All Forum Posts by: Kathryn Morea

I've invested in a number of properties in Puerto Rico, mostly but on exclusively in San Juan.  Sometimes the contracts and especially the deeds are in Spanish.  Cap rates tend to be higher and using banks to finance is more difficult, so if you can raise private capital and pay cash, there's lots of money to be made.

Hi Edgar - I'd love to connect with you in Puerto Rico.  We have a huge project in Lares which would be a great eco-tourism play.  Maybe we can meet next Thursday at our meeting ?

Yes, there are some agents who know of wholesalers and have been in transactions. But most probably don't know what a wholesaler is.

Alexander,

There are some wholesalers in Puerto Rico.  Personally I've paid a wholesale fee for a property I bought and I've seen others in our real estate group pay wholesale fees.  Where did the wholesalers find the deals?  Word of mouth, uber, clasificados, networking, bandit signs (in Spanish).  The deals were not found using zillow, text campaigns, door knocking, expired listings or any of those wholesaling tools used in the mainland.  Being bilingual is a huge super power here.  We have buyers in our group.  People are always looking for deals.  

Celso -

Thank you for your service!  What a beautiful story.  I'm also in Puerto Rico and also an agent as well as an investor in Puerto Rico.  I hope we run into each other!

Yes, classificados, facebook marketplace, point2homes - those are all good places to find opportunities.   Also word of mouth and in the group and our whatsapp chat.  

I haven't had to do an eviction but it I've seen others do evictions and it seems very easy compared to California where I'm from. 3 weeks?  People say it is tenant friendly, but I find it much more landlord friendly than Cali :-) lol.

Jose,

I would suggest you look for a partner to go in on you in that deal.  You can also look to your family and friends for a loan.  You can even make a purchase with a loan from a friend or partner and have that loan drafted into the deed as a mortgage (more complex and costly than in mainland but still possible) and providing protection/collateral for your lender.  Many banks, even in the mainland, won't lend on properties under 100K, it's too small for them.  I know other investors in the group that like small deals like this, if you are in the San Juan area, you are welcome to come to a meeting. 

Puerto Rico offers a 40% tax credit for tourism projects. The smallest of these would be a bed & breakfast that can be as little as 3 rooms. (3-5 rooms total) Host must live on site, and breakfast must be provided. There are many other requirements, but it seems like in theory you could use your VA loan to buy a 4 unit building, live in 1 unit, STR the other 3 and receive a Puerto Rico tax credit (which can be sold to high income earners for between 70 to 83 cents on the dollar) for your purchase, rehab and 1st years operating costs.

It is a lot of paperwork and compliance. I got halfway through it once (then sold the 4plex) and am halfway through it a 2nd time on a more expensive building. If I had to do it again, I would personally not do this much work for a 4 plex, I would do it on a bigger hotel project. But you are limited with your VA loan to 4 units or less. So in theory, I think this is possible. I do know several active military members here who have used their VA loans to buy 4 units and they are doing STR very successfully. They are not using the tax incentives. If you do down this route, it is critical to meet with Tourism *before* your purchase. And this is not legal advice, lots to explore on your own if you do this.

Hi Ian,

Welcome, I moved from California to Puerto Rico in 2020. I invest in Puerto Rico and Central Florida. I do long term rentals and STR / Hospitality. Thank you for your service!