Mexican Real Estate: Trends, Relationships, and Opportunities for US Buyers

 

 

Video Transcript - (with Sean, Jason & Erika)

Jason:

Excellent. Well welcome everyone to our webinar. This is Mexican Real Estate Trends, Relationships, Opportunities for US Buyers. I'm Jason Riveiro. I have the privilege of leading our partnerships here at MoXi Global Mortgage, and I'm thrilled to be moderating a really insightful discussion today with two of my favorite people doing business in real estate in Mexico who bring different and unique perspectives to this booming Mexican market for foreign investors.

Last month we hit on the subject we had with us, Vanessa Fukunaga, who's one of the founders, the owners of Snell, Engel & Völkers. During that time, it was actually the day that the tariffs were announced and we're still having this conversation, but I think we will probably hit on that a little bit here. But I think overall, and I think that what we are really happy to present here in a very objective way is that how much Mexico is not only resilient to a lot of these things that are happening, especially the Mexican real estate and how the trend of the growth that we're going to see is going to continue to happen.

And so I'm happy to welcome Sean Gillespie, really innovative thinker in the space. It'd be interesting, I want everyone to hear his background, but fairly new to I think this conversation, but also quickly became an authority on this space using social media and now some of the platforms that he's launching. And then Erika Villegas, who I have the privilege of working with as part of my involvement with the National Association of Hispanic Real Estate Professionals in the United States. And then she's very heavily involved not only within her affiliated network of RE/MAX, but also leading the Chicago Association of Realtors there, our board of Realtors as president. So welcome both of you.

Erika:

Thank you for having us.

Sean:

Thank you, Jason.

Erika:

It's an honor to be with you, Jason, you know how much I respect you. And then Sean, as I mentioned earlier, as you mentioned Jason, right? Sean is newer in this space, but you don't know how many times I've gotten clients, "Have you seen this guy on Instagram and the videos he's shooting, and how about this and how about that?" I'm like, "Well, who is this, Sean?" And now I'm here today. So thank you for the opportunity as well to be sharing.

Sean:

Thank you.

Jason:

Well, thank you. And I want to give some time for each of you, and maybe that's probably a great segue. Sean, why don't I just start with you since Erika teed that off, but tell us a little bit about yourself and how you got involved in real estate and specifically pushing and promoting the opportunities with Mexican real estate.

Sean:

So for me, basically I've been an entrepreneur my whole life. I had a manufacturing company in the US where we manufactured protein powders, creatine, that kind of stuff, and then basically got a divorce and moved to Mexico and my ex decided that she wanted to run the company. So I basically let her run the company and then I was like, "Okay, now what do I go do? This thing I've been building for the last 15 years is gone." And it was like the whole universe was opening up and talking to me and it was like, "You know what? Just start showing people what Mexico's like, start showing people what it's like to live there." And that naturally progressed into me working with some realtors and showing some properties. And one of the things that was very evident upfront was that there was no MLS system.

And so in the US we had a Zillow and pretty much all the searches done for real estate in the US are done by Zillow or on Zillow. There's absolutely nothing like that in Mexico. So basically I sat down with a few people that were very savvy, one in particular was very savvy in the AI industry and said, "Hey, can we go build an AI version of an MLS?" And he said, "Absolutely." So we've been working on that for the last year and I've been basically involved heavily in moving to Mexico or investing in Mexico. And so this just seemed like a natural progression with the artificial intelligence generated MLS that we're doing.

Jason:

Excellent. Well, we're excited to hear more about Boingo.ai and what you've developed there. Erika, how about yourself? I know I gave a little bit of a preview, but tell us about how you started really diving in. I mean, you have a full brokerage and it's a top producer in the Chicagoland area, so that I'm sure can be enough on its own, but you also provide, to do some cross-border transaction and work, right? Tell us about that.

Erika:

Yeah, so I mean I lived in Mexico for four or five years when I was a teenager, and I think that's where my love for Mexico came from. And so I've been a realtor, here in Chicago for 20 years and serving at different levels, my community, my real estate community. And so a couple of years ago we started to invest in Mexico, my husband and I. And I think that opened the Pandora box of opportunity. And knowing that I'm bilingual, that I have connections in Mexico, that I have a tons of friends that are also in this area. I think it was needed for me to get involved and to really learn and dive in into how real estate happens and works in Mexico because it's very different.

And so about three years ago I started spending more time in Mexico. I started spending about two to three months a year within that year, and then really just connecting with people, taking classes, talking to a notario público, talking to developers because I wanted to expand that part of my business because so many of my clients in Chicagoland were asking for that, "How do I buy a condo? How do I buy a second home? How do I plan for retirement?" I'm very big in building generational wealth that many of us didn't have growing up, but we want to build for our families, we want to build for our children. And so a lot of my clients started to ask, and so how do you solve a problem? You dive into the problem, you learn it, and then you bring that service to your clients.

