How to invest in properties in Mexico

[Tania Saldana]

I have run into what I think is a great investment but the property is in Mexico. Does anyone know if it is possible or what the process is to get a commercial loan for a property there? Any advice is appreciated, thank you!

[Mike Lambert]

@Tania Saldana

Mexican banks won't grant commercial loans to foreigners. There is a slight chance that you might get a loan from a private lender but you need to have the right connections. Feel free to message me and I'll see if I can help you.

@Leslie Fisher

I have responded to many posts when it comes to investing in Mexico. Feel free to check them out through my profile.

It is not true that there are foreigners cannot own. The only thing is that, in the forbidden zone (less than 31 miles from the coasts and/or less than 62 miles from the international borders), they need to own the property through a bank trust (fideicomiso) or a Mexican corporation.

The down payment for a mortgage in Mexico is not 10%. This is a big lie. I wouldn't trust or listen to anybody who says that in a masterclass. I don't know these people but I've seen their ads on Facebook. They're marketers and realtors so they're trying to sell you something so they're not objective. I don't like to say negative things about what others do so I won't comment further on their content; I think people here are adult enough to draw their own conclusions.

The reality is this. A minority of Mexican banks will lend to foreigners and only up to maximum 50% of the price of a titled property. You will have to qualify and it isn't as easy as in the US.

They will only lend in certain areas, which are the only areas I 'd consider buying for an investment anyway (in no particular order): Puerto Penasco, Los Cabos, Monterrey, Puerto Vallarta, Guadalajara, San Miguel de Allende, Mexico City, Cancun, Playa del Carmen, Tulum and Merida.

So Huatulco, that these people are promoting, isn't on the list. And for good reason. The rental market is too small and there's no active resale market so good luck to sell at a profit.

The Mexican banks will only lend 50% because you don't have income or own assets in Mexico so and they can't go after you in the US. Therefore, if you default on your mortgage, the only way they can get their money back is by repossessing your property and sell it. They don't want to lend in Huatulco because they think that, when reselling the property, the might not be able to sell it for more than 50% of the purchase price! I don't know about you but I don't want want to invest in a place where a bank thinks the property could lose 50% of its value or more.

If you buy for lifestyle reasons, it's obviously a different story. While I'd be bored out of my mind after a few days in a place like Huatulco, I'm sure some people like it.

Finally, if you deal with a real estate agent that hasn't been recommended to you buy somebody you trust, make sure he/she is registered with the AMPI. That could save you a whole lot of trouble.

Feel free to reach out if you need any further help.