Building my first BRRRR in Guadalajara, Mexico

BRRRR - Buy, Rehab, Rent, Refinance, Repeat
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Building my first BRRRR in Guadalajara, Mexico

Jorge Castro
New to Real Estate 路 Guadalajara, Mexico 路 Member since 2021 路 14 posts 路 4 votes

Hi,

I am excited because finally I pulled the trigger and bought my first property. I sold a house I was renting and with that money, I could buy this "new" house and have some money left for the rehab.

My main objective for sharing this project is to understand what investors care about before, during and after an investment is done, so I am willing to answer all your questions and share with you all, the information related to the project. At the end of the process I would like to end up with a good understanding of the questions that need to be answered to potential foreign investors. Maybe my future projects could be appealing to more than one member in these forums.


The name of this project will be URDANETA LOFTS. 

It is a house of approx. 1,700 sft of construction, over a land of 700 sft (21ft x 33ft)

The house has 3 floors

Purchase price $102,500 USD

It is well located, it is on a main street of Guadalajara City. We have three metro lines, the house is just in front of line 1 of the metro, 600 feet away of URDANETA station. Two big hospitals are in the surroundings and the industry zone, no more than 5 blocks away.

The idea is to rehab the property and fit at least 9 175 sft studios (each studio will have a bathroom, small kitchen and bed)

I am trying to reach young professionals or doctors, looking for a place to stay, the rent I am trying to get is a minimum of $250 USD per studio per room

The rehab will be done in 2 stages

First stage should cost no more than $25,000 USD and this rehab is needed in order to be able to get a mortgage credit. At this moment this house does not qualify for morgage criteria of the Mexican banks, mainly because there is open space missing needed to reach a ventilation. 

With this rehab, the expected valuation of the property is $150,000 USD

The second stage of the rehab should cost around $35,000 USD for 9 studios +  $1,200 USD per studio in furniture.

URDANETA LOFTS as it is before rehab

Here is a link of a video of the property

Let me know your thoughts, what would be interesting to know about this property? what do you think about the deal? is it a good deal?

Thanks in advance for your comments!

Jorge Castro

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Andres Calderon
Investor 路 Miami, FL 路 Member since 2014 路 50 posts 路 36 votes
4y

Congrats on your project and new home ! It looks very interesting update us as you go along with it. As far as attracting foreign investors to places like Guadalajara, Mexico I'll be honest and say that's a tough one. I Have built some apartment buildings in Colombia but in all honesty that is not something I even mention in the states for the culture, society and system is so different it is hard to understand. Attracting "investors" to third world countries is quite the task there are many factors that come into play such as do they even know anyone down there for references? Are you the only contact? Is the money safe down there? Most "Investors " don't ever go out of their zip code now imagine a whole new country. I see your project more desirable to those who actually want a change of lifestyle. Those who are done with their every day routine and have some savings and give it a go at a bed and breakfast type of story, that's a big market you can tap into.

Best of luck !

Regards,

Andres Calderon

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  • Andres Calderon
    Investor 路 Miami, FL 路 Member since 2014 路 50 posts 路 36 votes
    4y

    Congrats on your project and new home ! It looks very interesting update us as you go along with it. As far as attracting foreign investors to places like Guadalajara, Mexico I'll be honest and say that's a tough one. I Have built some apartment buildings in Colombia but in all honesty that is not something I even mention in the states for the culture, society and system is so different it is hard to understand. Attracting "investors" to third world countries is quite the task there are many factors that come into play such as do they even know anyone down there for references? Are you the only contact? Is the money safe down there? Most "Investors " don't ever go out of their zip code now imagine a whole new country. I see your project more desirable to those who actually want a change of lifestyle. Those who are done with their every day routine and have some savings and give it a go at a bed and breakfast type of story, that's a big market you can tap into.

    Best of luck !

    Regards,

    Andres Calderon

    1Reply
  • Jorge Castro
    OP
    New to Real Estate 路 Guadalajara, Mexico 路 Member since 2021 路 14 posts 路 4 votes
    4y

    Thanks, @Andres Calderon!

    I understand what you say, the risk perception to invest in a developing country like Mexico is higher for investors that know this activity in a higher regulated and organized market like the US. My goal is to share as detailed as possible the process of my investment, to share my experience and who knows, maybe there will be investors interested in trying something new. Or at least I would love to get feedback on how I present the information, so that investors with more experience than me, can have a clear picture of what I am doing and give some advice on how to improve my performance... I am a believer that exposing ideas to a different point of view enriches any endeavor, and you never know, by doing so, what will happen, and that is why I like this forum and why I like to share this project...

    So keep in touch, so you can see how it evolves, I have a feeling it is going to have a happy ending馃槑

    0Reply
  • Sean Jordan
    New to Real Estate 路 Cancun 路 Member since 2024 路 1 post 路 0 votes
    2y

    Hi @Jorge Castro,

    I'm really interested to hear about how your project went - and how it's going.

    I live in Cancun and I really want to start BRRRR-ing, I can see from my initial investigations that there are some definite differences in Mexico to the way things are done in the US - especially with re-financing.

    Any tips or advice you can share?

    Many thanks,


    Sean Jordan

    0Reply
  • Jake BakerBusiness Member
    Flipper/Rehabber 路 San Diego, CA 路 Member since 2020 路 1k+ posts 路 694 votes
    2y

    @Jorge Castro

    Congrats on starting your first BRRRR. As long as you are profitable on your first deal, that is a win.

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