Jason:

Well, speaking of that, what are you currently seeing? Because especially over the past couple of years, that's where I've seen you a little bit more active. What are those trends that are really attracting in your mind, those US buyers? We'll hit on this as well, but you have people that are of course your typical folks looking to vacation, but also I think I'll note that, and you've focused in on this as well, but also people that have this Mexican heritage, maybe they weren't born in Mexico, but they want to rekindle that connection. Tell us a little bit about the trends that you're seeing and why they're going to Mexico?

Erika:

I mean, I think I'm seeing three specific buyers in Mexico. You have someone like myself, second generation that has a little bit of extra income where I can put it into some sort of investment. And so you have that people that are between 35 and 50 maybe potentially where they're established, they're doing well and can invest and can have a second home potentially in Mexico. Then you have, and I call that the new American Mexican dream, right? El Nuevo sueño, Americano is to be able to have something back home because our parents, my grandparents had to leave everything to come and build a new life in Chicago in the US. And so my new American dream is to actually have a home in Mexico.

And then I have the clients that are retiring, they love Mexico. I always tell people when I make introductions and make meetings with clients, "If you don't love Mexico and if you don't love Mexican people, don't invest in Mexico, don't go buy a Mexican home." And so we have that client that is a little bit older, client retiring, and then you have our developers, our investors that purely want this as an investment and are just looking for either a return or a long-term investment. And so I think those are the three buyers that I get to work with from this side of the border.

Jason:

Excellent. I like the three, the breakdown. Sean, what are your thoughts on that from, you talk a lot about financial independence through Mexican investments. I think sometimes when people think of Mexico, they think maybe primarily in that space of vacation, but never almost in that same conversation of, "Yeah, maybe more also from an investment," and people are really getting into that. Tell us about what do you see as driving these financial motivation for US buyers in Mexico?

Sean:

Well, I mean unfortunately a lot of the stuff that drives it seems to be political. So no matter who's in office, you'll have people in the US wanting to come to Mexico just to turn off the political information that's going. And I'm of the belief that, and I've talked about this in videos, but I'm of the belief that the US dollar has got all the fundamental things that'll make it crash at some point in the future. So the fact that we got off the petrodollar, the fact that we got rid of the SWIFT system, we had a monopoly on the SWIFT system, which was transferring money, and we've gotten off the petrodollar. So those two things, in my opinion, from what I can see will crash the dollar in some point in the future. So I see a lot of people in the United States, they either didn't like Biden or they don't like Trump, and that's motivating a lot of them to try to look at other things.

I also see a lot of people just interested in just good investments. And then I also see a lot of younger people that have made a lot of money on crypto or they're digital nomads and they're programmers, they're making a couple hundred thousand dollars a year, they've got some extra money and they want to invest. So those are the three primary groups I see. And then when I look at Mexico and really all of Latin America, but especially Mexico, I looked at a PricewaterhouseCoopers study the other day that shows by 2050 they're projecting Mexico to have the seventh-largest economy in the world and to basically triple to quadruple their GDP during that time. At the same time, the US is going to drop from number one in the GDP world to number three, and China and India are going to have bigger economies than the United States.

So the US economy is definitely not going to be as dominant in the world as it is today, and I don't think there's any place on the planet you can live that's going to see the growth that Mexico's going to see over the next 25 years. And that may seem like a long time, and I'm getting older, so I may not see it all, but that'll happen much sooner I think, than what people think. It'll happen fast. So that's why I think it's a good... And not only that, with Mexican real estate, there's still a huge chunk of real estate. I don't know what the data is, but I would guess it's 70 to 80% of all properties are still paid for in cash. So you don't have these bubbles like you have in the US where people have financed in some cases 98% of their properties. So that's another [inaudible 00:11:56] working on property in Mexico.

Jason:

That's good. No, and that's good to talk through that. I think people probably have seen this and are very well aware of it, but it's good to revisit these kind of macroeconomic trends. You mentioned some of whether whatever the reason might be, we certainly know that COVID certainly played was a big impetus in terms of driving what we now know as digital nomads. But when you start thinking about the availability of working in a very close time zone as your American colleagues, that's huge. But then I think also, manufacturing and I think other companies have looked at this nearshore component where you can find some great talent now, especially in Mexico, in other parts of Latin America. I think that's certainly going to help also keep people within the country, stay within the country if they can find these kind of jobs that they can work remotely while maybe not make as much money as they would in the US, but comparatively from a cost of living standpoint, Mexico's so very attractive.

And so you talk about this real estate investment, you launched Boingo. Tell us about Boingo and what are some of the key points you're looking to drive for foreign buyers on your platform?

Sean:

Yeah, so it's Boingo.ai but it's basically it started out as a Zillow equivalent for Mexico is what we initially started to do. And now with the AI is accelerating at such a rapid pace that Boingo is becoming much bigger than that. But phase one of Boingo will be basically something very similar to Zillow, but for Mexico, and we can literally turn on any country in Mexico, so are in Latin... We turn on any country in the world basically in two hours. So we've went from being a projected Mexican Zillow, basically to now being the only basically true MLS system in Latin America, and we can literally turn on any country in two hours. So we plan on getting all of Mexico data in there by next Wednesday. I think right now we have about 24,000 listings. I think that puts us at the top with everybody. So if you compare the largest ones already, we're already there.

