Buying & Selling Real Estate
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated 7 months ago, 05/05/2024
Have any of you worked with RETA/International Living?
I’ve been looking into RETA deals (Real Estate Trend Alert) from International Living. The lead guy, Ronan McMahon, presents some compelling deals. I am curious though, if these deals are as sweet as they sound...
I’m also curious to hear about the complications of owning/investing overseas?
I've connected with a few international developers as well as many international investors here on BiggerPockets. There are definitely some very good deals out there that see better returns than the US. It is certainly riskier but it seems that if you know what you are doing there is a lot of success in investing overseas, depending on the country of course. @Bjorn Nielsen
- Brandon Goldsmith
- [email protected]
- 614-963-3340
This negative review reflects my own experience: https://infolific.com/money-ma....
You might want to ask yourself how they make money. Since becoming a member of BiggerPockets, the only emails I've been receiving are the daily alerts that I ask to receive as well as a weekly digest of interesting articles published during the week past. And when, from time to time, they publish a new book, they send me a promotional email about it, which I have no problem with. Contrast that with what happened after I subscribed to IL: I was flooded with a constant flow of emails trying to sell me something.
What they mightn't tell you in the articles is the commissions they might get from the developers/sponsors of the deals they advertise. The legally have to disclose that but it's in the fine print that people generally don't read. No wonder that, as mentioned in the attached article, pretty much everything is described with rose-colored glasses and there is a lack of anything negative.
As far as I know, they haven't promoted a development in the Dominican Republic, in spite of the fact that it can be a great place to retire and invest. During a recent trip in the country, one of my connections on the ground (who promotes condo developments) mentioned that they contacted them to see if they could promote condo projects there. He mentioned to me that they were asking for outrageously high commissions, which stopped the conversation.
Contrast that with Pannama, which they have been heavily promoting. While the country has been doing pretty well for itself, writing that its capital city is another Hong Kong or Singapore makes no sense for anybody who has any understanding of international economics. And suggesting that the city's real estate prices should align with those of Hong Kong, which are 10 times higher, is utterly ridiculous. What they won't tell you is that there is an oversupply of condos putting pressure on prices and they keep building. That's much more relevant information if you want to assess the profitability of an investment or the lack thereof.
As the saying goes, "If something looks too good to be true, it generally is".
International real estate investing makes total sense but you have to educate yourself so you know what you're doing (same as if you invest in domestic real estate). Don't fall for scams! As to the complications of owning/investing overseas, it's not easy to answer general questions but basically depends on the country. However, it's oftentimes not as complicated as it sounds. I've answered many posts on the subject here so don't hesitate to look at those replies and feel free to reach out if you have any questions.
@Mike Lambert thank you very much! That was a great article with a LOT of comments, and I appreciate your additional insight. It definitely does seem too good to be true, on every deal they put out. Thanks for helping to temper those rose colored glasses they use
I've been super intrigued with Ronan and his RETA offerings as well. I may actually sign up for RETA, seems a small price to pay to see the actual deals he's promoting. I do get a lot of salesy emails already from him and International Living, so I'm ready for that. I also expect that they make their money on the subscription side of things as well as a kickback from the developer, both I'm fine with as long as what's being sold is solid and has the upside he's claiming.. He's offering a membership subscription deal right now that might push me to join..
A friend of mine who's in real estate in the Dominican Republic and I are looking at doing a development in the Dominican Republic. He told me he contacted them to see if they could promote the project. He stopped the conversation right away after hearing about the huge kickbacks they were asking.
I don't like salesy emails. I believe businesses should solve problems and add value to their customers rather than trying to sell them something they don't want or need. However, there is inherently nothing wrong about salesly emails. After all, it's the reader's responsibility to make sure he doesn't fall for them.
When I hear people complain about receiving them (and you're clearly not one of those), I'm thinking "Why haven't you unsubscribed?". And, when people fell for the salesy emails and get into a bad investment, I'm thinking "Weren't you a little bit naive? Why didn't you do your own due diligence?". In other words, it's our responsibility to make sure we don't get scammed or do anything against our own interests.
