Cabo Mexico Property

General Real Estate Investing
1

Hi all,

I have been reading posts here for over a year now and have never posted anything, but I need a little insight.

My father bought some land in Cabo Mexico, he said it’s beautiful with only 100 meters to the beach. I was wondering if it is safe to own property in Mexico now or what. He wants me to invest and says “It’s the best deal ever!” In Mexico? I am sure it is beautiful and all, but I didn’t think that you could “own” property in Mexico, and if you can is it smart to do so? The return is supposed to be good on the investment, so I guess if anyone could tell me if this is safe to do that would be great. I don’t want to end up giving my hard earned money to the Mexican Government and have nothing to show for it. ???

Thanks.

2

If Sammy Hagar can do it, so can you! That probably didn’t help, I was just trying to be funny.

The Red Rocker

3

i was just in playa del carmen, and from my understanding, no non-mexican can own beach front property…i could certainly have misunderstood, but this was my understanding.

4

Only Mexican citizens can purchase property in Mexico. Non citizens can get a lease but sometimes you get screwed by the Mexican gov’t. Somewhere in Southern Mexico a community of Americans lost their homes because the contract was not correct. They lost everything. Forget Mexico as a foreigner you have NO RIGHTS.[b][/b]

5

Yes,

It is my understanding (and it is limited) that, as a foreigner, you can only lease property in mexico. It is structured as a 20 years land lease. You can improve it as you see fit (ie build a home on it) but in 20 yrs you don’t own it any more.

If you want to go to the beach in mexico, (I can’t believe I’m saying this) you would be better buying an American time share property (which is actually deeded to you) and exchanging for a visit to Mexico or you could simply rent a hotel room. Just a thought.

6

Is it safe to own property in Mexico, or what?

Answer: or what.

I would not own property in Mexico:

We have all heard about the Immigration debate going on in this country.

Harsh, you say? Read this…

  1. If you migrate to this county, you must speak the native language.

  2. You have to be a professional or an investor. No unskilled workers allowed.

  3. There will be no special bilingual programs in the schools, no special ballots for elections, all government business will be conducted in our language

  4. Foreigners will NOT have the right to vote no matter how long they are here.

  5. Foreigners will NEVER be able to hold political office.

  6. Foreigners will not be a burden to the taxpayers. No welfare, no food stamps, no health care, or other government assistance programs.

  7. Foreigners can invest in this country, but it must be an amount equal to 40,000 times the daily minimum wage.

  8. If foreigners do come and want to buy land that will be okay, BUT options will be restricted. You are not allowed waterfront property. That is reserved for citizens naturally born into this country.

  9. Foreigners may not protest; no demonstrations, no waving a foreign flag, no political organizing, no bad-mouthing our president or his policies, if you do you will be sent home.

  10. If you do come to this country illegally, you will be hunted down and sent straight to jail.

Harsh, you say? The above laws happen to be the immigration laws of Mexico

7

With a few execptions - I wish they were the laws here.

Sorry, this is not a political forum, but had to put my ignorant American opion in

Back on topic - if you want something exotic, try Costa Rica - I can say from experience that it is more beautiful than Mexico, the government is more stable and forward thinking, and something on the order of 50,000 Americans live there now. Great County.

8

For a variety of reasons, I’m actually a strong proponent of legal immigration to the United States. I think the current numbers aren’t realistic given the economic disparity between our two countries.

Nevertheless, without getting any more political than that-- as it relates to this discussion, investors should take note of the direction of the flow of both people and capital and should be asking themselves important questions about why it is the way it is. Mexico is not a strong attractor of capital for investment for some very important reasons. DO you know what they are? Do you still want to invest there?

9

Isn’t it kind of funny how Mexican citizens or any other Citizens can buy what ever they want here if they have the money?

Isn’t it also kind of funny how when I was a mortgage broker if I had someone with a Green Card it was easier for me to get them a loan then a American Citizen with poor credit?

Isn’t it also kind of funny how many grants foreigners can get after they are here that we as American citizens can’t get?

You are right it is not funny at all! As a matter in fact where else does this happen only right here in the good old U.S.A.

10

There are some definite issues that need to be addressed. I don’t think the USA wants to win the “Who’s the bigger a*hole contest” with Mexico, though. I think we’re better than that-- which is at least part of the reason there’s no line to get out like there is leaving Mexico. I think if we emmulate their policies, you could count on a lot of the same crap that happens there, happening here.

When I imagine a world where US companies are not bloodied daily by immigration and competition from over seas, I image being held hostage by huge, lumbering US corporations like GM in collusion with the government. It’s not a pretty picture.