Plus we have another 40,000 in our database we're waiting to jump in. But that's primarily what it is it'll be like a Zillow type of interface, but it's an artificially intelligence generated MLS basically. But we're pulling in not only for sale properties, but the AI can recognize a difference between development properties and for sale properties. So we've got another category now for development properties. And then on the development side, there's a big issue in Mexico and there's a viral video going around right now about people getting ripped off in Tulum where when you invest in some of these pre-sales, if you don't do your due diligence, you may lose all your investment, which is happening frequently in Tulum. Because we can separate those out we're building in the certification processes very similar to what MoXi uses, so that when somebody wants to purchase a property within a development, we certify that development and if we don't certify the development, they haven't contacted us or they haven't passed or whatever, we put a big red badge on that listing.

So people coming into the site know, beware of this listing, not that it's bad, but it hasn't been checked out. So we're trying to solve that. Then we're also trying to get the largest database, both vacation rentals and long-term rentals in there. So we've got some creative affiliate programs going on for that. But what our model for Airbnb essentially is instead of paying us 15% of every booking, you pay us a flat rate of 30 bucks a month and you can get all the bookings you want. So we're not tapping into the investor's money. So one of the things I've heard repeatedly when I was is not only do we need a centralized database for all the properties, but I heard from a lot of investors that they hate Airbnb because it's taken 15% of all their bookings. So we're attempting to solve both of those.

Jason:

Excellent. We're excited to hear more about it-

Erika:

You're making everything better, Sean.

Sean:

What's that?

Erika:

You're making everything better. You're solving a problem in several areas, which is fantastic.

Sean:

Yeah, I think it'll be interesting because if we can get the lion's share of the for sales, the lion's shares of the development and get them certified, get the vacation rentals on there and have the best inventory for... Right now, if you want to rent a property in Mexico, your best source is Facebook Market and that's a horrible source. It's a horrible way to try to find rental properties. So we're trying to go after all of those opportunities and at the same time lower the risk for both renters and for buyers by having these certification programs. So it's interesting how AI is evolving it.

I would say that Boingo is now probably the world's leader and artificial intelligence as it relates to real estate because not only are we building the website, but there's a lot of other artificial intelligence we're doing. We're actually training bots right now as agents so when somebody is interested in a property, they'll never have to have a conversation with the realtor. We can literally clone the realtor, we could clone Erika, they think they're having conversations with Erika the whole time. We've trained the bot on our whole database of properties. We've trained the bot on immigration, moving, insurance, the whole thing, and then also train them on a lot of my videos. So Erika's agent or bot will be able to answer all the questions and then the first time Erika may see them if she's in Mexico is when she's showing them their property. So we're doing that kind of stuff and it's just the technology is advancing so fast it's almost hard to keep up with.

Jason:

Well, today it is a bot. This is actually Erika's bot in this-

Erika:

I'm really not here. This is my bot. I'm kidding.

Sean:

Oh, okay.

Jason:

Well, speaking of, I mean Sean mentioned a little bit about this kind of due diligence. I think I certainly want to hit on this topic to talk about some of those nuances within Mexican real estate. One of those areas I think it's very important in terms of the network and the relationships that you build, Erika, you are certainly out there very involved in organized real estate. So I mentioned the Chicago Board of Realtors, but also in these interactions of how you're promoting what's happening in Mexico, how important is that and how did you build your network of trusted individuals? I know it took you some time and learning along the way as you're saying referrals, it wasn't always great and the good and the bad. So can you talk us through that system that you built?

Erika:

Yeah, I did not work as fast as Sean. It was years of process. I am one of those people that if I go on vacation, it doesn't matter where I go on vacation, I work a little bit because I'm always building relationships and building connections. And so if I go to Mexico City, I'm having at least one or two lunches a week or coffee with people that are in real estate. I've connected with presidents of AMPI, which is a Asociación Mexicana de Profesionales Inmobiliarios, which is kind of their association of Mexican real estate professionals in Mexico. So I went to Mérida, I connected with the president there. I went to Cancun, I met with their president there. I've been to Zacatecas, met with their president there. Querétaro, everywhere I go, I always make the time to start making connections beforehand and building a database, a network of people, and then also come with value to that realtor, to that partner wherever I travel because I know that I have a lot to learn, but I also have a lot to give.

I live in Chicago where we have probably the second-largest Mexican community and so being that connector. And now I felt like I've grown it just a couple of days ago, one of my good friends, a realtor here said, "Erika, I need a realtor in Mexico City. Who do I connect to?" And I have a couple of people there. So I connected my trusted partner with that person in Mexico City and that has evolved. So I have a pretty long database. I have connections in about 25 states, so I'm getting there. In all states I have sold now properties in about 17 states. We have a new listing going up with a rematch referral partner in Guadalajara this week. We just partnered up with another developer in San Pancho as well. And so that connection continues to grow. And now what I've built is that other professional real estate...professionals from Mexico are coming to me as well, "Hey, I heard it from someone that you can help with, promote our developments in Chicago and the Chicago area."

