All Forum Posts by: Mike Lambert

@Jesus Santoyo

I've been investing in Mexico since 2017 and shared my experience by replying to hundreds of posts in the BP forums.

A few points here:

1. Banks in one country won't finance a property in another country. Like many, you can use a HELOC in the US but, for an investor, that's the same as paying cash.

2. Your dual citizenship doesn't in theory give you any advantage when borrowing in Mexico. Like in the US, it's the residency and where your income is earned that matters.

3. You won't get financing for land.

4. I haven't worked with any of the two companies but that's because I've always had from developer financing and partners so I never needed it. However, I know a lot about it because I use to finance the Mexican banks as a banker and, since I put development projects together these days, I'm interested to know any new financing product available to the buyers.

Regarding the two links posted above, it's buyer beware:

a. I came across Yave but have never investigated them. I clicked on the link and their starting interest rate is 11.1%. I'm not sure you want to pay that.

b. As to the second one, they and others (not that long ago) used to advertise fixed-rate loans at 2.4% and 3.6% interest rates. The thing is the real rate was between 9 and 20% a year because of the structure of the loan, whereby the principal would actually increase over time but it wasn't mentioned in their marketing literature. I found out and checked with them that my answer was right and the answer was unashamedly "you're the first who found out!".

I have had so many people asking me for help re financing in Mexico that I'm studying whether there's a way I can get involved in that business to be able to help them.

Finally, something to bear in mind that the best deals in Mexico can be more profitable if you pay cash than a deal with a mortgage in the US. This is even more true today given the high level of US interest rates. Also, the price of a kind-like property is much lower.

Hi Leslie, there is an international section within the forum with posts from people like me who invest outside of the US in Europe and other continents.

Hey @Abraham Pereda, you're welcome. Thank you for thinking about me but I generally only buy prime properties in Mexico and, these days, I focus more on the Pacific Coast.

By the way, as I indicated, your questions were focusing on things that are unlikely to work but there are still things you can do. I didn't mention them because it would take a long reply so we might as well discuss that when you call.

@Abraham Pereda you're welcome.

Two things here:

1. A US bank won't lend to a business in Mexico, unless your US LLC has an established business in the US with a strong balance sheet that makes your LLC bankable regardless of the Mexican business.

2. You're basically asking for an unsecured line of credit, which you'd only get if you have an established business with a strong balance sheet in the US (and you already do business with the lender).

Add 1 and 2 and it sounds like mission impossible to me. The problem here is the risk for the lender and such a structure would make their risk even higher.

By the way, these days, interest rates in Mexico aren't that much lower than those in the US. Moreover, assuming that you could get the kind of loan you're talking about in the US, I suspect your interest rate won't be lower than the 10-12% in the US.

@Dan H., your tagging of me didn't work (I think you can't tag somebody that hasn't commented yet in the thread) but Abraham sent me a DM.

I'm still putting a brief answer here to benefit everybody else. Basically, the financing has to come from the country where the collateral is. So that would be Mexico, unless Abraham can give some collateral in the US or another country and get financing there.

@Henry Clark I can reassure you my account hasn't been hacked. One thing I've learned is that we can never been too diplomatic. This, especially considering that, for all of us that are here to genuinely help fellow (would-be) investors, what brings us together is bigger than what sets us apart. Also, different points of view and different objectives make for a healthy market (and an interesting discussion).

@Michael Baum thanks for thinking about me. I do know quite a bit about Belize because I looked at possibly of investing there and did a thorough due diligence a long time ago and I know quite a few people who have invested there. Since we had successfully invested close by in neighboring Mexico, it made sense to at lease have a look at it. After doing so, I decided not to invest, one of the easiest decisions of my investing life. Actually I'd never touch that country with a 10-foot pole unless somebody pays me to invest there. I explained why in detail in a reply to a post years ago on this very forum. This conclusion shouldn't have surprised me. Indeed, as a previous international banker covering the Americas ex-US and Canada, I was warned that merely suggesting that we might do something in Belize would get me fired. That wasn't surprising since the country's credit rating is B-, deep into junk territory.

After writing that reply, I decided to forever hold my peace on the topic in this forum (so you're making me make an exception ;-)). Indeed, I don't want to get into an argument with Henry Clark mainly because he invests there and I don't but also because I don't like being negative, wasting energy on arguing and I highly respect and appreciate Henry and his many contributions to this very forum. Also, people should draw their own conclusions, especially since not everybody has the same risk appetite.

Hi Jeffrey, horrendously expensive for what it is. Surcharge market They have issues with the cost of housing for locals. What’s your plan B if they ban or regulate STRs like they’ve done in other European capitals. Try the numbers with a LT rental but don’t hold your breath.

Hi Melissa, sure. I know that market very well but it would be easier to help you if you have more precise questions and also if we know what your objectives are. Feel free to DM me if you rather not share those publicly.

@Francisco Leal

To add to what @Erwin Groenendijk mentioned, we indeed know that squatters exist but the issue is indeed likely way overblown. Also, it generally exists only because some landlords keep their property empty or if long-term tenants become delinquent, don't pay and turn into squatters. Astute investors will make sure their properties are rented to the right tenants so this is a non-issue for most.

Anyway, I'd never invest in long-term rentals in Spain regardless since, as Erwin and I mentioned, there are much better alternatives in your country.

Also, if you're going to invest following the population pyramid, you can pretty much forget about Europe, North America, Japan or China and should probably focus on places like India. People should really pay attention to the kind of content they consume, especially the mostly negative and scary news that is oftentimes biased and ultimately leads people to not take action and miss out.