surebought - 12-14-2009 at 08:57 AM
Not every property in Mexico qualifies for a Bank Trust(Fideicomiso). Write this down in your Baja Note Book. Most people don't know this and assume
that when they finish paying for their Property, its just a formality applying for and receiving the Bank Trust. That isn't the way we do it. Nomads
don't have to be such risk takers.
Case in point. Near here, there are between 10 and 15 house on the ocean owned by various Americans for as long as I can remember. There are some
Federal Zone issues, but that is not why they can't get a Trust for their individual lots lying under their very expensive homes. None of them knows
why they can't get Trusts. Tensions ebb and flow. Periods of tension with the previous owner followed by periods of tranquility. Meanwhile nobody is
trying to dispossess them. Every once in a while I hear that a group of these owners have hired a Lawyer to dig into it. They give him a retainer
and 6 months later he stops returning their calls. This has happened more than a few times. They paid for their property and have written private
sales contracts for their lots and access.
It turns out that the previous owner is a friend of one of my wife's relatives and at party in San Diego, I got to talking to him. We have always
been friendly. So I ask him about this.
He's says that originally all those houses were built on leases to his mother. As time passed the leases ran out and the people wanted to buy their
lots so he sold them their lots with private sales contracts. Meanwhile the Toll road was built and cut this parcel into two pieces physically but
not with the paperwork. Nobody really knew this including him. On the other part of the parcel a huge subdivision was built and lots were sold and
built on until he got to the limit of the lots that could be sold out of that one parcel. So these people can't get Bank Trusts because they can't
divide their interest into individual lots with the permits that are needed to qualify for a Bank Trust, because the parcel has already been divided
as many times as it can be divided.
The good new is that they have never had to pay an origination fee or the annual fees for the Bank Trust. That's a large chunk of cash.
The bad news is that if they ever want to sell, they should disclose this problem and the new owner will have to except the same possession situation
that they themselves do.
Lesson #7 - Always get the Notario alone with an interpreter and ask right away before any money changes hands. Does this property as it is right
now with the paperwork it has and how it physically is, right now, qualify for a Bank Trust? Legally he is obligated to tell you the truth
If he says it DOES NOT qualify: here is my question. Would you have the discipline to push your emotions aside and walk away from the deal if this
were the case? For most people the answer, I am afraid, would be no.
Donjulio - 12-14-2009 at 09:42 AM
There are laws in Mexico (just like the US) in regards to subdividing property. Unfortunately nobody usually enforces them (in the beginning) and most
don't find out about them until its time to go to court or hire an attorney. There is a permit process that needs to happen and most don't follow it
because it is VERY expensive and they need the money from the sales in order to get the permits.
Now the problem with that logic is that they might not get the permits for one reason or another. But the uneducated (real estate and legalities in
Mexico) gringo will come along and they are wide open to getting screwed and sometimes it is intentional and a lot of times it isnt but it happens a
lot.
You have to find honest people down here that know what they are doing and yes there are some. If a development doesnt even have its F3 yet they
cannot offer it for sale. Even if they do they can't guarantee title until it is published at F4 or in a condo regime. If for some reason they don't
ever get the F4 you will not ever get title.
Once again surebought shares a sad story that has to do with LEASED land. Leased land and ejido land are great for RENTING! That is it. I don't care
what guarantees or promises someone gives you. Once your 10 year lease is up then it is the owner of the properties call as what happens...period.
Find an attorney (Mexican) that is honest (yes there are some) if you are going to buy property in Mexico and listen to what they tell you. It may
cost you $500 or 1000 more but it is better than losing a couple hundred thousand.
I had a guy come by one of the developments I was working. He didn't like it and wanted to be somewhere else. I told him to go see two of the real
estate agents here in San Felipe (only 3 here I trust) and I told him they were honest and some of the only ones that could be trusted. He did go and
see them. He went out and looked at some properties with them. Liked them, got a long great with them, then the next day ran into an agent from
another company (National Brand Name) and went out with him to see the "great deal he had". This guy is now waiting (2 years) for the title to a lot
that he paid $170,000 cash for. How was he to know? He didnt listen.
I "almost" hate the real estate business here. I have seen way too many folks lose their property or not be able to get title and the frustrations
they have. I have seen folks give $350,000 cash for condos that have never been finished. I have seen builders walk away with peoples life savings.
I have also seen some really happy and satisfied owners that have owned for years without any problems whatsoever. If you do want to buy here in
Mexico, take your time. HIRE AN ATTORNEY.
By the way. I am going to put in a plug here for Carmen Nunoz. She is an attorney in San Felipe that is as honest as the day is long. She is a
contract specialist and currently is working on her masters in international corporate law specializing in contracts. She is located on the second
floor of the plazita. She is a great attorney. If you are looking for property here in San Felipe (general real estate) then Darryl and Michelle at
Century 21 are great people and honest. John Pilato at Baja Ranch and Sea Real Estate is honest too. Great people to do business with in this area.
Anyway, don't be afraid of it. Just do your homework. And here is a little tip. Which being a real estate person I should not be giving out but.....
Right now the economy is so down here you can really get phenomenal deals on some properties. There are a lot that are still way over priced but there
are some deals to be had. BUT with that said, the rentals are lower than ever. If you are looking for a long term rental do not offer what they are
asking. The ones that are asking $800 a month are actually accepting $500. Course if you'll pay $800 they will take it.
Not my style of living but right now you can rent a two bedroom fully furnished condo on the golf course for $500. Owners originally thought they were
going to get $250 a night and now can't pay their maint fees or utilities so they are renting them to cover their costs. A lot of people that have
their homes on the market are now willing to rent them because they have been on the market so long and it isn't getting better anytime soon.
So tip for the day is rent...
surebought - 12-14-2009 at 11:23 AM
Bravo Don Julio, I concure with everything you said.
CaboRon - 12-14-2009 at 07:06 PM
I agree ...