MoXi CEO: Debunking Mexico Myths & Financing The Dream

SPEAKER

VIDEO TRANSCRIPT

Adam Carswell:

Hey guys, this is Adam Carswell. Today I am joined by Alex Koper. Alex is the president and CEO of MoXi (Global Mortgage) Group. He was born and raised in Santa Barbara, California, went to California Polytechnic University, and now lives in Montecito, California, which isn't far from his hometown. Also spent... This is the most significant part of the intro, spent some time in Mexico during that university in growth phase of his life. Also some vacations. Also a very impressive resume leading up to where he's at now, as I mentioned, as president and CEO of Global Mortgage Group. We're going to get into that here real quick. But first Alex, thank you for coming on the show. Do you have any opening remarks for our listeners?

Alex Koper:

Hey Adam, thank you. Really pleased to be here and appreciate you having me. I'm really excited to talk with you today a little bit about sort of what we do. I think a lot of people don't know we even exist. I think that's what I'm most excited and proud about discussing with you today.

Adam Carswell:

Guys, I'm very energized for this one. We got to give a big thank you to our a mutual friend, Fletcher Wheaton, who first introduced Alex and I. Actually Alex, I remember when we first connected and we hopped on the... I think we did hop on a Zoom call. And then we were both just like, "Wait, so how do I know you? How do you know me? How did we even end up here again?" Alex started telling me about what he does, and I'm like, "Yes. Okay. Yes. I remember." Fletcher, Wheaton, who's a good friend of both of ours is based out of Cabo San Lucas in Mexico, and does real estate there, mainly I'd say more on the commercial side with... Well, from getting to know Fletcher, he might be doing some residential projects, but also multifamily.

For anyone, I would just say, do a web search on Fletcher Wheaton, Cabo real estate. Check him out. But anyways, Fletcher was on another show, and he mentioned on the show that he was on something about financing for residential homes in Mexico. I was like, wow, as far as I know, if you want to buy property, not only in Mexico, but really anywhere else around the world right now with US Dollars, you're not really going to be able to find a mortgage or a loan anywhere. You got to buy it all cash. When I heard that someone was providing this opportunity for Americans, I was like, "Wait, what? That's a thing?" That's how he introduced me to Alex, and we connected the dots. That's a teaser for today. We're going to get more into the weeds here soon. But Alex, I mean kind of run us through... Again, you have a very impressive resume. Run us through your story, your background and what kind of inspired you to start going in this direction with MoXi (Global Mortgage) Group.

Alex Koper:

Awesome. Thanks. We'll do. I've been in the financial services industry for nearly my entire career. Just about 20 years. I've been in various different roles like in Global health investment management and mortgage originations. I love building teams of people and doing new things and solving sort of problems that exist or that come up. This is definitely one of them. I joined MoXi (Global Mortgage) in the middle of last year, in the middle of the pandemic, interestingly. I've worked for large global banks, like City Group and Bank of America and so forth, and had some incredible experiences. Interestingly, I'll back you up to even before that. I think you touched on it briefly in the intro. But when I was in high school, my dad signed me up for a study abroad program that was in San Miguel de Allende near Guanajuato in Mexico.

Granted... I'm dating myself here, but this was late nineties. Imagine when you're 16, going to a relatively remote town in Mexico. I don't even think there were paved streets at that time. Just for context sake, there was no iPhone, no directions, no Google Translate, none of that. Talk about language immersion and cultural immersion, it was amazing. Probably the best thing in my... One of the best things in my life next to meeting my wife and having my children. It really gave me an affinity for Mexican culture. I came back to the U.S. 16 years old, completely fluent in Spanish. Really an amazing experience. Fast forward, throughout my finance career, the opportunity to kind of couple what I've done in my career with my passion and affinity for Latin America and for Mexico and for culture and for really the amazing aspect of calling Mexico, home, at least part-time I was like, sign me up. I'm in.

Really excited about our discussion today, and also what I get to do every day. Sometimes it feels like work, but really often it doesn't. For probably the first time in my life I'm at that intersection of doing exactly what I love to do almost all day long. It's great.

Adam Carswell:

Thank you for the story. A lot of buzz words you just used there that already got me looking forward to the next chunk of our conversation. It is time. Alex, we are going to step into the next level chamber. All right, here we are. The topic of today's discussion is billions of dollars ready to deploy. That was a little bit of, I don't want to say click bait, I actually heard the phrase not too long ago, click food. Because it's click food because we actually got something nourishing for you here on the call. That's the click bait. Billions of dollars ready to deploy, you could say subtitle, in Mexico.

When I heard that... We got that actually that title from just before our discussion actually. It's compelling. I mean, could you just, based on that statement there, billions of dollars ready to deploy, what does that mean for you and the company? Because I think if we can start connecting you with the right people, that sounds like a very exciting time.