I find it absolutely extraordinary that you don't have any issues with the kickbacks. Imagine this situation. You're hiring a real estate agent and he asks you to pay him a small fee to find deals for you. When you sign the papers to hire him, there's some small print at the end (that pretty much nobody reads) that says that the agent will offer you deals and, if you buy, he's gonna get a generous commission from the seller. Can't you see the conflict of interest here? He's gonna make most of the money from the seller. Because of that, he might as well "work for you for free". He still asks you for a small fee to make sure that you're a serious buyer and that you're gonna buy his offerings so he can get his fat commissions. When he wants to get more buyers, he's gonna do a promotion and drop the small fee he asks buyers to pay to convince more unsuspecting buyers to join. He doesn't mind doing that since he makes most of his money from the kickbacks. Can't you see that, because he's making most of his money from the seller, he's gonna try to defend the interests of the seller above that of the buyer? This, notwithstanding that such a scheme would be illegal in a country like the US for obvious reasons.
To your point, if the deals are good and the figures are there, it could be a win-win-win for everyone: the seller, the agent and you. This is where the second issue comes: hyper inflated figures that come from nowhere.
Now imagine that the agent knows a developer that's creating a new seaside resort in the middle of nowhere, say in Panama and gets some sort of exclusivity to sell the huge amount of condos to be built to his US clients. While there is absolutely no rental track record, he estimates the potential (and the word potential is important here) rental income at a very attracted level based on comparisons with places like Hong Kong, Singapore or Dubai. Now anybody who knows a thing about economics know that Panama City will never come close to anything like Hong Kong, Singapore or Dubai. Even if you don't have the knowledge to judge the accuracy of the figures from the agent, they can see that it's in his interest to inflate them as much as possible to make sure buy and he gets his fat commission.
Now let's assume that you're skeptical and you decide to do your own due diligence and start to consider supply and demand. On the supply side, you discover that most of the condos have been sold to the agent's clients who fell for the same pitch and so they will all be put on the rental market. So, the buyer will end up having a lot of competition from fellow buyers who all own the same cookie cutter condo. On the demand side, you ask your friends and entourage if they've ever been to Panama on a (beach) holiday. Nobody has. Why? Because they rather go to Mexico, the Dominican Republic or Costa Rica. These places are closer, cheaper and the beaches (and land) are nicer. So, you'd ask yourself where your lofty rental income is going to come from.
The agent won't care that you don't make your rental income as it won't affect him; he already got his sales commission long ago. Of course, you're not going to buy through him again but he won't care that much about that since he kept sending tons of email all year long and have new people falling for them.
Buying international real estate can be very profitable if done properly. Sadly, it sometimes gets a bad rap because of people who lose their shirt because they were gullible and then they blame the overseas professionals and suggest they're all scammers instead of blaming themselves from being naive. One thing applies for sure there. Caveat emptor or buyer beware!
The good thing is you're a BiggerPockets member so you're most likely not a gullible person and you share on BiggerPockets to get feedback and learn. So I'd bet you're either an already successful investor or you're gonna be one soon enough!
@Mike Lambert agree with many of your points and most specifically with "buyer beware".. With any business, especially investments, there are a ton of sharks out there just looking for a gullible mark to target in on. We all in real estate get pitches all the time, some legit and most not.. I'm on the overly analytical side of things and start with the wall up before jumping into any deal or relationships for partnerships. Thanks for your input..
Originally posted by @Doug Schorr:
I've been super intrigued with Ronan and his RETA offerings as well. I may actually sign up for RETA, seems a small price to pay to see the actual deals he's promoting. I do get a lot of salesy emails already from him and International Living, so I'm ready for that. I also expect that they make their money on the subscription side of things as well as a kickback from the developer, both I'm fine with as long as what's being sold is solid and has the upside he's claiming.. He's offering a membership subscription deal right now that might push me to join..