And then within the US I've traveled to several states now to help start opening markets for some of the developers in different parts of the US as well. So I'm investing in building those relationships because I think that's how real estate works. It's all about the relationships, it's all about the connections that we make. And so if we have any partners from anywhere in Mexico, let me know when I can come visit you and learn about your development because I love traveling. And so I think that's where I'm fitting two things that I love: traveling and real estate coming, bringing them together to continue to serve my clients here in the area.

Jason:

Excellent. Well, let me pause for a second. We have a few questions I want to push out here before... We got a long list. A lot of folks saying hello from all over here in our comment section. So the first one, I don't know if either one of you can answer this, but the first question from Marivel Graham says, "Does AMPI have an app? I was on a Zoom call yesterday about their new AI bot on WhatsApp yesterday."

Erika:

I've only connected on their website. I've only done work on their website. I'm members of several of their locations, but I've only done work with them on their websites and taking classes in person when I've been in Mexico City.

Jason:

Next one is from John Ragland. I'm not sure, we can't speak to a specific property here. It talks about RETA purchases. But just I guess overall, I mean if purchases in Cabo and Playa del Carmen transfer to my heirs if I pass away, if I have them paid off or mortgaged? Thanks."

Erika:

Well, people would need to do a trust, right, to be able to transfer property.

Sean:

And I think this goes back to a lot of people don't think you can actually own properties. We get that a lot with the fideicomiso as people say, "Well, it's a fideicomiso, set it up for 50 years or 99 years or whatever." And then some people equate it to like a lease. So yeah, Erika is absolutely correct. It does transfer to your heirs, but you have to have a legal trust in Mexico so that they know how to handle the progression of your property when you do pass away. Otherwise, it could be tied up in courts for years. So, yeah.

Jason:

Absolutely.

Erika:

The same idea in the US. I tell people it works in many cases the same way in the US. If you want to have a trust in the US, you also want to have one of you own property anywhere in the world.

Jason:

And of course, always seek the guidance of a legal professional, which there are plenty of those in Mexico. And then I'm sure Sean or Erika could probably provide some good recommendations as well.

Next one, maybe this is more for you, Sean, but it just says they went on Boingo.ai just a minute ago. It shows only short-term rentals at this point. When is STR being added?

Sean:

We're going to be going live probably next Wednesday, so a week from this Wednesday. And we're bringing out an affiliate program to start bringing those in. So we'll start bringing them in next week hopefully. And then our model is basically 80% of the money we collect from the affiliate login for the first year goes back to the affiliates. We're trying to get that database as large as we can, as fast as we can. So it's not on yet. He's right. It's just long-term rentals right now. But we hope to turn that on next week. The affiliate program has already developed. We just have to turn it on. So hopefully then.

Jason:

And as one of our viewers pointed out as well, so have questions about mortgage there. So if you used a mortgage with MoXi, we set up that trust for you. It's all part of our, we're a one-stop shop from that closing standpoint. Let's go back to some of those nuances because I'd love to hear you address those head-on. One of the things I love about Sean's content is that he doesn't sugarcoat things. He's very honest. What you see is what you get. So I love working with people like that and he's very open and honest about just the experience and what he's seeing on the ground and working with people. So what are the most common questions or misconceptions you get about potentially investing in Mexico from folks in the United States?

Sean:

For me, I mean the biggest one is probably it's not safe, I think is probably the biggest misconception I get. And that's followed by, you can't own property in Mexico, followed by you can't get financing on property. So those are probably the three biggest questions. And I try to, it's hard to, I mean, it's really hard to look at data and show... Let's go to Tijuana, right? Tijuana has the second-highest murder rate in North America. It's only second to Memphis, but a lot of people don't realize that Memphis has a higher homicide rate than Tijuana, but 100% of the people that I've talked to that live in Tijuana that are also dual citizens so they can live in San Diego as well... I'm not talking half of them. I mean literally 100% of the people I talk to in Tijuana, one of the most dangerous cities in North America, 100% of them feel more safe in Tijuana than they do in San Diego.

And San Diego is one of the safest cities in the United States. So what the element that's missing, I think from when you look at the data, it's black and white. What you don't see in the data is the organization part of crime in Mexico, so Mexico does have a cartel. Everybody in the world's aware of that. And it's basically like the cartel has its own set of laws. If you follow those laws, they leave you alone. And so most of the crime that's happening is very organized and it's related to that cartel piece where people are not following law. So from my perspective, that's one of the biggest misconceptions of Mexico is it's dangerous. You're going to get kidnapped as soon as you get off the plane, that kind of stuff. And then the other piece around the fideicomiso being a lease, not being able to own it and then not being able to get financing. Those are the three misconceptions I see most often.

Erika:

Yes, all of those for sure. And we actually I think have a question, Jason, about the financing. And I know you guys offer the financing-

Jason:

Yeah, we have one from... Do US residents always have to pay cash? So the answer is no. To buy a piece of property in Mexico, is there financing at a reasonable rate? Yes. So we offer financing. We offer a US dollar based mortgage with minimal down payment so we can share more information, just visit our website on that. And then JR Bell, I think we know him. So if a buyer in the USA is Mexican and he can't go to Mexico to sign docs what are the procedures?

