All Forum Posts by: Kathryn Morea

 Yes you can check eventbrite and facebook.  Or send me a DM and I'll send you the details.  Jan 9, 2025 is our next one.

Ryan, renting a place in PR to learn the market better sounds like a good idea.   Another idea is to partner with someone who is located in PR and better understands the market.  But honestly, if you live here, you will understand and be more patient with the investing scenario.  Everything takes longer.  Labor, supply chain (we are on an island) and red tape: from offers and closing, to funding to permits.  Island time is a real thing.  And some things that you can get in the mainland are just not available in PR.   

If it's so hard, why bother at all?  Mostly because the tax incentives are *insanely* good.  Not for a single airbnb like you are seeking (you and everyone else) but because if you start a BNB or a guest house or a hotel, you can get 40% of your investment back in the form of a tax CREDIT that you can sell for about 90 cents on the dollar.  Read that again.   That means an 800K purchase and a 200K rehab (1 million invested) can result in a 400K tax credit that results in 360K CASH back in the pocket of the investor.  

And that BNB that just got 40% of their investment back is now competing with you, the small investor with a single condo that you paid full price for with no tax benefit.  So yet, there are a lot of fresh units just hitting the market this year and new ones that will hit soon adding to the competition. 

So if you want to kill it in the PR market, maybe think bigger.  But I recommend you study it much more extensively before diving in.  I've been investing since 1989, and PR investing is harder than anything I could have imagined.  But it can be profitable. 

Yes, we meet the 1st Thursday each month for our main evening meeting and we meet the 2nd Saturday each month at 8am for Dealmakers Breakfast Club.  I can't post the link here, you can dm me or search online. 

Hi Ryan,

I moved to Puerto Rico in 2020 and I am invested heavily in the market. I started REIA Rico in 2021 and have at least 2 meetings a month for real estate investors.

I'll be honest, what you are seeking is what almost everyone who reaches out from the mainland is seeking. Exactly. 20% down financing for investment property will not be easy but if you have a W-2, maybe it's possible. Not sure. Try to get preapproved from a local loan broker or Co-op. Stay away from the top 2 banks, they can take months to actually finance you and saavy agents wont accept a preapproval from them because they can take forever. Mainland banks can not finance in PR. A few rare exceptions. Finding a condo that allows Airbnb/STR will be challenging, they're rare and cost more because of it. A few years ago sellers weren't accepting offers with financing because there were so many cash buyers. That's probably changed. However, many sellers will not accept an offer subject to an appraisal. That's because the appraisals here are typically horrible. Be prepared to come in with additional cash to close due the the appraisal.

The STR market here has become way more saturated and competitive especially in San Juan. Probably buy during hurricane season (now) to get the best deal. Dec/Jan are peak STR months. Generally all months other than Sep-Nov are profitable.

STR Property management is common and I know a lot of folks doing this. When you are on the island, come to our meetings, you will meet a lot of people / resources there. Good luck.

Hi Alan, we would love to have you connect with our REIA Rico group.

I think you need to contact an attorney on the island who specializes in inheritance / herencia laws.  Cool project for you.  Good luck. 

 I would mention here that a typical condo or single family does not qualify for the Act 60 TOURISM tax credit (which gives you up to 40% back)  - the project needs to meet certain qualifications as a guest house, hotel, villas or bed & breakfast - it can be as little as 3 rooms.  

Would I apply for TOURISM tax credits on a 3 room bed & breakfast?  No way - it's too much work.  Buy a property worth at least a million, better a few million, to make it worthwhile.  The red tape is extensive. Not worth it for a sub million dollar property.  And you do not need to reside in PR to take advantage of the TOURISM tax credits.  If the project qualifies, there are some additional tax breaks on the income and sales tax. It is a steep hill and takes a couple years.  

Thank you.  I'll reach out to you directly.

Hi Joseph, thank you for posting your response. I have lived in Puerto Rico since 2020 and I have invested in fix & flips, bed & breakfasts (2), a hotel, a triplex, a villa, a commercial complex and a large land development. And in all of those, there was no bank involved in a single one. There was 1 commercial lender involved in the hotel and I would never ever use them again. Ever. Next level predatory. There was a short time in 2022 that DSCR loans were available to investors in PR. And there are some commercial lenders for larger seasoned projects. But there is virtually nothing for a fix and flip type borrower or a BRRR method borrower.

So if you are ligit a lender for that product, especially for the sub 100K properties, which post private lenders don't even want to bother with - I would love to connect. We have lots of hungry investors wanting to do deals here but capital is an issue. And there are good reasons. Cost of securing the collateral is much more expensive here and foreclosures can be troublesome. There are only 3 major banks on the island. There are logistical reasons whey other lenders aren't here including the recording process, Puerto Rico's bond rating and lack of MLS / Comps. Standard homeowner type mortgages are common. Single person fix and flip investor loans are not so common.

What sort of loan products do you have available in Puerto Rico?  Thanks! 

Hi Eric, We have some contractors in our 500+ REIA Rico whatapp. Are you located in PR? Are you near San Juan? We have a lot of resources you might find handy.