. "Show them. Don't Tell them".
They think in Belizean, save money, cheaper, Third world/Villager terms, do with what you have, not what you want.
1. Wiring- "TOLD" them to use heavy duty wire. Had to replace the underground wire because the First of Three Electricians thought in Belizean terms and not electric use for a US citizen. Had to replace the wire which should not have been a big deal. Disconnect and pull out. Problem is they "Saved" money and used as small as possible of a tube as possible. Had to dig everything up. He saved me $100 in tube, but cost me Months and about another $1,000.
2. Tile- he didn't have the proper Tile spacers and lifts for large tile. He went ahead and installed to keep moving. Looked great for a Belizean. But too many lifted edges for us. Had to tear out the whole 2nd floor of tile. He tried to save us a month, since there were none of these spacers in Belize, he used what he had, I brought some down the next trip. Ended up costing another month to tear out and re-tile.
2 Reply
Travis Steinemann
Specialist · Mendoza, Argentina · Member since 2018 · 120 posts · 111 votes
4y
@Henry Clark I don't know why your posts make me excited instead of nervous, but they do. I really appreciate all the insight. Looks like I'm going to need to go down there for a month or so to drill down and make connections. I really appreciate your time.
1 Reply
Rodney Sums
Laveen, AZ · Member since 2016 · 584 posts · 528 votes
4y
Quote from @Henry Clark:

@Jeff Ashachik
Not to dash a dream, but I would stay away from Belize, unless you have straight up cash in hand.
No US bank is going to loan in Belize. You will need to collateralize with a US located asset, if you work with a US bank.
Covid.  This is the perfect time to buy in Belize since the Airbnb business is being hammered. About 2/3 of the homes in Placencia on the coast are for sale. A lot of UK and Canadian owners can't go there. Plus low level of tourist. Do you have the Cash to ride this out and take any future Covid hits?
Where are you wanting to invest? If San Pedro on Ambergris Caye, I would really study the infrastructure (water/sewer).
Groundskeeper or Gated Condo. The first consideration of any property, anywhere in Belize is security for the property. You either must have a live on site groundskeeper, or be in a Patrolled Gated Community.
Real Estate Market.
a.  There is no market in Belize for Real Estate. Do not plan on making money buying and selling. Realize you are talking rental/vacation. Belizeans don't have this kind of money. A normal person makes maybe $40 Belize a day, which is USD $20. So your market is another foreign investor. Not that many people out there like that.
b.  Vacation- lets say you have $250,000 for the condo. At say 5% interest on $250,000 whether you are paying interest on a loan, or could have invested elsewhere, that is $12,500 per year. For $5,000 per week, I can rent the "best" bnb house on the ocean side. If I don't like that house or Belize, I can take my $12,500 somewhere else. Change the figures as you see fit. Point is, I wouldn't buy a Condo for a vacation spot in Belize. Even if BNB.
c. BNB- very little property tax in Belize. Example on $1,000,000 property you might pay $200 per year. Very little other cost other than the unit itself. What is your breakeven in rental days? Can you sustain no rent for a year depending on Covid. To me at this time unless you have the cash to float, this is gambling.
d. You still want to buy. Then. Remember CASH is KING in Belize. You have to be more ruthless than ever in your life. If they say $250k, you say $150k. If they say Seller finance, you say interest only for 2 years while riding out Covid. If they say 25% down, you say 15% down. If they say 5 year balloon payment, you say 10 year. Remember their money is tied up and Covid has nailed them. Your helping them out. They don't bite, go to the next Condo developer. I would be looking for a Condo that has already been sold and the owner is selling. Normally all the furniture, golf cart, bicycles, boats, etc go with the property. Its not worth hauling back to the US/Canada/UK. If you buy new imported furniture expect to pay 75% or more import tax.
e. Buy what you can adjust, not what you want. With the above approach, your not going to buy your perfect situation, your looking for a deal. Buy what you can adjust later. You hate the bathroom you can adjust. You have to have a top floor, you cant adjust later, buy it.
f. Realtors. Working with a realtor tell them what your looking for. Then tell them you want to look at their oldest listings first and in that order. For "d" above to work, the owner has to have had there property on the market for 2 years or more. They have to come to the realization, there is no market in Belize, and they will have to reduce their price. Don't work with a NEW seller. They haven't come to the realization, they have to take a shave. You need to realize that already on the backend.
Remember the first consideration is a "Groundskeeper", otherwise your house will get stolen. The first thing we did was to build a Groundskeeper's house, not in the picture. This property which is 50 acres was on the market for 15 years. They reduced the price by about half, then a year later, we offered about half of that. The last thing we want is a 3 story house, but we adapted. Entire third floor will be a Veranda. Front of 1st and 2nd floors will be porches.
Belize is great. Lobster season. Lobster ceviche, cakes, quesadilla and tacos.

That was almost a book that you could sell on Amazon. No sarcasm
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