Mexico Investment or Vacation Home

[Jesus Santoyo]

Hi All!

I wondered if anyone has invested in Mexico- I have dual citizenship- Mexico and the US. 

I would love to buy some land or a property in the Oaxaga region but wanted to learn more about financing land or RE. 

I am also curious if anyone has worked with a US bank and leveraged RE to finance RE in foreign countries- 

Will love to hear opinions, advice, and ideas on how to make this happen.

[John Mason]

https://yave.mx/acquisition/cross-border

[John Mason]

https://crossborderinvestment.com/

[Mike Lambert]

@Jesus Santoyo

I've been investing in Mexico since 2017 and shared my experience by replying to hundreds of posts in the BP forums.

A few points here:

1. Banks in one country won't finance a property in another country. Like many, you can use a HELOC in the US but, for an investor, that's the same as paying cash.

2. Your dual citizenship doesn't in theory give you any advantage when borrowing in Mexico. Like in the US, it's the residency and where your income is earned that matters.

3. You won't get financing for land.

4. I haven't worked with any of the two companies but that's because I've always had from developer financing and partners so I never needed it. However, I know a lot about it because I use to finance the Mexican banks as a banker and, since I put development projects together these days, I'm interested to know any new financing product available to the buyers.

Regarding the two links posted above, it's buyer beware:

a. I came across Yave but have never investigated them. I clicked on the link and their starting interest rate is 11.1%. I'm not sure you want to pay that.

b. As to the second one, they and others (not that long ago) used to advertise fixed-rate loans at 2.4% and 3.6% interest rates. The thing is the real rate was between 9 and 20% a year because of the structure of the loan, whereby the principal would actually increase over time but it wasn't mentioned in their marketing literature. I found out and checked with them that my answer was right and the answer was unashamedly "you're the first who found out!".

I have had so many people asking me for help re financing in Mexico that I'm studying whether there's a way I can get involved in that business to be able to help them.

Finally, something to bear in mind that the best deals in Mexico can be more profitable if you pay cash than a deal with a mortgage in the US. This is even more true today given the high level of US interest rates. Also, the price of a kind-like property is much lower.