Mike Lambert is correct. There are huge kickbacks with these types of promotions. In my opinion, International Living is scraping the bottom of the barrel. They have some interesting articles and some "stats", but most people with experience with them will tell you very quickly that they are a sales machine with little interest in the good for the community. If you want close insights into them, ask the Expat community that lives in the areas that they discuss (retirement communities abroad).
If it were good, so many people wouldnt shy from their experiences. You cannot live like a king in Costa Rica for $1000 as they want you to believe. Its this same sales mentality that they use to promote real estate. I would put boots on the ground or find trustworthy boots on the ground at the very minimum before diving into a deal they promote. I'm taking my second trip in two months back to Costa Rica to look at investment opportunities. They dont have an MLS, or Zillow. The best deals, with real analysis, is done in person, or with a partner in the trenches.
OK. I have bought 2 RETA properties and will never do so again!! Anyone that promotes this hard and runs contests to be the first one at 1pm on Thursday to get this deal, you know is not a professional International realtor, but a pro marketer and Scammer. I’ve never used their legal people either as they will never disclose the true risks. This last deal this week, they did not disclose that you don’t even hold title to the property, but still have to buck up first. The rental returns are greatly over exaggerated and many monthly Mgmt and other costs are hidden, under quotes or omitted in their promotion.
Don’t trust RETA to do your own homework.
I registered to BP just to reply to your thread. I am a RETA member and was notified of a "deal" 6 months ago in Playa del Carmen. I flew down the next day to scope out the situation. I met with the developer's sales staff (and never mentioned I was a RETA member). The prices in the greater development were less than what was being offered from RETA. I emailed RETA twice with photos of the sales sheets I received and NEVER heard a reply (similar to the previous poster).
When an opportunity is forthcoming, RETA sends emails at exactly 12 noon daily, gradually releasing little pieces of frothy data, building suspense until the BIG DAY! Obviously they don't represent the seller. Yes, they have fine print that spells out they are compensated, but I wish I knew to what degree. The previous poster mentioned issues with associations fees, etc....yes, this is never made clear. Thanks for everyone who contributed to this thread, you have confirmed my suspicions. Certainly, at a minimum, RETA members need to know this a seller's agent.
@Johnny David thanks for sharing. I’m a RETA member and have been considering the plays deal and their newest one in Merida but this kinda scares me that I can maybe get a better deal elsewhere.
We bought a 2 bd condo 1000 square feet preconstruction. Ronan can sell the developers inventory very fast therefore the steep discount.. We have a beach condo in Panama for 137K furniture included. We visited the area and the builds are top notch. Ronan looks out for his investors He's kind of a wholesaler in a way so he shouldn't be ashamed to take a bit of a profit . He gets good deals. We am happy with RETA.
Thanks @Nadja Leblanc I'm a member too just haven't gotten in far enough to purchase, yet.
Congrats Nadja! If you were looking to get a nice condo by the beach for lifestyle and you son't care that there's not much in the vicinity besides your development, you can uncork the champagne! Otherwise, the time to uncork the champagne will be when you make the promised returns when renting or selling, which might never come.
This has nothing to do with wholesaling! In any sale transaction, the seller and the buyer have opposite interests. The seller wants to sell at the highest possible price and the buyer wants to buy at the lowest possible price.
To illustrate this, let's assume that I'm the wholesaler and you're one of my buyers. You're paying me a commission to find a property for you. I'm being paid by you and the lower the price I can get for you, the higher my commission. Our interests are perfectly aligned and I'll try to get you the lowest possible price for the seller.
