Looking beyond the border for investment opportunity...

[AJ Wong]

As a realtor, investor and 'developer' on the Pacific Coast, I sold several properties at or close to 'peak' pandemic boom in March. 

Since we felt that the timing for re-investment was not ideal, my fiancé and I decided to venture down to Northern Baja Mexico until the market tides turned more favorable... So we did what all people do, turned to craigslist and secured a $675 monthly Ocean View apartment for the foreseeable future. 

A couple weeks later our Oregon property closed we headed south for an adventure and recuperation from 4 years of non-stop remodeling on fix and flips. Fast forward six months and we closed and are preparing another remodel for our dream second home Ocean View Casita. 

After swearing off construction or home buying for at least a year, we found the investment potential and quality of life too attractive to ignore. Having lived in several foreign countries, Baja Norte offers many of the advantages of foreign investment, with one key obvious and outrageous differential ingredient...location. 

Our home and business are now located just 45 mins from downtown San Diego and 3 hours from south Los Angeles, or what were formerly known as areas of...Baja Mexico. 

Crossing the border is remarkably simple. Ownership is a bit different but ultimately provides one rights to the property for as long as they would like them. 

As home and investment affordability and opportunity for proper returns have diminished in America, there has been a somewhat forced and somewhat elected migration to the Mexican Dream. Not only are many locals migrating to the coast but our entire area is essentially an extension of San Diego in terms of it's demographics. The majority of our neighbors have license plates from California, Arizona, Nevada, Texas, Washington and for some reason South Dakota. 

At least from my humble perspective the metrics are tantalizing. Our total investment for our custom dream second home will cost the equivalent of one year's rent for a  completely inferior and non-comparable 1/1 in San Diego or Los Angeles.  Meanwhile the projected short or long term rental income return could be near 75-100% of the TOTAL capital investment in one year. 

My thought was when I do decide to rent or re-invest in the States, the majority of the carrying costs would be paid for with foreign rental income. It used to be quite the opposite. You invested in the States to retire in a foreign and affordable land. At least that's what most of my somewhat older neighbors have done.

But what if with remote work and rapid development and integration of technology, infrastructure and regulation here in Mexico the reverse could be possible? 

I'm certainly not suggesting that investments are anywhere near as safe or secure as America, but all investments come with inherent risk and investors fiduciary responsibility is to analyze where to get the best bang for their buck. 

Personally, I'm doubling down. Here's a secret..since we closed in July, Starbucks recently tried to lease space about 200 meters from our front door. Say what you will of Starbucks but their Real Estate team probably has good insight and data to forecast where the next ripe areas for growth are. 

Organizations have to adapt and evolve in order to provide their investors and shareholders returns. Individual investors have to do so with limited self secured resources and usually with more on the line to lose. 

One way of mitigating those potential loses is to lower the cost of entry. For a 1/10 of what it now costs in America, you can 'own' a superior property 15-20 mins way , with identical amenities, AND can reliably return 10-20%+ annually. 

Airbnb's and rents in general here are paid in USD. It might not be the same quantity, but that's the point. A $1500/mo ocean front house here is $8K+ in San Diego or LA. And a $425k house in a private, gated, ocean view surf community with $200/night vacation rentals is $5M+

Additionally with the recent agreements between all North American nations and the cost of energy only expected to remain elevated, Mexico in general is poised for a continued increase in foreign investment and high tech manufacturing near shoring by global companies including the likes of Samsung and Toyota.

I've personally gone so far as to get licensed as a real estate broker here and have begun working with one of the top brokerages in the area, with plans to join a local Realtor Board soon. 

I was wondering if anyone had any thoughts on foreign investment, real estate transactions or even own any properties in North Baja or beyond?

We've done considerable due diligence and have established excellent relationships with local friends, real estate brokers, attorneys and accountants but wanted some real life examples or tales of success or caution by someone who has owned or invested in foreign property before. 

Cheers!