Alex Koper:

Absolutely. Let me back up and give some context and then we can connect it back to the billion [crosstalk].

Adam Carswell:

Because we actually didn't talk about Global Mortgage. I forgot. Go ahead. Thank you.

Alex Koper:

As you mentioned, I'm the president CEO of Global Mortgage Group. Global Mortgage was started in 2017, I believe initially to fill a pretty monumental gap in providing mortgage financing or providing financing secured by real estate in Mexico to U.S. citizens. As you mentioned, when you're buying property internationally, there are a couple of markets where some financial institutions, U.S based financial institutions will make loans. But typically those are private bank, high net worth, Ultra high net worth type institutions and not in Mexico. Really it was something that didn't exist previously. The firm was started in 2017, registered as a SFO.

Like I said, I could geek out on any [inaudible] But a SOFOM is a audited non-bank financial institution in Mexico, is how it's recognized. What that means for clients is that you... Our clients can rely on us to deliver consistently, and we are accountable to regulators for how we operate our business and how we behave as professionals in the marketplace. I think that's probably the easiest way to sum it up. SOFOM one of our five entities. The SOFOM was started... The team was assembled somewhat to create an origination business specifically to lend to U.S. citizens secured by property in Mexico. The initial test market was Los Cabos. Pretty successful overall test, if you will. From there our parent company, the Palisades Group, which is a private equity firm, headquartered in Austin, Texas, purchased Global Mortgage in the middle of 2019. Invested monumental sums of money across the board, not only in the purchase itself, but also in really doing deep due diligence and legal research on perfecting that lien, which I think is the critical linchpin to why we're successful and why people really appreciate what we do.

How can we perfect the lien against property in Mexico and thus price capital in a way that it's palatable for consumers, and really can change the game in the residential real estate market in Mexico, because there's a level of security to the investor in that note. I'm really proud of what the team historically, before I arrived, has been able to do to get us to this point. We can certainly zero in on any of those specifics there. But really when we pair the resources or the discretionary funds at the Palisades Group, which is one of our primary investors in Global Mortgage, as far as the loans that we originate. We pair that with the, on the ground demand, and then the great resources the global has.

And then probably the biggest asset we have is the incredible people on our team all across the United States and all across various parts of Mexico coming together on behalf of, or for benefit of our clients and our real estate partners. It's really like a dream. We are deploying that those billions of dollars in capital directly into Mexico. I think when we first started chatting before we got on here with your listeners, we were talking about groups of people that are trying to raise capital, and I'm like, "Well, gosh, I have the opposite problem. I've got all of this capital and I'm ready to deploy it, and it's the tune of billions of dollars." That's exactly what we're doing. I'm really excited about that.

Adam Carswell:

I really like the... I want to circle back to this one, but I just want to highlight how what you guys are doing right now is opening so many doors for what's possible really for all of central and south America. I think this is step number one. I mean, it could be you guys too, but I think once other company and individuals start observing how you guys are facilitating your business, we could start seeing a little bit of a migration from the States, which I know there's numbers showing who's coming your way, which is really interesting as well. Before we get into that though, this one cracks me up. Honestly, I almost don't even want to talk about it on the show because I think there's so much information, at least as far as we know out there on this, but we're going to hammer it home one more time. The question is, is Mexico safe?

I've had so many conversations with folks now. I mean, even one who is just the show, her interview's going to be live here soon. She was like... I have clients from North America who have said, "Adam, my quality of life has gone up since moving to PBR or Cabo or, any of these markets that you've mentioned." It's kind of like, wait, what, there's still that stigma of is it safe? From at perspective, what are some of the FAQs that you're always getting hit with that we can just address upfront?

Alex Koper:

Great question. I get that one a lot. I think my entire team does. The answer is unequivocally and resoundingly, yes, very. For U.S. citizens that are listening to this, take a step back in your-

Adam Carswell:

Real quick, because you just mentioned, you've been going to Mexico since you were in high school too. So you can really speak to this. Sorry. Continue.

Alex Koper:

... I can speak to it. Not only from today's perspective because I spend probably half my time in Mexico with my team, but also historically speaking. But also I would say, think about what's happening in the United States and the perception of that. Sometimes when we're in it, we don't really notice trends from that perspective. From a safety standpoint, I get two specific questions. One is specific to real estate and owning property in Mexico. Is that safe and is that a safe place to park assets and is that a safe asset to purchase and to have in the family and pass it down and so forth? And then the second is really safety around COVID-19. To a lesser degree, I feel like once we're speaking with clients or industry partners, for the most part, people understand that Mexico is a very, very safe place from a crime perspective.

