All Forum Posts by: Eli Koren

I am a US developer in Riviera Maya, have just completed a project in Tulum. Went through all the process from locating the land to permits, construction , marketing, sales recruiting local professionals as architects, lawyers, brokers accounts etc. It was a difficult but very interesting and profitable venture. I would love to connect and share my experience. Moving forward, I am in a process of locating land for new projects. This time I won't relay solely on my own capital but will syndicate the investment with other US partners. In any case it's going to be i n Riviera Maya, occean front or close by, perfectly located for Air BnB. I would love to exchange ideas with anyone who is active or interested in that area of Mexico.

@Mike Lambert

Thanks Mike for your detailed answer.

The first project was relatively small - 8 units including 3 retail spaces. Since it was learning, I used my own capital. Moving forward to larger projects, I would have to raise capital.

It is true that most investors wish to combine the perk of having a vacation condo plus ROI. If I offer a pure investment than it does not have the same appeal.

I came by an investment model used in another country where the investors were able to receive an interest during the construction time but could down the road could add the necessary capital and buy a condo in a presell price.

Another issue that I don't find the solution in the syndication literature is how do you finance the interest paid to the investors when there is zero income during the construction. Is it financed by debt?

Regarding the Tulum market. Yes it's pretty saturated and new projects are coming up.

Actually, I am planing the next project outside Tulum.

You assumed that the expected ROI for a US investor in Mexico is similar to the US. How did you get to that conclusion? Don't forget that bank loans interest in Mexico is much higher than the US interest what pushes among other reasons the development profit much higher.

It's not rare that a developer complets a project with 30-40% profit from sales that together with presale and leverage can drive to a much higher IRR.

It's possible that an attractive offering model should include the option to switch to ownership of condos plus short term rental at the end of the construction.

I will be happy to hear your input on the ideas I outlined here.

The

 Hello Mike, I saw that you are active in Mexico. Me as well. I am developing in Tulum, Riviera Maya and I would like to implement your investment/ purchasing model in my future developments. Its not totally clear  to me how it works. Could  you further explain and also did it actually worked out for you in Puerto Valarta?

BTW, I have 2 penthouses left in the building I have just completed in Aldea Zama, Tulum if you have any interested clients

I am active in the Tulum/ PDC market in Mexico if somebody needs any connections or advice 

Hello Guys,

I am new to the Forum. Found the forum while looking for information about Syndication as a tool to recruit Investment.

I am based in the US and Mexico and currently just completed a mixed Vacation Rental Boutique building project in Tulum, Riviera Maya, Mexico.

Looking forward to develop additional projects in the area which is blessed with high volume of local and foreign visitors. I would like to expend by utilizing investments in my projects and am wondering if sponsering syndications is the way to go and if so how to structure the offering. Construction loans are available in Mexico but its a complicated and very expensive process.

As a developer, I find and buy the land, plan and obtain all the permits, recruit a general contractor, market and sell the condos to investors who either use them for part time living or list them on AirBanB. 

This is an establish market in an area which is number one destination for North American tourists. Therefor many US, Canadians and Europeans buy properties in the area. Normally (prior to the Corona age) the annual expected return was over 10% (net) and the average appreciation around 6% annually.

Taking into consideration that the time to complete a project is between 1-3 years (depends on the size) and my strategy at the moment is to develop the project and to cash out, I am not sure that offering a preferred investment is possible unless I am using my own capital to finance interest distribution.

Actually, I am exploring 1. The right structure for an offering that will serve my capital needs but also will be attractive in the eyes of investors 2. The legal requirements considering the fact that the project is overseas and the Sponsor can be either US citizen  or  foreigner 3. What are the effective methods to distribute such an offering and actually to obtain an equity.

I will highly appreciate any input especially from members who are experienced with foreign Syndication or Crowed Funding.