It's a different story if I'm being paid barely nothing by you and a fat commission by the seller a fat commission to sell his inventory, which many of my buyers might be unaware of because I never mention it to them and it is only in the small print because of my emails because it legally has to. Where do you think my loyalty resides? With the developer or with you? The idea is to create a win-win-win for all, the developer, me and you, and that would be a good thing in theory. As soon as our interests differ though, I'll have side with the developer, who pays me. The more condos I sell, the more money the developer and I will make. So, I will suggest to you that you can make this much in rental income and capital gain upon resale and I will supply the figures that I have carefully chosen to demonstrate that. You won't question all of that because you trust me. After all, I'm supposed to have your best interests at heart. Whether you make any profit with your condo or not, it won't affect me, as I'll have made my commission a long time ago. If you later don't make as much money as I suggested you would, if any at all and you'll come and complain to me, I'll respond that I don't control the resale or the rental market so it's not my fault. This has nothing to do with wholesaling!
So if I'm trying to not be the victim of a well-oiled marketing machine, this is the way I'd look at a deal like this. The reality is that we're talking about a brand new development "in the middle of nowhere" so there are no comparable when it comes to renting or selling. Any estimates therefore are pure speculation so, if I was on your side, that's what I would tell you and I wouldn't make any speculative suggestion that helps me sell to you. How much money I will make when renting or selling will depend on supply and demand.
Let's start with the all-important demand. We're both from Montreal. I don't know about you buy I don't know a single person who has been to Panama on a beach holiday. While other countries in the area are much easier to get to because they are closer and have invested billions of dollars promoting their tourism industry with great success, bringing direct ever more direct flights and massive investments to their country, Panama, although wealthier, has never cared to do that. Panama is about the canal and the banking industry, it's not known as a tourist/beach destination and it's a well-known fact that they've never cared promoting them as such. And frankly, you have similar or nicer beaches in well-established tourist destinations much closer so why would they bother?
So the first question I'd ask who do you think is going to rent your condo? International tourists who've never heard of the place that's not being promoted? The wealthy from Panama City who generally have their own place and don't need to rent or want a much bigger and luxurious place when renting? The only clientele I can see is the middle class Panamanians who will only go their for the weekend or for their holidays. I'm not sure how I'd make any decent returns with that limited low income clientele.
Then I'd look at the supply. I'd ask myself the following question: "How much of the whole development has been sold to people like me with the same kind of deal over the years". I'd guess it's probably a huge proportion, if not pretty much the whole thing. What that would mean is that, when I want to rent or sell my condo, I will face competition from many other investors renting or selling exactly the same cookie-cutter condo with the same furniture package. Being part of a rental pool would partially help limit the competition in this case but I'd still have to compete with the owners in the other buildings in the development who don't have it. And most importantly, a rental pool doesn't help if demand is low. as everybody with end up with a low occupancy. Also, the risk is that, when owners realize they don't get the promised returns, they'll all want to sell and there's gonna be a huge amount of selling in an illiquid market, which could create a cutthroat price competition. Not the situation I want when selling.
So the risk is low demand in the face of high supply and a cookie-cutter condo. Successful short-term rentals are about exactly the opposite: high demand, limited supply and being able to differentiate with a condo different from competition.
You bought and I'll hope you do well and enjoy your condo too! Even though I tend to be on the more adventurous side, this is way too risky for me. I'd rather spend my 137k in a place that is a proven tourist destination with existing comparable for rentals and resales, that I can easily access when I want to do it and that isn't in an isolated place. Everyone is different though.
Bonjour Mike Lambert. Big response Sounds like you have a lot to say about it. We did our due diligence on this property and decided for the price point and the quality and all the other considerations we felt that we would get a nice return on this investment. We did buy sight unseen but we actually flew down there to see for ourselves.. Not too impressed with Panama City but the resort and the plans they have for this property were truly impressive. The beaches were very nice as well. Soft sand warm waters.. Awesome. Once the word gets out that this place is available we have confidence we will get the guests to stay.