There are events that transpire in various parts of Mexico, just like there are events that transpire in the United States. But generally, and anecdotally, from my perspective, it's a heck of a lot safer, at least in the markets that we lend in than many parts of the U.S. right now. From a COVID perspective interestly single... I'm sharing this only because I think it's illustrative of the safety of Mexico in general. I think the Mexican government, federal state and municipalities do an incredible job with safety. From a COVID standpoint, there are actually laws around occupancy limits, around mask wearing, around temperature taking, around sanitization. As somebody that runs a business in Mexico, I can tell you it's taken very seriously in the enforcement or the auditing of businesses that cater to visitors or citizens or whomever is robust.

For example, there are audits done to make sure that in restaurants tables based appropriately. That if the capacity limited, a certain municipality is 50% in a hotel at the time, the hotels are required to abide by that. If it's then lowered to 30% based on various COVID threat levels, they're audited and it's enforced. We have to have touchless hand sanitizer, and is our shoe sanitizing pad thing in our front door? Is the solution filled, and so on and so forth. There's a lot of effort and energy put forth to creating a really safe space be it COVID, be it crime, be it, whatever. I think, the officials in Mexico, both at the federal state and, and local levels do an incredible job ensuring that that's the case.

Adam Carswell:

Thank you. Thanks for the details there. I want to definitely get this question in here too. I think personally speaking, my epiphany moment when I realized that living in countries are places outside of the U.S is not only one doable, but too much more safe than normally portrayed. I lived in Belize. I've kind of overcome that fear, but I'm wondering for, we'll just say, your average American, maybe that you've had conversations with, I just want to know what's the normal epiphany moment for someone when they go, "Oh my God, this actually could be something I want to do." I want to do this. Is there any type of moment that takes place with your clients where they finally kind of get it and they realize, I think I want to do this?

Alex Koper:

Yeah, absolutely. Thanks for bringing us back to the real estate aspect of this. I think when we talk to our clients or even our agent partners or our industry partners on both sides of the border, and we talk to them a little bit about... It's really relatively intuitive to understand. But I think people don't really... There's not a lot of information out there about how a foreigner, meaning U.S citizen could securely own property in a foreign country like Mexico. Once you explain it, and the Mexican constitution and restricted zones versus non-restricted zones, and you explain the level of detail that Global Mortgage has gone to to ensure that our warranty trust agreement, as an example, protects the buyer and the lender in [inaudible] when you take a second to walk through those basics, people are like, "Oh my gosh."

I think there are some folks that can figure out a way to pay cash for their real estate transaction that they're buying when they hear about the quality of the team at Global, and the legal research we've done and the documents that we've prepared that protect our client's interest in real property both in restricted zones in Mexico, which I'm happy to talk about in a moment, as well as unrestricted zones, I think we then go down the path of engaging in a conversation about, does it really make sense to deploy all of your cash or to clean out your investment account or to take second on your primary residents in the U.S. or to pull out a 401k loan and risk not capturing investment gain in that asset. Oftentimes the answer is, no. People really appreciate the level of quality, not only in our originations, in our documentation, but also in our internal closing team that works with our clients from end to end before they found a property all the way to the closing table.

Adam Carswell:

Awesome. Real quick, because we do got to start winding it down, but I have to follow up because you said restricted and unrestricted zoning. It sounds like an interesting topic. Can you give us a quick summary of what you're talking about there?

Alex Koper:

Absolutely. Mexican constitution originally says that foreigners cannot own property in Mexico in a restricted zone, which is within 50 kilometers of a coastline or a border. That's what's considered a restricted zone. Los Cabos is one such area, Punta Mita, Puerto Vallarta. If you look at San Miguel de Allende, my former home back in high school, it doesn't meet the criteria of within a certain number of kilometers of the border or a coastline, and so that is not a restricted zone as an example. The workaround is to use a fideicomiso or a trust, in our case, a warranty trust, which gives extra protection to the buyer to own that asset, so then you can securely do that. That's via an amendment to the constitution that was done some years ago. That's a quick high level there. There's a lot more detail.

Adam Carswell:

Sure. Sure. Enough to prove knowledgeable, and go deeper if you guys want to chat with Alex, which is my next question, before we, again, wind it down. If you had to give out one single best way for anyone listening right now to follow up and get in touch with you, what would that one way be?

Alex Koper:

I would say, look, I think it's important for your listeners to know what we're about. I think, I hope I've adequately covered it. But Global Mortgage is really focused on deploying capital and doing business in the right way. Generally I think a lot of businesses in Mexico do business in the right way. There are some from a financial perspective that are not registered and licensed both in Mexico and the United States, and so consequently, there's not a lot of protections for the consumer. Global Mortgage is really, to my knowledge, the only one that is making U.S dollar mortgages with no prepayment penalties, no adjustable interest rates. All of interest rates are fixed. Our term limits are very flexible, 10... Excuse me, 15, 20 or 25 year terms. No balloon payments. A lot of the foreigner financing you find in Mexico, either from developers or from other smaller mortgage originators have balloon payments, have foreign currency conversion fees, have all of these sort of unique nuances that are scary.

