Real estate investing in Tulum

Hi,

I have been in Akumal for 2.5 years. I do think Tulum is ripe for smart investors.
I spoke with this guy, and he was very helpful.

Ed Noriego
+52 (984) 267 24 49
https://www.facebook.com/the.eduardo.Noriega

My guess is NO to mortgages. Most developers here find private financiers to back mortgages they give.... or have enough money/power to get local banks to finance.

Unfortunately, I don't have the cash to invest myself (unless it's small), but am very interested in opportunities down here. I'd love to chat, if you're up for it.

Larry

Oops.... let me clarify.
If you want to buy a condo(s), those usually have some financing attached.
But if you want to buy land and build yourself, I believe you will have to finance it yourself.

But I'm just bloviating. Ed will know the whole story.

Our condo in Rosarito could be financed via the builder.  But they wanted a huge down, high interest, and short terms; so it wasn't really attractive.  It was better to put up a not so huge down now at pre-construction prices and get a pretty good discount on the total purchase price.

If you are intending to buy commercial/hotel property then you will have to incorporate.
Mexican bank financing for non Mexicans is next to impossible.  I would also beware on investing/buying properties that have not been already constructed.

Hello angela004, Greetings from The Riviera Maya.

I am a Mexican realtor and have lived in Playa del Carmen and Tulum for many years.

What you want to do, buying condos already built for vacation rentals or a hotel as a foreigner investor, it is something that it is not new and has already been done for several people, here in Riviera Maya and in some other attractive touristic areas of Mexico.

In the big picture, if one pays attention, more than half of the hotels and real estate in the touristic areas of Mexico are owned by non-Mexican investors.

So, the first answer is Yes, it is very possible, you can do it.

Secondly, regarding financing, it depends on the specific scenario. If the goal is to buy condos for vacation rentals, which forms part of a new development in preconstruction, there are only a few developers who offer direct financing for 5 years ( no longer time) at an interest rate that ranges from 5-7% annually, depending on the particular project and developer.

If you buy only one condo, you may buy it through the Fideicomiso (bank trust) and this is the usual and normal way.

However, if you buy more than one condo with the purpose to rent them for vacation rentals, then it is no longer considered that the property is for personal use and you will be in a business activity.

Therefore, you will need to incorporate a Mexican company allowed to have foreign investors as shareholders.

In this scenario, the Mexican company will be the buyer of the properties and it won't need to create a bank trust, as the title will be transferred to the Mexican Company as a deeded title.

Now, if the Mexican company is the buyer, for condos in preconstruction you may get the direct financing from developers who offer it or it could be that the Mexican Company applies for a Mexican Bank mortgage loan, assuming it has some kind of collateral that the bank deemed enough to guarantee the loan risk.

On the other hand, if you want to buy a hotel which is already built and operating, there could be two possible scenarios:

1. You acquire the existing Mexican company that owns the property and run the business;

2. You create a new Mexican Company and then it purchases the real estate property from the existing company.

If you want to buy a piece of land and develop your own hotel project, then the first step is to create a new Mexican company, then purchase the piece of land, then get the proper construction and operating licenses and permits, then find contractors and builders and develop your project accordingly.

This scenario will be the longer time frame to complete as you may guess.

Angela, please let me know if you have more questions and I would like to be helpful. I hope that I explained myself clearly enough.

Best regards!

Mexlend offers mortgages but high rates. Some developers will offer direct financing with decent rates, we are doing this in Yucatan state on the beach. Most important thing is to use a reputable Notario in the area.

when U get that together, please let me know.
I would like to short term rent in Tulum at some point.
thanks, Angela-
-Liz

***

I would suggest Angela that you consider another area. There has been an increased cartel, followed by the military presence in Tulum. Give them time to try to fix the problem. Tulum has a very high tourist volume given its size. That tends to dramatically increase risks.
There was a very recent very bad incident there.