I'll just say a couple of things. The country in Panama is promoting tourism- big time.. the road to use to get to the beaches is being updated and streamlined. its their Path to Progress initiative. So getting ahead of the curve is a good thing for any investor. The property is only an hour away from the city. 2nd The developer has a sterling reputation for creating beautiful projects.. He's the one that created islands off the coast of Panama city - a hugely successful development . He brings that same attention to detail for this resort. and finally Ronan McMahon has been in the business of promoting these kind of preconstruction opportunities for ten years or so now. and he's growing.. getting more purchasing power as he grows so that he can offer discounted properties for his members. If he was such a scammer that others are saying about him then my belief is he wouldn't be able to last very long.. Word would get out.. INvestors would drop him like a hot potatoes.. so far that hasn't happened.
That said all investments are risky. We decided that this was a worthwhile risk.
Mike from your BP bio it says you are an international investor. Thats cool! where are you investing..? What areas do you like? We are looking in Portugal now for some nice STR properties . If you know of any opportunities there please share. :) Cheers
@Nadja Leblanc I am based out of the USA (Arizona) with Engel & Völkers. However, my business is geared towards helping investors acquire property in Portugal as well. If you'd like to discuss further what more specifically you are looking for, I could keep it on my radar. Cheers!
Bonjour Nadia, I never suggest it's a scam. It's a well-oiled marketing machine the purpose of which is to make the maximum amount of money (like any business would do). For all intents and purposes, the main objective is to promote and sell condos. There's no doubt you're gonna get your condo and it's going to be nice. I was just suggesting that it's not the great financial investment it's being sold as. Isn't what mention about the country and the path of progress is almost word for word what is mentioned in the marketing promotions.
I'm not sure how you do your internet searches but there's plenty of complaining around. There should be many more but most people don't like to admit publicly that they fell for a fairy tale when they should have known better. You won't find much here because BP members generally don't believe too much about rosy stories being spread by well-oiled marketing machine. Check out @T Grein's comment above though. Also, have you seen many comments of people who claim that they bought and got the promised returns?...
I have a lot to say about this because I know a lot about it. A girlfriend showed me a similar deal, was interested in buying and asked me for my opinion. I was aware since I've been a recipient of some of then marketing material. My answer to her was similar to my answer to your post. She was invited for a "due diligence" trip by the developer at his expense and she could have somebody with her. So we decided to go together. One of my friends is a real estate agent in Panama City so it was a great opportunity to see him.
When we saw the program of the trip, it was fairly obvious that the trip was organized in a way that we would only have the time to talk to people linked to the developer or the deal instead of taking to other independent professionals. We were to arrive on Thursday night and leave on Sunday. So we decided to split. We arrived one day earlier. She did all the activities organized by the developer and got brainwashed by the developer and his people. Pretexting that I had to stay at the hotel to work, I met with independent real estate agents bankers and lawyers. I had easy access to meet the right people because of my friend and because of the fact that I used to finance Panamanian banks when I was a banker. In the evening, we would meet with my real estate agent friend for drinks on a terrace in Casco Viejo or at the Sky Bar downtown. That was actually the nicest part of the trip because of the drinks but, seriously, we would shared our conversation and my friend would debunk the stories my girlfriend had been told during that day and those contained in all the emails she had been receiving prior to the our. Which kind of due diligence did you do? My girlfriend's style or my style? Were you introduced to a lawyer? Did you talk to any real estate agent? Did you ask the lawyer if she was getting remunerated to be introduced to you? Did you ask whether the lawyer has any connections with the developer, which would be a huge no no as there would be an obvious conflict of interest there!
These stories will certainly be familiar to you. It is true that Panama has done a great job economically as a country. In used to finance the international trade in my previous career and I understand that claiming that Panama City will become another Hong Kong or Singapore and that therefore Panama City's real estate prices should catch up to those of Hong Kong or Singapore. Many people who have common sense would believe in that so they stop short of saying that. Instead, you will read that Panama is becoming another Hong Kong or Singapore and then you'll be shown a chart comparing real estate prices of the three cities. No need to write anything more, as your brain will automatically infer that prices in Panama City should catch up with that of the other two cities. Marketing experts know that. Isn't that called a white lie? My real estate friend, a proud Panamanian, almost fell off his chair when he saw that.