Erika:

You would do a power of attorney to someone that can't sign for you. In Mexico, we've had a couple of clients because of their status, they can't go, but they want to start building something to prepare if they ever go back. And so we can connect them with a notario público, which is like an attorney. I always tell people think of a notario público as a notary in the US, that's absolutely not the same level of professionalism. And so we would connect them to make sure they get all the paperwork in order so that a relative can sign for them for a transaction.

Jason:

And we asked the same thing for our buyers for power of attorney, because you never know sometimes with the dates, the closing dates, all of that. So we have a power of attorney that way they don't have to come down to do that. We represent them there at the closing. So.

Sean:

One more thing just to add kind of this, it's not really a misconception. It's a sticker shock at some point, but it's important for buyers to understand. But when you're looking at property in Mexico, the realtors will usually be very quick to point out that you don't pay 2 or 3% property taxes in Mexico, you pay like 0.1% taxes. So you pay a very, very low annual tax rate. What they typically don't point out is that when you actually buy a house, you have an additional 6 to 8% in closing costs that are related to buying that house and closing it. And so that does come as a sticker shock to people. And I like to point that out ahead of time so people know, "Okay, if I buy this house for 500,000, I've got another 30 to 40,000 in expenses that are coming off the closing costs."

So it's not really a misconception, but it's things that people don't necessarily know on the front end. And then I tell them, "If you finance it, you're probably looking at another 3% on top of that amount." So those are some things that I think is important.

Erika:

Sean-

Jason:

Sean, you have another question here from Chris. Can you share your contact on someone on your team? I'd like to add a listing/LT Rental? Do you want me to just put your Caribe Gringo up?

Sean:

Yeah, yeah, they can just contact me directly. Well, they can do either [email protected] or yeah, contact me through @CaribeGringo on Instagram or TikTok.

Jason:

I need yours too, to roll, Erika.

Erika:

I wanted to add patience. Patience with real estate in Mexico. I've been doing real estate in the US for 20 years and from start to finish, 30 days, 45 days because time is of the essence because we work in that market where just helping the client find a house and then we go on to the next one. And so Mexico, there is no time is of the essence. We just roll with it. I went under contract in my personal right before Christmas and then everyone was gone. Everyone was gone until I'm like, "After Christmas?" "No, after the Reyes Magos just January 7th." And then everyone still had to come back and sign contracts.

And so that is not because they don't care. It's not because people don't want to help you. It's not because people are not interested. It's just more relaxed and learning the ins and outs and setting expectations is really important because I think there's like, "Why don't they want to sell that property to me?" I'm like, "It's not that. They're on vacation for two weeks," or, "Semana Santa's coming up and they're on vacation for another two weeks." And so making sure that you have the right timeline and that you know the expectation that the real estate of Mexico just tends to go a little bit slower and that's okay.

Sean:

Yeah, that's a great point.

Jason:

That's right. Yeah, time and also, I think the other expectations are closing costs as well. When you talk about all these different things that you have to go through, not necessarily just from a financing, but even if it's just a cash transaction, there's things that you have to pay for along the way to make it if you want it done the right way. So I think that's certainly important. I think to wrap up this question in terms of some of the nuances is that certainly a lot of things are not required within the marketplace that you will see in the United States, but some of the things that we expect in the United States or have during our transactions are available. It's important that ask these questions. We talked about an attorney, we talked about in title and all those kind of things. Talk about some of those expectations and make sure that you have all your areas figured out, any loose ends in the transaction.

Erika:

Well, I mean I always tell people, "Ask questions, ask a lot of questions. Don't feel that... It's okay to say, 'I don't know, this is my first real estate transaction in Mexico.' Teach me, give me all the information." And there's never enough information, especially for someone that's just purchasing for the first time. The other thing is connect with someone that has been doing this for a little longer. When I first started doing some transactions in Mexico, I was connected with some of the people that have been doing real estate 30 years and 40 years and could sit me down and show me the process because it's different. It's not very different. It is different.

And then learning also the nuances of the words, fideicomiso, that's a new word for many people. They don't know what that is. It's a trust. And so really understanding that process to make sure that you're not missing any of the parts, making sure that you're connecting with an attorney or notario público as well, making sure that you are connected with a trusted professional that is registered, that is working with... That it has the credentials to make sure that you are taking the necessary steps, that you're making the right investment, as Sean mentioned earlier, right? It's so important to make sure that we're all working hard for our money and we want to make sure it's protected.

Sean:

And that's the other thing. I related to that, you said making sure you're working with a licensed, I think you said not all realtors in Mexico, depending on which states you go to have a licensing requirement. Quintana Roo in Baja and a lot of the other city or states, they do have licensing requirements, but people can still sell real estate without those licenses. So I would ask them to present their state's licensing card, not their certification. So in Mexico you have certifications which you would get through an AMPI or through La Salle University. There's different organizations that'll get you a certification that basically means you've been through a course. And then once you have that, you can apply to be a licensed realtor and you'll actually get a card from SEDETUS that basically shows you're a licensed realtor.