11

Does it scare you then that after WW2 the Ambassador of Japan said "We will never beat you physically so we will have to do it financially”? Now what is going on we now lose over 11 billion per State per year in the quote on quote FAIR TRADE AGREEMENT. Not so fair huh! We send them cotton and metal they send us cars, motorcycles, electronics, clothes you name it they send it!

Does it scare you that American companies outsourced over 4 million jobs in the past 6 years to foreign countries? And they estimate another 3.4 million over the next 4 years?

Does it bother you that our President is letting a foreign country control our ports?

Me personally I think it is time we get someone in office to bring it home (Remember that was Wal-Marts slogan for a long time now 92% of there goods are made elsewhere)
It is time to shove there foreign junk back on a ship and give it to them. It is time to stand up and say no more. In this time where the unemployment rate is the highest it has been in a long time it is time to demand our jobs back and to look at only American goods. Try this for fun on your next vacation go to Mexico and Demand FREE health insurance for you and your family while there also demand that all the forms to apply are in English speed through there country when you get pulled over demand an English speaking officer. Fly the American flag from your car and hotel window. Tell them you need to stay longer and need free housing for a couple years and food stamps to feed you and your kids.

It would not happen they would not let it happen NO WAY NO HOW!!

I totally agree we do not want to win the biggest A$$ competition. On the other hand it looks to me like we are winning the biggest push over competition hands down. Like Charlie Daniels said “I have nothing against foreigners coming to America but when the first thing they do when they set foot on our soil is break the law that is where I have a problem” face it everyone of us has the same thing in common all of our ancestors came from somewhere else right?

You are also right when you said “When I imagine a world where US companies are not bloodied daily by immigration and competition from over seas, I image being held hostage by huge, lumbering US corporations like GM in collusion with the government. It’s not a pretty picture.”

On the other hand it is a worse picture to imagine my great grandkids homeless because we let it all happen! And hopefully they will come from old money. So that means I have to make as much as I can as fast as I can to support my future. Honestly if things do not shape up here really soon it is not going to be a pretty picture at all.

What does this have to do with Real Estate?

PEOPLE THAT DO NOT HAVE JOB’S DO NOT BUY HOUSES

What does that do to the housing prices?

That is it someone needs to change it why not me?

I am putting up a new site www.robbforpresident.com give it a week or so what do you think?

I also really do not think it is right to become tenants in our own country!

12
Does it scare you that American companies outsourced over 4 million jobs in the past 6 years to foreign countries? And they estimate another 3.4 million over the next 4 years?

Nope. Americans work too little and demand too much in return. We’re soft. What worries me is that a “job” now means a mere 40 hours a week, a large salary, benefits, unemployment insurance, and a whole lot of other goodies and that as a result we’ve gone from a nation where 90% were entrepreneurs to one where 90% now work (using the term loosely) for others.

Labor is a commodity. As a business owner, I like to pay less-- just like consumers of anything else, I’m a consumer of labor. I’m not looking for high prices. The resulting low prices keep the cost of everything in check.

I grew up in a town that has implemented the local version of protectionist trade policies. Very few, if any franchises have been permitted. It’s all in the name of protecting the local mom and pop shops. It’s all very romantic-- and empty. People live there-- the population has grown. But nobody shops there-- they all leave for neighboring suburbs that have enjoyed tremendous growth, revenue, and property value increases.

We don’t need politicians to tell us where to shop or who we can buy from. I’m an unabashed free trader for two very important reasons: First, it’s inevitable. Second, it’s VERY good for our country.

The ports deal doesn’t worry me either. What worries me as a business owner is that some politician will decide whether or not I can sell my business, because after all-- if you can’t sell it, do you really own it?

13

All of your infomation is greatly appreciated, but if Stewart Title is providing title insurance and Bank of America is there providing financing, then could it be true that because of NAFTA and other trade agreements that started a few years ago that this is now safe? There are supposed to be tons of foreign investors to include Marriot and an REI group from Las Vegas who seems to be buying parcels and selling them to other REI groups accross the United States. I don’t know, I am pretty new at even buying out of my own state let alone out of the country.

Thank you,
Ryan

14

Unless you have a GREAT real estate attorney who is bilingual and knows the laws in Mexico and you also know won’t screw you…you are putting yourself at risk.

You are putting yourself in some form of risk in any real estate transaction. How much are you comfortable with? If you invest $100,000 in Mexico can you afford to lose it?

