I forgot to mention an important point. Since short-term rentals in the US could become over regulated or downright illegal (where they aren't already), the resulting cash flow and profitability could drop hugely if not becoming downright negative in case of a conversation to long-term rental. That won't happen in Mexico.
Rental Property Investor · Oakland, CA · Member since 2021 · 7 posts · 4 votes
5y
Hi Zach, I'm in the middle of closing on a SFH for STR in Baja California Sur. The experience has been great: very smooth and straightforward with no surprises. Closing costs are maybe 1-2ppts higher than in the States.
I've been investing in STRs in Mexico for a few years now and have responded to hundreds of posts on the topic. You can browse through them through my profile to see if you find anything you're looking for there. I know it's not easy to search that way so feel free to reach out to me directly if you don't easily find what you're looking for. Or, alternatively, you might want to ask specific questions if you have any.
You're right it's not for everyone but thankfully so, as I don't have to pay hundreds of thousands of dollars over the asking price when I buy a property in Mexico and hopefully it stays that way. And yes, the returns can be way higher than in the US if you know what you're doing.
I forgot to mention an important point. Since short-term rentals in the US could become over regulated or downright illegal (where they aren't already), the resulting cash flow and profitability could drop hugely if not becoming downright negative in case of a conversation to long-term rental. That won't happen in Mexico.
Investor · Carmel by the Sea, CA · Member since 2021 · 2 posts · 0 votes
5y
Hi @Scott Strand thank you for your response. How did you finance it (would you be willing to share the numbers on the deal)? Through a Mexican bank?
Also how did you go about finding trustworthy realtors, property management, and resources?
@Mike Lambert thank you for your input, I have already started going through your posts on the subject. We are also looking at the Puerto Vallarta market. In the 5 de Deciembre neighborhood and open to the surrounding areas. If you have any specific thoughts on that market or already have recommendations I'd love to hear them. I work full time so still sifting through posts so sorry if you have already talked about that area somewhere else.
You're welcome and no worries. Totally understand that it isn't easy to invest overseas on your own when you have a full time job. I've been there! So, hopefully, we're helping a little on here.
Generally speaking, 5 de Diciembre and surrounding areas is an up-and-coming area but, of course, up-and-coming areas can remain that way for years. Whether it is right for you will depend on your objectives, what kind of property you're looking for and how much money you have available to invest. Like in the US, it isn't one size fits all in Mexico.
Rental Property Investor · Oakland, CA · Member since 2021 · 7 posts · 4 votes
5y
@Zach VanHarn happy to help! The home loan market in Mexico isn't quite as deep as it is in the US. There are a few lenders that will finance, but as I understand the loans have higher interest rates, shorter terms, and lower LTV requirements than in the US. Most of the prospective buyers I meet are paying cash.
I self-financed the deal by pulling cash out of a US property through a refi, 3.5% 30year conforming. Feel free to DM if you're looking for specifics on purchase price, expected cash flow, etc.
Re: realtors, PMs, resources, I spent significant time in the area I was looking to buy (no great sacrifice on my part!) and spoke with a lot of people. I interviewed five realtors and six PMs, and solicited a ton of recommendations from friends of friends in BCS. The process wasn't particularly different from what I would do if I were investing remote in the US. The one difference I found is that good quality contractors are much easier to find and build a relationship with than they are in our home state. Availability is getting a bit tight as the market's been heating up, but it's still nothing like the total shortage we're seeing here.