Certain organizations are continuing to promote investing in real estate in Panama City, in spite of the fact that, as confirmed by the real estate agents I met, there is a property glut and prices have been going down. If you promote deals in Panama City (to make commissions) and you hopefully know what you're taking about, you clearly know about that. They're not gonna tell that to the prospective buyers but they can't lie and pretend there is an undersupply either. So, what do they do? They tell you a true fact, that Panama City cannot extend any more because of the canal and the geographical situation. Then, your brain again puts two and two together. The city is become another Hong Kong or Singapore but cannot expand so property prices have to go up. They don't need to say anything! Why has the reality been different. Because, as you have seen for yourself, Panamanians love their skyscrapers. And there is a lot of space to build more of those and that's exactly what's going on, hence the oversupply situation.
Most importantly, when looking at the merits of the deal itself, my main concern was about the location, as I mentioned in my previous reply. After all, real estate is about location, location, location. You mentioned that Panama is promoting tourism big time. That's what they should have done (in my opinion) but never have. How do you know they're doing it now? Is that what you were told or have you verified that with independent sources. I bumped on plenty of ads for tourism in the neighbouring countries but I've seen none from Panama so call me skeptical. I'm open to believing it but I'll have to see it first.
To illustrate my point more clearly, let's take an example from close to home. Let's assume that I create the best possible condo or cabin community in the middle of nowhere int Abitibi and that there's nothing else on the market as nice or close. I cannot expect that I automatically will get renters because:
1. Nobody has ever heard of the place and so people won't search for it or won't find it, unless the ministry of tourism of Quebec decides to promote it;
2. Even if my place would get known some way, I still face the problem that Montrealers will rather rent a place in the Laurentides, which is an established market, where there is more stuff to do and, most importantly is much closer to town, as people don't want to waste part of their weekend traveling long distance. Easy and quick access is very important, as my friends working for Airbnb keep telling me.
Obviously, it's not impossible that you'll be happy with your investment (it's just a question of odds) and I hope that that's what will happen.
Regarding the places to invest, I'm getting the impression we have both the same interests. Latin America and Southern Europe, which I think are the best places. And yes, Portugal absolutely and I'm more than happy to share what I know.
Many real estate investors have connected with me about International real estate but they rarely live in Montreal so we've had to use Zoom or the phone. That's great but I think connecting in person is even better. I'm not sure where you live in Montreal but I'm always up for meeting for coffee if you want.
Some really good points being made in these posts. My friend purchased a RETA property in Akumal and takes possession in April 2022. I am very interested to see how things go with his rentals. He is very experienced in real estate and is now living in Costa Rica.
@Andrew Taylor that will be the real test. How does it actually perform upon delivery. I am a member of RETA, haven’t pulled the trigger yet because the idea of paying and waiting two or three years for delivery on speculation keeps scaring me away.
Thankfully, there's no need to wait for years for delivery before assessing whether it's likely to be a good investment or not. That whole business model is based on the fact that, unlike Andrew or Doug, many other people are a sadly a bit lazy and they like to be sold a nice fairy tale. In that case, do your own due diligence and go there on a holiday there to find out for yourself.
I've stayed in Akumal at the Grand Sirenis Resort. I'm not the kind of guy who likes all-inclusive resorts but I was with friends. I took the opportunity to venture outside of the hotel to look at the local real estate market. In my opinion, Akumal is a nice little town but it's super boring there. There's not much to do. We all agreed that we'd never rent a short-term rental there. There are no plans I know of to make that little town anything different than what it is, apart from developers building condos there and trying to sell them with a story that doesn't have legs. Most tourists who go to the Riviera Maya want some degree of "action". They want activities, restaurants, cafés, shops, yoga studios. There isn't very much of that in Akumal. Also, most people have never heard of the place so they're unlikely to go there.
