All Forum Posts by: Mike Lambert

@Sebastian Papworth Trovit, that's the site I wanted to mention but forgot the name. And, yes, Inmuebles24 too. I didn't mention it as I believe it's the same company as Vivanuncios. Not sure if you're aware but, nowadays, Google Translate translates any web page so there shouldn't be any language issue on these sites for non-Spanish speakers.

@Christian Romano what you're looking for doesn't exist because there's no unique way for the developers to advertise their projects (or not). So it's not easy for anyone to do and then it's even more difficult to separate the wheat from the chaff. But, it is easy finding a great deal in the US these days?

Aside from Google searches and Facebook groups, you have the website of developers, the website of real estate agents and master brokers, Mexican sites like Vivanuncios and another one I can't remember the name of, Point2Homes (beware that many if not most of the listings in that one are old, fake or even possibly scams - buyer beware in this one: if it looks too god to be true, it probably is).

Bear in mind two other points:

1. Some agents or brokers are exclusive sales agents of some developments so you might never know about them unless you know the right people.

2. Typically, Mexican developers have a "friends and family" round before going to the market. These are the best deals and, if they sell everything at that time and you're not "in", you'll never get the opportunity to buy into the project, even at retail price later on. Speaking of which, for example, as I mentioned to you on the phone, I deal exclusively with "friends and family" so you'd never know what I've got unless you know and/or contact me. You bet others are doing that too.

Hey @Christian Romano you're welcome. The standard reply is it depends on your objective and the level of risk you want to take. Also, the best locations for pre-construction are no different than the best location for resales.

So like everywhere else, the best locations are those that have the best supply/demand parameters. When it comes to demand, you want mass tourism and the three main tourist destinations in Mexico are the Riviera Maya, BajaSur and the Puerto Vallarta / Riviera Nayarit areas. You could bet on less established destinations but it's much more speculative. When it comes to supply, you want to avoid oversupply, as it's the best one-way ticket to losing (a lot of) money.

I'd avoid Tulum with a 10-foot pole as it's already hugely overbuilt and it's going to get much worse in the coming years. For that reason, I didn't go ahead with the development I mentioned in my initial post in this thread and I'm so happy and relieved I did. Generally, you need to be careful with the Riviera Maya, as that risk is higher there, not to mention the sargassum risk.

You're welcome @Vidyadhar R.. To best answer you and to make sure I don't mislead you, let me give you some context before replying to your specific question.

I've never applied for a mortgage in Mexico. I've never needed to, as I've invested with investors and also we've benefited from seller financing. I therefore haven't dealt with the lenders' department that deal with personal mortgages and so there's nobody I can recommend you personally.

I get my information on the topic through my relationships with the commercial lending departments of the banks (I used to lend to them when I was a banker). As I now invest into developments, I regularly talk to these bankers to make sure that our condo buyers will be able get a mortgage if needed and to make sure that their risk when buying will be as low as possible. The idea is that if a conservative bank will grant a mortgage, it's a seal of approval for the project. If it's too risky for them, I don't want to have a situation in which the buyers', investors' and my money are at (too much) risk.

I was recently taking to them about a market in another part of Mexico that's performing very well but has a pocket of overbuilding in a specific area. Therefore, I wasn't that surprised when a bank told me that they won't lend there. To be clear, I haven't asked them about Tulum, simply because I've moved on from investing in that area. However, what's happening in Tulum is the same as what's happening in that area where the bank won't lend but on a much grander scale. Therefore, I suspect that lenders might have even more of an issue lending in Tulum as well, aside from the title insurance issue. That's what logic says to me but that might not be the case. Indeed, logic doesn't always dictate behavior, especially when there's an opportunity for the banks to make a lot of money. We've seen that movie before in the US, haven't we?

Generally speaking, it's not that easy for everyone to qualify for a mortgage in Mexico and, given the potential additional constraints related to Tulum, your best bet is to check with all the banks. It's not like in the US, there is just a handful of them.

Hope this helps.

Hey Brandon, Mexico can a great place buy a 50k down payment limits what you can do if you want to stick to the best areas.

@Vidyadhar R.

LTV min 50%. Minimum amount will be high with some lenders because you can't get title insurance in Tulum and that whole area. Also, some banks don't want to lend in areas where there is evident overbuilding and that is probably the worst offender whatever the LTV. They generally hate risk (although that's what they're supposedly being paid for). So, most buyers in Tulum pay cash. Good luck!

Hi Edward,

It really depends on your risk appetite. Buying pre-construction properties in Latin America to flip within a short period of time is a risky strategy in general but even more so today given the rise in prices over the last few years.

Medellin is a great place to invest provided you buy the right kind of property but not because it's still undervalued according to international standards. That kind of analysis just look at prices without taking into account the buying power of the local buyers, which makes it completely flawed.

Short-term rentals haven't been banned per se. What you're referring to is the fact that 70% of the owners have to agree to it in a condo building. While it's not a ban, it'll apply to pre-construction projects.

Welcome the BP Mher. For your info, I’ve answered hundreds of posts about Mexico that you can find through my profile. I know that it’s not easy to search so feel free to contact me directly if I can help. Beware that things are different from country to country and therefore a lot of the education won’t apply there.

International hard money lending makes no sense unfortunately. Hard money lending is based on taking a mortgage on an asset and no lender is ever going to take a mortgage on a property overseas as he/she doesn’t have the infrastructure to take the property back if push comes to shove. Even banks won’t attempt to do it.

@Gene Jung

If you want to protect against dollar devaluation, you might want to look outside of the US. If your job and retirement account are already in the US and all your real estate is there too, you're gonna be completely dependent on the dollar and what's happening in the US. At that's the approach I took with respect to my home country of Canada when I started to invest internationally. Some food for thought for you.