So I would try to check to see if in the states you're in, do you have licensing available? And if you do, then try to limit your real estate search with a licensed realtor, not just anybody, because literally people need to understand. Anybody can be a realtor in Mexico, I'm not a realtor, I'm basically a lead generator, but I could be a realtor right now if I wanted to. And there's nothing really to stop me.

Erika:

You can be a real estate professional, Sean, you can be a real estate professional because you got to be connected to the National Association of Realtors to be a realtor. So you can be a real estate professional.

Sean:

Okay, well in Mexico, they call them-

Erika:

Yes.

Sean:

But I'm just saying somebody could fly here from the United States that's never sold a property in their life and be considered a realtor here in Mexico or a professional real estate agent, I guess. So limit that or search for that. And then if you have a, the other thing that people don't realize is there's different types of titles in Mexico. So you have these titles that are called the Ejido titles, and a lot of people have Ejido properties and they try to sell them and they can't. And I know a woman in the United States, her husband's from Mexico, they just bought several hectares in the area and then they want to go build on it. And the first thing I asked her was, "What kind of title do you have?" And she checked and she had this Ejido title. So she can go build on it. That's fine. That is her property. She does have the Ejido title. It's just when she goes to build on it and people want to get their own titles, that's not going to happen until she can convert this property.

So I advise people, "When you have the property you want to buy, find an independent attorney and then use that attorney to recommend a good notary because if you just go by your realtor telling you which attorney to use, it's possible that that realtor is not recommending the best attorney that's got your best interest in mind." So I always say, "Go find your attorney independently. There's a lot of organizations out there you can check." And then usually if you find a good attorney, they'll recommend a good notary. And then with a good notary, you can guarantee that you're not going to get scammed on any type of title issues. But that's hugely important. And I'm sure, I mean you guys already have those that at MoXi, the notaries that you probably commonly work with. So it's kind of the same idea.

Jason:

I have one question here. I could probably take this, "Can closing cost be rolled into financing?" So yes, we do offer that for well-qualified buyers, so that's certainly something that we can look through if you talk to one of our mortgage advisors. Next one is from Marcos Rubio, "Do you need a working visa for Mexico to be a realtor," or a real estate professional rather?

Sean:

Not really.

Erika:

I'm a Mexican citizen, so I'm not 100% sure. I am a Mexican citizen and I have all my paperwork as a Mexican citizen as well in Mexico. So I'm not sure if you do need a visa. Maybe you do. Sean?

Sean:

Well, I mean to be a licensed realtor, you probably do, but like I said, most of the realtors, I mean in Quintana Roo for instance, we probably have 10,000 realtors just in the state of Quintana Roo, maybe 300 of them are licensed. So if you want to be among the 10,000 not among the 300, then absolutely you can do that. But if you want to be licensed, you're probably not going to be allowed to do that in most states.

Jason:

Yeah. So Erika, why don't you talk a little about this. I think we have a mix here of both professionals on both sides with our network, but also I know in the United States that NAR really just pushed state the certification on international property. Can you talk a little bit about that and maybe how working with some of the folks I know AMPI recognizes or is doing similar type of work?

Erika:

Yep. Yeah. NAR has great relationships with AMPI across Mexico, and one of the things that realtors can do in the US who just understand some of the nuances and the processes is getting their CIP as designation. I tell almost everyone, "It is a good starter because it's like getting your real estate license," right? It's just really information. You're not going to learn a lot of the things until you're actually doing the work and on the ground. So it gives you a good entry point to understand how things happen in different parts of the world, specifically for Mexico and Latin America, that I took some extra classes there because I wanted to understand before I continue to grow my business in Mexico, I wanted to understand. So CIP is a great way, and then AMPI offers sessions as well in English. And so if you want to start getting into real estate and start selling real estate in Mexico, take some classes from AMPI.

They also have conferences. You can attend conferences as well if you want to focus in a certain area, you can start traveling to the area and connecting with local people. But definitely look at your local association and AMPI in Mexico to get more involved and get educated so then you can provide the best service and for your clients really, because that's what you want to do. We still, as someone that is an independent contractor with several developers in Mexico, I still have to follow NAR guidelines because I'm still bind by my pledge to NAR and what we promote across the country here in the US.

Jason:

Excellent, thank you. Sean, let me go back to, you talked a little bit about some of those economic and political trends or just factors that drive people. You personally, you made a decision to relocate to Mexico. And so what specifics of the Mexican real estate market do you believe are really offering a brighter future for investors or buyers compared to what you're seeing in the US market right now?

Sean:

I think the biggest thing I'm seeing is I think, so I do a lot of research and that's one of the things it shocked me. One thing we didn't talk about is Mexico's unemployment right now is less than 3% and it's been less than 3% the entire time that I've been here. So all of these, every industry seems to be doing extremely well, but even the housing industry, when I look at the data from state to state, it's all between about 8 and 10% appreciation. So properties have been appreciating 8 to 10% for say the last four or five years. And I don't see that changing where in the United States you have, it's really like a crap shoot with real estate and I don't know, but I'm being told the real estate market in Florida and Texas right now are extremely volatile.