I think people make fun of me because I often say, and I think it's even in some of our marketing, that our mortgages are really boring. Honestly, they should be. If you are getting a mortgage that's not boring in the United States or in Mexico, but particularly in a foreign country, you should give us a call. Global Mortgage, mexico.com [email protected]. [inaudible] Those are great ways to reach us. We have an 866 number as well, incredible sales team on both sides of the border. We have, I don't know, 200... I think at last count it was 260 years of combined international lending experience on our team. Reach out to us and put that to work for you. I think that's well important for me to mention.

Adam Carswell:

Awesome. Thank you for doing so. Here we go. If you could give a shout out to one person you've never given a shout out to before, who would that be?

Alex Koper:

I am going to probably not go with a celebrity or a big public figure. I'm going to give a shout out to my daughter, Eloise, who just turned four this past weekend. So-

Adam Carswell:

Congratulations.

Alex Koper:

... I've definitely given her lots of shoutouts, but publicly on a podcast or on a Zoom meeting, definitely haven't shouted her out. Happy birthday, Eloise. There's my shoutout, Adam.

Adam Carswell:

Love it. Love it. Happy birthday, Eloise. Happy to have a new set of years as a listener for Dream Chasers now too.

Alex Koper:

Definitely. She and my son, also named Alex, I'm sure they'll be very excited to listen to our conversation and to your future episodes as well.

Adam Carswell:

Thank you. All right. Well you said, one more time, real quick, the website and email address.

Alex Koper:

Globalmortgagemexico.com, and then info [email protected]. Check us out. Get in touch with us. We do a lot of education with clients on an ongoing basis. It's part of what we do. I think the other thing I want to mention really quickly to your listeners that currently owned property in Mexico, we often forget to talk about this, but we do a lot of this business, so I want to just mention it along the lines of deploying billions of capital in Mexico. Because Global is so new to the market, there is a gap of at least a decade where there really wasn't reliable and transparent financing options for folks that bought property in Mexico. Many people, unfortunately, or fortunately robbed their 401ks, took money out of their investment accounts in the States, took out HELOCs, second, even third lien mortgages on property in the U.S. in order to buy that house in cash.

I think a lot of brokers and agents in Mexico that only see one side of that equation, they say, this is a cash buyer. In actuality, that buyer had to do a lot of maneuvering in order to pay cash for that property. That came at, in some cases, grave expense to other aspects of their financial lives. Where we help there is in two ways. For folks that have already bought property, maybe they got less than ideal financing or took developer financing that has a balloon payment, people... You should be able to enjoy your home in Mexico and not be nervous about that upcoming large balloon payment that you have to make. The other is for people that did pay cash. For both of those situations, we offer both a refinance product to take an existing lien and convert it into a fixed 15, 20 or 25 year loan repayment schedule.

We also offer cash-out refinance or a combination of those two things. We find, especially if you bought a couple of years ago in Los Cabos, as an example, Fletcher could attest, values have increased significantly. We'll use the appraised value and lend up to 60% of that, and provide it back in U.S. dollar cash. All of our loans are in U.S. dollars. We service them in U.S dollars. Payment, mailing addresses are in the U.S. I think people really appreciate that, and don't know that we help existing homeowners in Mexico.

Adam Carswell:

Awesome. Thank you. We wouldn't have known if you didn't say it. Again, thanks for catching me on the parts that I didn't know. Now I know. Alex, thank you so much again for investing your most valuable resource with us here today, your time. Again, any final words.

Alex Koper:

Hey Adam, I just want to say thank you. I love this community and I love how we were connected. I think it's really a testament to the amazing culture in Cabo as an example, but really across the country of Mexico and why it's so attractive to expats or U.S citizens that want to move. I love this. I love that we're connected in this way, that the two of us got on a Zoom call, I don't know, a month or two ago, and didn't even know why we were on it. Here we are friends and having this discussion about deploying billions in capital. I love it. I'm excited. I know one of your goals is to move to Cabo. I'm sure Fletcher is going to help you find a great place. But I'm really excited to have this connection and to have met you, and look forward to staying in touch and buying you a beer in Mexico when you're down there.

Adam Carswell:

Appreciate it. [foreign language].

Alex Koper:

[foreign language] Awesome.

Adam Carswell:

Awesome. All right, guys. Well, there you go. You heard it here first. I hope you take this one to the bank and run with it. Thank you for tuning into Dream Chasers, interviews with the future. We'll catch you in the next episode. Remember, in all you think, say, and do, take it to the next level.