These are lifestyle properties, not investments. They can be ok if you buy mainly for your own use and want to be far away from the hustle and bustle and rent to just cover your costs. These properties will appeal to certain renters but it's going to be a tiny minority and you'll have plenty of competition for that limited demand. If you are better than the competition at marketing to capture that demand, you could do well I guess but how likely is that? Andy, if your friend is a successful investor, he might be able to succeed where the average investor wouldn't so he shouldn't necessarily start worrying about this.
Aside from the limited income potential, the other main issue of the illiquidity of that market (which is important when you want to resell). I visited a 12-unit condo building from a reputable developer there in 2017. The condos themselves were nice but, 4 years later, the developer still hasn't sold out. In that timeframe, the real estate market in the Riviera Maya has been red hot so this is pretty bad.
The developers and the promotors of these deals (who get paid fat commissions to sell them) might be the only ones who will make (serious) money there. There are way better deals on the market in my opinion.
Conclusion. Don't believe the hype. Do your homework. Use your common sense. Draw your own conclusions.
Great insights, Mike.
I just purchased a unit in the Samsura complex in Tulum with a few friends and also picked up a unit in Puerto Vallarta with my friend who bought in Akumal.
We researched the builder first and then the location. Tao is a builder Ronan has done a lot of work with and the quality is excellent. So we feel that the condos in PV will turnout to be high quality units in the end. The Tulum builder was a bit harder to research so hoping that works out.
Tulum and Puerto Vallarta are pretty much no brainer locations if you live in BC, Canada. Pretty sure I can fill up the rentals with just my own friends 8 months of the year then hopefully locals in the summer months.
I will probably pick up one more Puerto Vallarta unit in 2022. I also have a 30 year plus real estate investor in PV who is boots on the ground.
Real estate success is all about due diligence and knowledge especially of the market you buy in.
I am interested in the Algarve in Portugal and with all the Brits having to sell up we should see some deals.
Again my buddy with the Akumal condo is heading to Portugal this summer and has spent about a year researching the market and making contacts. I know if he finds some good deals they will be good deals.
In short do your homework, ideally find a local who is a trustworthy contact in the buying area. Make sure the location is popular and easy to get to. Research the builder and go look at previous builds or get a friend to go visit.
I think Ronan does some really good research and works with some pretty good builders, but at the end of the day it’s all up to you to make sure the property ticks all the boxes.
One thing I missed is RETA does get you some pretty good payment plans if you live in North America.
Those payment plans are not available to Europeans from what I can remember. So if the timeline works and the payment plan makes sense it can make buying a property much easier.
As we all know it’s a leverage game and if you can make the numbers make sense you can potentially make some good returns.
I generally hate to be the party pooper but it's important to make sure that more people don't fall victim to well-crafted misleading marketing without knowing what they're doing.
Yes, Tulum and Puerto Vallarta are well-established destinations but, like everywhere else, there are good and bad deals. The reality is that many people buy the wrong deals aren't gonna make much money. This is precisely why I spend time sharing my knowledge and experience in the forums here. I can almost guarantee you that there is one thing most people who buy in these deals aren't thinking about. I hope you did or you might, like them, be in for a nasty surprise.
The majority of people who buy condos in places like Tulum or Puerto Vallarta aren't investors. They're buying for lifestyle and want to use their own condo at times. They're not investors. Many won't want or care about renting or they will just rent casually part of the time just to recoup their costs. If you buy in a the right small boutique project, you don't mind if all the buyers are investors because your competition will be limited when renting or selling. If you buy in a large project, you're getting a cookie-cutter condo like your fellow buyers and you need the lifestyle buyers to make sure that there isn't too much competition when renting or selling.