Property values are going down drastically. People are losing a lot of money. I just don't see that volatility in Mexico. Now there's a caveat to that where Tulum has been so overbuilt and they're still building more that I have given a severe caution for property in Tulum, it's the definition of a buyer's market right now in Tulum. So if people are going to buy in Tulum, then negotiate, negotiate, negotiate, because there's somewhere around 10,000 empty units ready to sell in Tulum alone. But that was just because there was so much hype generated around one specific area about how it's going to be the next Bali and everybody's going to go to Tulum and dah, dah, dah, dah. And it is someday, I think someday Tulum is going to be all of that. It's just it's not there yet. There's a lot of infrastructure left to build in and there's a lot of empty properties.

So in general though, even with what we have happening in Tulum, all of Quintana Roo is still appreciating at that 8 to 10% rate even with Tulum as part of that equation. So I would just say you have a lot more predictability in the markets here. And so if you're looking to invest, you don't have the risk of what's happening in Florida or Texas or some of these other states where you get too many people using too much financing and all of a sudden now you've got a big bubble and property values go down 30%. That's just not happening here in Mexico.

Jason:

Yeah, I think that's a good key to point out, which is maybe not right now, but eventually if you look at even Quintana Roo and even as you go further south, that's just going to continue to push, but the demand is going to continue to be there, especially as you said that infrastructure is being built and it's crazy now, Tulum, same thing, and Cancun, both of those airports are just really picking up a lot of speed and a lot of demand. So long-term for sure. And there are certain segments, I think like you said, probably they overbuilt in some of those areas, but I also find that people, especially on that higher end, the luxury and are really looking for this luxury that seems remote. They want all the amenities, but they want to feel as if they're in some sort of remote location, like the White Lotus situation. And it's true. It's like, "Oh, I'm in the jungle, there's nobody here, but I have all of the five star amenities that I could want."

And it's interesting to see that play out. So I have some more questions. I want to catch up to those. This is great, a lot of great engagement from our audience here. So I have one here. So this is a simple one, "Jason, can I buy a condo in Baja and not live in it, but travel to it?" We do not designate. So that's all based off of the rules of either the condominium that you're buying in, but we do not specify any of that within the financing of that property. So depends on where you buy here, but, "Can you speak to residency?" So this would be a good one, "Can you speak to residency in Mexico and how that would give us any advantage investing or living there?" So as opposed to not being a resident, buying, investing, what are some of those advantages? Can any of you answer that?

Erika:

You live there, Sean.

Sean:

Yeah, yeah, I can take that. So in buying a property, believe it or not, residency does not help you. Citizenship does because you get some tax savings when you sell the property if you're a citizen. But being a resident, permanent or temporary does not help you in buying a house. However, if you're going to get a loan on that house and you're not from the United States, so one of the things with MoXi is your loans are pretty much for people from the US. So if somebody from another country is in Mexico to get a loan, they may have to get residency to get that loan if they're getting it from a Mexican bank, which is typically what happens, and the interest rates are quite a bit higher, so you have that piece of it. The other piece of it we have that I'm seeing is it used to be standard practice for anybody from the United States to come into Mexico and customs would just stamp or immigration would just stamp a six month, 180 day visa stamp on them.

So you had 180 days of time to spend in Mexico before you had to leave and come back in. And a lot of people live in Mexico with just that visa because they're used to that 180 days and they're like, "Well, I'm going to go to the US every four or five months anyway," so that worked. But here recently, there's nothing written I don't think, that says they have to give you that 180 days. And here recently, several people are getting two and three week stamps at the airport and they're like, "No, no, I need 180 days." And they're like, "Nope, we're only doing three weeks."

So if you get residency and you want to live in Mexico, if you're going to live in Mexico, then I highly recommend residency. If you're not going to live here and you're just going to be a tourist, then you're probably okay even to buy property. But if you're going to finance through a Mexican bank or you're going to live down here, you have to have residency, plus you get a bank account. If you get residency, you can get a bank account here. If you don't have residency, you can't get a bank account. That's another big thing.

Jason:

Excellent. Thank you for that. We have a few minutes here. One of the last things because it's very common, a lot of US buyers tend to prefer buying in a new development type of situation and especially in a lot of these areas that we're working with on the coastal side. So any lift off, we're probably not going to be able to list them all, but I think some of the major ones, what are some red flags I would say for you, working with developers out there and make sure that you get what you want, I mean that you're doing? So for example, "Okay, it's in construction right now. They've asked me to put down some sort of down payment. What should I expect in that kind of situation?"

Erika:

Yeah, go ahead Sean.

