Getting a US bank to mortgage a property in Belize

[Jeff Ashachik]

Hey all,

Does anybody have experience obtaining a mortgage from a US based bank or lending company for an international property (Belize) and have any recommendations? I’m looking for options to finance a condo for vacation/rental income.

[Henry Clark]

@Jeff Ashachik

Not to dash a dream, but I would stay away from Belize, unless you have straight up cash in hand.

No US bank is going to loan in Belize.  You will need to collateralize with a US located asset, if you work with a US bank.

Covid.  This is the perfect time to buy in Belize since the Airbnb business is being hammered.  About 2/3 of the homes in Placencia on the coast are for sale.  A lot of UK and Canadian owners can't go there.  Plus low level of tourist.  Do you have the Cash to ride this out and take any future Covid hits?

Where are you wanting to invest?  If San Pedro on Ambergris Caye, I would really study the infrastructure (water/sewer).

Groundskeeper or Gated Condo.  The first consideration of any property, anywhere in Belize is security for the property.  You either must have a live on site groundskeeper, or be in a Patrolled Gated Community.

Real Estate Market.  

a.  There is no market in Belize for Real Estate. Do not plan on making money buying and selling.  Realize you are talking rental/vacation.  Belizeans don't have this kind of money.  A normal person makes maybe $40 Belize a day, which is USD $20.  So your market is another foreign investor.  Not that many people out there like that.  

b.  Vacation- lets say you have $250,000 for the condo.  At say 5% interest on $250,000 whether you are paying interest on a loan, or could have invested elsewhere, that is $12,500 per year.  For $5,000 per week, I can rent the "best" bnb house on the ocean side.  If I don't like that house or Belize, I can take my $12,500 somewhere else.  Change the figures as you see fit.  Point is, I wouldn't buy a Condo for a vacation spot in Belize.  Even if BNB.

c.  BNB- very little property tax in Belize.  Example on $1,000,000 property you might pay $200 per year.  Very little other cost other than the unit itself.  What is your breakeven in rental days?  Can you sustain no rent for a year depending on Covid.  To me at this time unless you have the cash to float, this is gambling.

d.  You still want to buy.  Then.  Remember CASH is KING in Belize.  You have to be more ruthless than ever in your life.  If they say $250k, you say $150k.  If they say Seller finance, you say interest only for 2 years while riding out Covid.  If they say 25% down, you say 15% down.  If they say 5 year balloon payment, you say 10 year.  Remember their money is tied up and Covid has nailed them.  Your helping them out.  They don't bite, go to the next Condo developer.  I would be looking for a Condo that has already been sold and the owner is selling.  Normally all the furniture, golf cart, bicycles, boats, etc go with the property.  Its not worth hauling back to the US/Canada/UK.  If you buy new imported furniture expect to pay 75% or more import tax.

e.  Buy what you can adjust, not what you want.  With the above approach, your not going to buy your perfect situation, your looking for a deal.  Buy what you can adjust later.  You hate the bathroom you can adjust.  You have to have a top floor, you cant adjust later, buy it.

f.  Realtors.  Working with a realtor tell them what your looking for.  Then tell them you want to look at their oldest listings first and in that order.  For "d" above to work, the owner has to have had there property on the market for 2 years or more.  They have to come to the realization, there is no market in Belize, and they will have to reduce their price.  Don't work with a NEW seller.  They haven't come to the realization, they have to take a shave.  You need to realize that already on the backend.

Remember the first consideration is a "Groundskeeper", otherwise your house will get stolen.  The first thing we did was to build a Groundskeeper's house, not in the picture.  This property which is 50 acres was on the market for 15 years.  They reduced the price by about half, then a year later, we offered about half of that.  The last thing we want is a 3 story house, but we adapted.  Entire third floor will be a Veranda.  Front of 1st and 2nd floors will be porches.

Belize is great.  Lobster season.  Lobster ceviche, cakes, quesadilla and tacos.