I have a friend, who is a white jew, who somehow had a grandmother from Mexico. He was able to buy land there develop a small resort and is currently selling it. I have also heard that you can own land there but not ocean front, so you see unless you find someone that TRULY KNOWS about real estate ownership laws in another county, state let alone country. It is kind of a mute point. It will ultimately come down to your level of comfort with the implicit risk and reward involved.

Good luck!

Oh and by the way, someone in this topic made mention of our current unemployment rate: “In this time where the unemployment rate is the highest it has been in a long time it is time to demand our jobs back and to look at only American goods.”
Actually if you talk to many economists, nationally our unemployment rate is at it’s lowest level in years with core inflation hovering around 2.6% right now a very manageable level.
Is it time to demand our jobs back? Nobody has taken my job. Like many Americans, I don’t want to pick strawberries or lettuce or clean hotel rooms for less than living wages. I heard a black comedian say it best, “Who else is gonna pick our vegetables? Don’t ask us…we did our time picking.”
Although I do think that immigrants should enter legally and be able to speak english.

How does this relate to real estate? I don’t have the actual figures, so I apologize for that. But you get the point when I say that nearly 50% of homes sold in California last year were to minorities. Which leaves the question, are you still considered minority if your reach the 50% mark.
And depending on your market, you might need to adjust to new realities and learn spanish because when you grab a couple of unskilled day laborers on the corner to do some cheap landscaping and maximize your profits on your next flip, you do want to be able to tell them to work faster and harder so you will pick them up the next time. I digress. Way to much to debate here.

15

This really does relate to Real Estate. When I place a house up for rent, 1 out of 4 applicants invariably does not speak English. I have do negotiate with their grand daughter or niece or something. People say that they don’t pay taxes but go to our schools. I pay the taxes and they are paying (indirectly) through me with their rent. So they can stay. By the way, when you pick up those day laborers that don’t speak English they understand very well when you say work faster and harder and wave your hands at what you want them to do. The language of work harder is universal. If you were in Mexico digging up a flower bed for me and I said trabajo más duro del trabajo más rápido while I frantically waved my hands over what you were doing. You may not know if I want you to plant more red flowers or more blue flowers, but you would know that I wanted you to plant more of them.

16

I sense some mis-information here.

There is, in fact, a part of the Mexican constitution, that has been in place for almost 100 years, that says no foriegner can own land within 50 miles of the border of the coastline. There is no “waterfront” stipulation, that is totally made up.

The mexican government realized they were losing out on foriegn investment many years ago and can’t ammend the constitution without a complex series of votes, hearings, special votes, ballots, etc, so they voted to recognize a “land trust” that allows foriegners to own land in this “restricted zone”. The trust is irrevocable and lasts 50 years. Renewals can be made indefinately. Even if the law changes, the worst that can happen is the government refusing to renew your trust after 50 years. Without totally rewriting Mexican property law, they cannot simply “liquidate” your trust and declare it property of the state.

Hundreds of thousands of foriegners own beachfront land in Mexico through these trusts. They are set up with banks such as Wells Fargo, Bank of America, Chase Manhatten, among others. These places are willing to lend the money in the name of these trusts with the property as collateral. Do you honestly think that BofA would write a $500,000 mortgage without due dilligence on the laws of the area?

Most American real estate firms have brokers in Mexico. Many are US immigrants that have lived in Mexico for a decade or more, speak both languages and are familiar with Mexican law. Call up Coldwell Banker, Re/Max or many of the other larger brokerages and ask to get the contact information for a broker in Mexico, perhaps Puetra Vallarta or Cabo. There are dozens of offices along the coast.

It took me 40 seconds on the Internet to find US-based attornies in most US and Mexican states who specialize in Mexican real estate investment. They have JDs from prestigious universities and are members of the Bar organization. They are not slimy worms in the basements of sweatshops and they are not out to steal your money (not any more than any other lawyers).

Yes, due diligence is required. They don’t have as many laws mandating buyer protections. You have to protect yourself. With half a brain and a good advisor, you should be able to set up the proper Title Insurance (very important!), trust documents, purchase agreements and loan paperwork.

Also, to join the tangent, for those of you who are posting about some bull crap about american “jobs” being “lost” overseas, should notice that unemployment in the US is low, around 4.7 percent. It is also worth pointing out that macro-economists agree that an unemployment rate below 3 percent in our economy is a very dangerous thing and foreshadows massive inflation and other such problems. Your isolationist argument to “bring back” “lost” jobs to America is therefore, economically speaking, unwise, or even dangerous.

ooo I have more… but that’s all for today.

