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 US Real Estate Investors Heading to Mexico During Downturn in US Housing Market
By Doug Jones
With the slowdown occurring in the US housing market, there are two trends you can expect to see. The first trend I believe is there will be more, not less, investing in Mexican real estate. Savvy investors who like real estate in their portfolios are finding the Mexico real estate market for the first time, and they realize this is a safe place to invest with excellent returns surpassing what they can find in the US. It is close to home and easy to manage.
After 9/11 occurred, this is when the Mexican real estate market started to take off. There were few if any good investment avenues to put money into in the United States, and this was when the first (and continuing) wave of investors started coming south to Mexico. Although the current stock market is doing well, we will see a lot of first-time investors and investors looking for second purchases in Mexico as they like the security and appreciation in the Mexican real estate market. The US market hasn't seen a lowering of prices enough to be enticing to investors looking to pick up a "good deal."
The other trend I think you will see is that many US mortgage brokers and even US real estate agents will be looking to Mexico as the place to do business as the US housing market continues to sour. What this means is that you are going to have many "part-time" mortgage brokers looking to do business in Mexico from their offices within the US. For the most part, they have no clue on what it takes to put mortgage loans together in Mexico, and this is already causing problems in an infant mortgage market in Mexico. Inexperienced loan brokers are losing loan transactions that should be approved and closed, and it is causing some agents to feel like financing just isn't working in Mexico.
The key is to work with an experienced loan broker who has a regular on-the-ground presence in Mexico. It is important not only to learn the mortgage business in Mexico, but also the way of doing business in general in the Mexican culture. This can only happen with being in Mexico on a regular basis and developing the contacts and relationships necessary to consummate a successful loan transaction. There will also be more real estate agents in the US trying to figure out how to get a "piece of the action" in Mexico and may be looking for local Mexican real estate agents to create partnerships with. Again, since they are not able to be "on-the-ground" in Mexico, they will be looking to align themselves with someone who is. The bottom line is that the Mexican real estate market will continue to flourish, and in order to take advantage of this, be sure you deal with experienced real estate and lending professionals doing business on-the-ground in Mexico. Loan brokers and real estate agents are not licensed in Mexico, so do your homework and ask for referrals to, and references from, the people you engage to help you with your Mexican real estate quest.
Doug Jones is the founder of MortgagesInMexico. With 30 years lending experience, he has become one of the foremost experts in Mexico mortgage financing being one of the first to bring US-style lending to the market. Doug lives in the Vallarta area but has offices throughout Mexico, serving the entire country.
For more information contact
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918-398-9588 (US) 555-350-6331 (MX) or visit website at http://www.MortgagesInMexico.com
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