@Brunnhilde Wijnaar @Kevin Smith @Patrick Sullivan
I have been investing in pre-construction condos in the Riviera Maya since 2017, targeting Playa del Carmen. I'm connected with the best developer in the region and I by directly from him, along with investors. I buy in exclusive pre-sales before the launch at a huge discount and I get financing from the developer, which multiply our returns severalfold. A much as I'd love to recommend them here, I cannot because these pre-sales are unadvertised and the developer want to keep them under wraps so I can only disclose them to the people who decide to invest with me.
However, I can opine on other developers if I know anything about them. Patrick, I don't know anything about R4. Kevin, I don't know if you signed up with Anah already. I wouldn't touch them with a 10-foot pole. My develop told me they are in (financial?) trouble. Some people in my network used to deal with them. Not anymore. Some are stuck in a project. In fact, they have a project on upper 5th Avenue in Playa del Carmen. I passed along when I was there in December and the property was fenced. Nothing was happening and it looked like the construction was interrupted.
This underscores my policy of not giving any money to a developer in Mexico unless I know them personally or somebody I trust knows them. You guys need to do your due diligence.
If you have been to Playa to Tulum, you undoubtedly have seen huge billboards from GMB advertising various projects and supposedly guaranteeing the buyer a return between 8 and 13%. Two things here. Firstly, why would you take the risks of investing in Mexico for an 8% return or even 13% when you can get that or better in the US with much less risk and more control. Secondly, think about what this means. If the revenue from your own unit or the pool isn't enough to pay you 8%, somebody (them or the developer) will have to pay the shortfall. If it's them they guaranteed a huge number of project. So if there is a worldwide or local downturn in tourism, they'll have to pay huge sums of money to the buyers, which they might not have. GMB is a broker, not a developer, so it is likely they wouldn't have the money and their company doesn't own property or most likely doesn't have the assets to liquidate to pay you. If somebody was offering me a guarantee, I would and should ask for their balance sheet to see if they're good for it. And even if it's the developer who issues the guarantee, many of them wouldn't have the money to honour it either. Thankfully my developer is one of the richest family in the area so I don't have the problem but they don't (need to) give me a guarantee anyway. Generally speaking, if somebody other than a bank or an insurance company issues you a financial guarantee, you should ask for their balance sheet to check if it's likely they'll be able to honor the guarantee. Ask GMB or the developer to show you their balance sheet and look at their face. Finally on this guarantee topic, let's assume that whoever issues the guarantee has enough money to pay you. It doesn't mean they're going to. Try to win against a Mexican company in a Mexican court. Good luck!
Finally, there is one kind of project I would avoid like the pest and I suspect that those offering a supposedly guaranteed return fall into that for obvious reasons. If you buy in certain projects, the developer will force to rent through his rental pool and will give you some limited personal usage. This mind sound great at first glance. You have nothing to do and you have less risk because you get paid based on the occupancy of the whole complex, not just your unit. I think this is a very bad deal. First of all, it's horrendously expensive. No matter how much your unit rents, they will take first dibs, generally 40% of the gross income. In other words, you're the one investing the money and taking the risks and they make most of the money without investing a cent and taking any risk. Secondly, you don't have any freedom. You cannot use your unit as you please (for own occupancy or renting) and, worse, you cannot fire them as property manager even if their performance is bad. Think about this!
Hopefully I didn't sound too negative or discouraging. I love the Riviera Maya and Tulum and I love to invest there. It can be a winner for you but you need to know what you're doing! It's important you know and understand all that I mentioned. Nobody's gonna mentioned that to you there and certainly not the brokers who have a vested interest in selling to you and regardless don't have the background to understand some of the things I explained.
Hope this helps everyone and I'm happy to help more if I can.