These projects are large and the buyers are almost exclusively investors. This is the worst possible combination. You'll have cut-throat competition with your neighbours when you want to rent or sell and you'll have to compete on price, a situation the shrewd investor wants to avoid, especially when it comes to short-term rentals. I have friends who manage this kind of properties in Mexico. That's what they tell me and, after all, it's common sense. When justifying the rental income you're supposed to make, they selectively handpicked the condos that rent well in the city (but don't have that issue) and don't show all the similar condos that rent for cheap. If those practices don't bother you, I'm not sure what will. So the nightmare scenario is this. The buyers aren't going to make the rental returns they've been "promised" so they'll want to sell, possibly many at the same time. So, they won't get the return when either renting or selling. I sincerely hope this won't happen to you.
On another note, as everybody keeps repeating on BP, investing is about numbers, not just the quality of the construction. It's awesome if you get great quality construction but that's the point of having of having that if it doesn't make you money when you rent or sell? The quality of the construction in Mexico is great in general so all you need to do is avoiding to buy from those who cut corners.
Interestingly, a friend and I were looking for land in Puerto Vallarta a few years back and somebody brought that piece of land where the development you bought in is going to be located. We didn't even look at because we didn't like the location. And, in Puerto Vallarta, real estate is really about location, location, location. In Puerto Vallarta itself, the grand prize is the Zone Romantica. You can make the most rental income there but properties are very expensive. For developers, there's simply no more land available. They'd have to buy houses and demolish them but the purchase price would be prohibitive. So the developer of your project had to go elsewhere and this place was good for buyers who don't do a thorough due diligence by themselves. If the buyers go there today and see what's around, I bet most of them would never buy.
The argument that's being implied in their marketing is this. Buy 15 mins away for the Zona Romantica, pay less and make the same rental return. This is egregious! It's like saying buy in the Bronx rather than in Manhattan! People who want to go to the Zone Romantica want to stay there and have no problem pay for it and those who want something cheaper will rather stay in Nuevo Vallarta. Staying in the Zona Romantica is part of and is indispensable to their whole experience. They don't want to be close to it or 15 minutes away, and especially not in a surrounding that's unattractive. They don't want to waste 15 minutes going back and forth every time they want to buy something, get a coffee, go to a restaurant or a nightclub. You'll never get anything close to the rental income you'd get in the Zona Romantica. So, putting one and one together, my fear is that you'll find yourself in an unattractive location with plenty of competition so the risk is you'll have to rent very cheaply to get occupancy and there's no guarantee that even that will work.
Brandon and David keep repeating one of my favorite sayings in the BP podcasts: "How you do anything is how you do everything". In my book, when you use questionable marketing practices and half-truths on a systematic basis, pretend that you have the interest of the buyer's at heart when in reality you get your pay from and therefore have your interests aligned with those of the developer (and only mention it in the small print that nobody sees because you legally have to), you can't be trusted on anything.
Again, I hate to be the party pooper and I hope you'll do as well as you can but I think it not sharing this would be a disservice to the BP community. Also, I hope that the reader doesn't take this as being a piece of advice or my own opinion. To me, what I wrote is mostly plain old common sense.
Andrew, sadly, we all too often tend to leave our common sense at the door in the face of a well-crafted piece of misleading marketing (I was there too when I began). So, this reply was more to avoid having other people unwillingly fall into that trap than it was a reply to you specifically. In any case, it seems to me that you're a smart guy and that, eventually, you're going to end up finding your own deals as you go. As fellow Canucks, we seem to have some common interests in our investing so we should definitely stay in touch!
Any realtors, developers or sellers you recommend working with, in Puerto Vallarta, Mike?
No point in reinventing the wheel. Looks like you have already done loads of groundwork and have a lot of Mexican RE experience.
I am thinking we would be interested in buying another property around the summer/fall of 2022. We should be finished all our immediate projects by then. Hope we can head down in April for some research. I should hook you up with Gord Lemon who just moved to PV. He is an amazing resource. Great insights on RETA and all developers. Always take a balanced approach.
Trying to send an attachment, Mike, but it won't send unless we are colleagues.