Stew

17

Well thank the lord that Stew came along to set all of us ignorant fools straight.

I bet you make friends easily with all that knowledge and the grace with which you help others.

'Frank

18

I believe you are trying to use this to declare Mexican law unfair. Let me take these points, on balance, compared to the rest of the world with some facts applied.

Disclaimer: No, I don’t own property or any other interest in Mexico and no, I am not, nor is anyone i know, from or living in Mexico. But I have read extensively on Mexican real estate law and immigration law.

This is only true of applying for citizenship and is true in 90% of all countries in the world. This is not required to get permanent residence.

2. You have to be a professional or an investor. No unskilled workers allowed.
This is also true of better than 90% of countries in the world. Are you trying to prove something?
3. There will be no special bilingual programs in the schools, no special ballots for elections, all government business will be conducted in our language

There are many schools which teach english-only or bilingually. The public education system only continues through 5th grade in Mexico and even lower-middle class Mexicans usually opt for semi-private schools.

4. Foreigners will NOT have the right to vote no matter how long they are here.

Incorrect. Upon applying for Citizenship (you must be a resident for 5 years and pass a naturalization test, including language fluency) then you can get a voters card. Only Mexican Citizens can vote… just like every other country in the world. Note, green card holders in the US, despite their “permanent” status cannot vote either.

5. Foreigners will NEVER be able to hold political office.

This only applies to foreign-born immigrants holding federal office. It is similar to the US prohibiting foriegn born citizens from becoming president, but it extends to all branches of federal office, including executive (president, VP) and legislative (congress). This is also common in the majority of the world’s countries.

6. Foreigners will not be a burden to the taxpayers. No welfare, no food stamps, no health care, or other government assistance programs.

No immigrants will get these services, however legally naturalized citizens recieve all of these programs. The US is a bit unique that it gives out assistance to illegal and temporary immigrants.

7. Foreigners can invest in this country, but it must be an amount equal to 40,000 times the daily minimum wage.

This means that they require an investment of about $240,000
Here is an abbreviated list of the guidelines for obtaining US residency by investment means:

Investing in a new commercial enterprise 
      o At least $1,000,000,
      o Or at least $500,000 where the investment is being made in a "targeted employment area," which is an area that has experienced unemployment of at least 150 per cent of the national average rate or a rural area as designated by OMB

C - Engaging in a new commercial enterprise that will benefit the United States economy and

      o Create full-time employment for not fewer than 10 qualified individuals; or</blockquote>
8. If foreigners do come and want to buy land that will be okay, [u]BUT options will be restricted[/u]. You are not allowed waterfront property. That is reserved for citizens naturally born into this country.
Options are restricted in a similar way that they are in Texas (rules about equitable interest, etc) The waterfront myth is actually a zone within 50 miles of the border, but it is mitigated by irrevocable trusts created (usually) in US-based banks.

Number 9, I can’t speak for. If you can document it, perhaps I’ll conceed it, but i’m sure if it does apply, it only applies to visitors.

Number 10 is true of any country in the world. (just because some countries don’t rigerously enforce it doesn’t make it ‘harsh’).

Overall, this sounds like any modern country’s immigration policy.

Did I miss something?

Stew

19

Stew and everyone else,

I really appreciate the info, I have learned a great deal since I lit this topic on fire for everyone to toast marshmellows over. I have already started to develop my trust and have chosen a site like 90m from the beach, it’s beautiful. I spent the last week in Mexico and I can’t wait till everything is complete. If anyone has any questions, I will try to answer them best I can, but actually, Stews info about the roll over trust is very accurate. But I will be as clear as I can about what I did.

Thanks!
Ryan

20

Hey,
My ex-patriot brother has lived near Cabo for over 30 years owning house and land. He raises a garden,(complete with whacky weed), some livestock and fishes for any extra meat. He makes trinkets for the tourists, sings with a band in a Cabo bar. His wife is an RN and looks after villagers on a barter system. My brother is irresponsible and hasn’t had a real job in years. He surfs in the ocean in the morning and rides his horse in the mountains in the afternoon in between the times he is fishing or smoking weed.
He needs to be more responsible like me???
The discussion in other posts boils down to one answer on either side of the border. The question is one of assimilation. If you want to live in a culture be willing to assimilate into your life the positive things of tht culture. Sure, you can hold on to the things of your original culture but you must be willing to be “one of us” which ever side of the border that “us” is. IMHO.
Peace,
Richard

PS: You all need to read “The World is Flat.” It will open your eyes to the fact that the US is lagging way behind the rest of the world in a way that will effect all of us sooner rather than later.