All Forum Posts by: Mike Lambert

You can list the property in as many sites as you want, Airbnb being one of the main ones. There are companies that take care of everything. There are techniques to get high occupancy rates. A friend of mine gets above 90% for all his properties. The thing is, in the Riviera Maya, the hotel occupancy rate is above 80% and above 90% for the luxury hotel so you can do well even if you're a lousy operator. Developer financing isn't very common but basically, on delivery, the developer will give me 5 years to pay the 50% of the price that is still due at an interest rate of 6%. Given the strong expected cash flows, I expect to be cash flow positive and will be able to hold the property free and clear after the 5 years!

I invest in pre-construction condos on the Riviera Maya because I'm connected to the developers and I can invest at large discounts below the project launch price and I get financing from the developer. I don't invest in these turnkey opportunities though, as I think that an 8% to 10% ROI is a lousy return for Mexico. The developer makes most of the money. I prefer to rent by myself and I intend to make much higher returns than that.

Agreed with @Chris Ferreira. Education is not that expensive and doing a wrong move can be much costlier.

Your house hacking strategy sounds good but, even in the best case, it might take you long before repaying your mortgage so I'd learn first.

Hi Sam, it's great that you have decided to start investing in real estate. Just be aware that plexes in Montreal are very expensive so it might take you a long time before you get your equity back, unless you find a fantastic deal. Why do you want to put a deposit that high? You could put less (and buy more) and achieve your goal quicker. Alternatively, you could buy an apartment building with a lower deposit and reach your goal even quicker. What you would do also depends whether you are investing actively or passively. Feel free to reach out!

@Chris Potter You're right on with your comments on the developer. The connection with the developers date years back and only the best developers were considered before initiating the relationships. Moreover, given the amount of business they do with my associates, they cannot afford to mess up with us.

Regarding the property management, the answer is simple: self management. Managing short-term rentals at a distance has become very easy. And i have friends who live in the Riviera Maya, of which one is in the property management business, so I'm covered if I need help. $22,000 in HOA fees over 11 years is not much money, especially considering the very high potential rental income.

I have a friend who is an expert (international) real estate investor. He spends in excess of half a million dollars a year traveling the world to identify the best markets, local professionals and opportunities. The Riviera Maya is his favorite market within the Americas.

I used to be an international banker and I did some business in Mexico but was never based there. Since I'm investing in Spanish- and Portuguese-speaking markets, I'm learning Spanish as my fifth language. :-)

@Chris Potter Through relationships with selected Mexican developers, I access to purchase pre-construction condos or villas at big discounts to their market value and launch price before the official launch (and get to choose among the best properties). For example, the last one was in Tulum (Mexico) where I was offered penthouses for $220,000! Normally the bulk of the appreciation takes place during construction but, in this case, the project officially launched to the retail market at the beginning of the year and these penthouses sold out at $ 369,000, which represents a capital appreciation of 68% in around 3 months before the construction has even started. Moreover, there is leverage since the payment of the first half of the price is spread over the construction period. So, between the private pre-launch I got access to and the launch, the investment was the 20% downpayment ($44,000) + 3 monthly payments of $485 each or $45,455 in total. Therefore, the capital gain of $149,000 represented a more than 225% in around 3 months for those who sold at the launch! I prefer to hold for high rental income and further capital appreciation, especially since the developer typically offers me 5-year financing at only 6% for the remaining 50% normally due at delivery. The debt service will be paid by the renters and therefore I hold the property completely free and clear after 5 years and enjoy very large rental returns. I recently did a deal like this 50/50 with an investor friend of mine in Playa del Carmen. I didn't put any money down as my part will be financed by the developer He's putting down the money but that represents less than half of the total price and so he makes better returns this way than if he was buying the property by himself.

I am currently negotiating the purchase of an off-market recently built condo building in a prime location in the Riviera Maya for at a half to a third off the price per sq. ft. of new construction ion the neighbourhood and the gross unleveraged return could easily exceed 20% and even lean towards 40%! I would get leverage through 100% seller financing. I could do the deal alone If a small down payment is agreed. Otherwise I will look for investors.

All desirable property in Mexico will be sold in USD but as I've just shown you can still make loads of money, even though it's not easy (you have to have the right connections and ideas). The only way to make even more money by taking advantage of the low peso is to team up with developers. I have friends who are local developers. They would love if I could bring them some capital but most investors will consider that as too risky!

@Chris Potter I invest in the Riviera Maya. The market is booming indeed but the issue is the lack of leverage. I only invest there if I can get financing at a decent rate that works.

@Mazen Al Ashkar In Portugal yes at much better conditions than here. Mexico is normally difficult but I get financing through my connections. It really depends on the country.

Agreed with @Chris Ferreira. The market in Montreal and Canada in general has become very expensive so you need to find or create deals to make it work and this is what I'm looking at doing.

For really profitable deals, I invest in markets which are much cheaper and have much more room to run, like Portugal and Mexico.

Agustin, I'm just about to start in Montreal and will concentrate on multifamily (6 units and above) so I'm not sure about houses and rents. As for the rent control issue, I just make sure I cash flow under the current rents so it's not that much of an issue. I'm interested in having a look at Ottawa as well it's not that far!