Sean:

So if you want to buy into a development, typically understand that a lot of those salespeople you're talking to could be right out of the time-share industry. So you often have some high pressure type sales tactics going on there. The first thing they should do is they should ask you, they typically ask you for a deposit, which is normal. You can put it on your credit card. That typically gets you 30 days to move forward or not. So you can kind of say, "Yeah, I want to buy this unit. Here's my deposit." Make sure that deposit is refundable, and if they say it's not refundable, then don't put any money down. And then, they're going to give you a contract to sign. It's going to be in Spanish in all contracts here are done in Spanish. You need to take that contract to an attorney immediately and look for any kind of, not only on the contract, but you need to have the attorney do due diligence on the development.

So where we do a certification process and MoXi does a certification process, if you're buying into a development, you need to do that same or similar due diligence process. And every attorney has a little bit different method they do. I think the one we use is very complete. I know Jason, the one you do is very similar except you add title insurance to it. So I would say make sure you do that, but I don't know that I see a lot of scamminess on that part of it. What I do see is developers that once you do the due diligence, there's no way close that they're going to get certified because they don't have building permits, they don't have environmental permits, they don't have CFE permits, they don't have, in some cases they don't have title, they have Ejido title. So there's a lot of red flags that usually pop up at that phase of it.

But what most people that are buying these properties, they don't see an attorney first. And if they do see an attorney, it's only to look at the contract, not to look at the development. If you do that, you're playing roulette. You might win and you might lose, but you're not going to come out of that ahead every time. There's just a lot, even if a developer is trying to be honest, I don't know how many people realize the way my answer's not too long, but the majority of developments in Mexico, the model basically is the developer goes and buys a property, so they have the money to pay cash for the property, and now typically they're out of money. So then they have a little bit of money left to have the architect do renderings. So they buy the property, they do the renderings and all the images of the property, and then they take it to a realtor or realtors and they put it on the market, and they're trying to sell 50% of those units before they start construction.

And then once they have 50%, then they typically start construction. That's why a lot of them will say it's going to be done in three years. Even though it may only take a year to build it's because they're going to spend two years trying to pre-sell it to try to get to that 50% number. But a lot of things can happen along the way. They may never get to that 50% number, or we may have huge fluctuations in currency and it could completely wipe them out. So that's why you have to get an attorney to do the due diligence or only look at properties that MoXi has certified. In the case of developments or properties we've certified. Otherwise, you're playing a very dangerous game I think.

Erika:

I'll add to that, Sean. I think great points there. I'll add to it. Look at the longevity of the developer. There's developers, I work with developers that have been in the market 50 plus years and have toured the development itself and have gone to different cities to look at that. Can something fail potentially? Absolutely. Right? Because at the end of the day, there's no magic wand, but one of the things that I worked with developers that have been in the market for many years that have developed one of my developers in Zacatecas, Grupo Santa Rita, they have been around for 52 years. They've developed hundreds of little cities. And so, one of the things that looking at how sound they are, do they have all their paperwork in order with their city depending on where they're building to make sure that your investment is safe, hopefully.

Sean:

Yeah. Yeah, good point.

Jason:

Well, this is great. I'm sure there's so much more we could continue to talk on, and we've shared everybody's contact info. We're willing to help here. I know I can speak for both Erika and Sean. I think people, they're very generous with their advice and their time, so just reach out to them or ourselves and be happy to help you. Just as a final takeaway, Erika and Sean, could you give a final takeaway to our listeners about the conversations we had today? Anything you want to add? I'll start with you, Sean.

Sean:

Thanks. I would just say do your own research, and if you want to invest in Mexico, I always try to encourage people to spend time in Mexico, rent a house, rent a condo, but try to spend time in Mexico because you may think that because you go to vacation every year in Cancun, that Cancun is the greatest spot on earth, but in reality, you may think you may find Huatulco or Guadalajara or something, another place in Mexico, even better. So just research different parts of Mexico, see what stands out to you, and then spend some time renting and then you're going to make a very educated decision when it comes to buying.

Erika:

Yes, I'll add to that, as Sean said, he loves data and to do research, do your research, spend time at your favorite place, your favorite city, but then be open, be open-minded to other opportunities because I think people miss out when they are just thinking about, "I only want Cancun," when there are so many other beautiful places. For example, in the Cancun area. If you're looking in the middle of the city, I have people that say, "I want to be in San Miguel de Allende." Well, there's so many other wonderful cities in the middle of the country, and so be open to other opportunities because there's many wonderful places in Mexico.

So if you love Mexico, connect with one of us. We would love to help you make that transition, put a plan together. I think that I can call all of us professionals here, and then we want the best for our clients when we are working with them from far and from near as well. So thank you. Thank you as well, Jason for this opportunity. And Sean, it was great sharing this space with you.

Sean:

Yeah, it was great working with you too, Erika, and thank you, Jason.

Jason:

Of course. No, my pleasure. Thank you both for taking time out of your busy weeks, and like you said, a lot of people will be Semana Santa, so it might not be expecting some return emails, so give it some time if you're in Mexico. But no, it's been wonderful talking with all of you. We're going to come back next month and continue having these conversations with our audience, but please follow us on YouTube. You can see this on Facebook as well. We'll replay this as well for people to follow later on. Thank you everybody. Great to see you.