cabo beach sunset

Owning Real Estate in Los Cabos

 

You can own property in Mexico and it is easier than you might think.  Mexico welcomes foreigners to own property, just as you would in Canada and the United States. In recent years over $13 Trillion USD has been invested in Los Cabos Real Estate.

Owning Real Estate in Los Cabos is like a dream come true. However, most properties in Los Cabos are purchased with a Cash Investment. The good news is that there are several creative options to take advantage of the Market when you find that perfect vacation home.  These options include Seller Financing (typically 50% down with short term financing amortized over 15 years at 6% with balloon payments due within 3-5 years), USA Self Directed IRA (Through Purchaser LLC – An LLC should be set up, the bank account to be in the name of the LLC and the IRA set up with the trust company), Purchaser Financing (Home Equity Loan and Investment Account Loan), Developer Financing on select properties, and Conventional Long-term Financing for qualified Buyers at an average of 14% interest with a peso loan.

Land ownership has a long history in Mexico dating all the way back to the 1500s. Understanding this history will go a long way in comprehending the country’s current regulations on foreign ownership of its valuable real estate. Today, foreign citizens must hold title to real estate assets in certain regions of Mexico along the coast and border through a bank-held trust, very similar to a living trust in the United States.

Foreign citizens who wish to purchase property within designated regions of Mexico are required to obtain a “Fideicomiso,” which is a Property Trust.  The way it works is the Mexican Government issues a permit to a Mexican Bank of your choice, allowing the bank to act as the purchaser for the property. The bank acts as the “Trustee” for the Trust and you are the” Beneficiary” of the Trust. The Beneficiary rights are very similar to Living Wills or Estate Trusts in the U.S. A trustee takes instructions only from the Beneficiary of the trust (the foreign purchaser). The Beneficiary has the right to use, occupy and possess the property, including the right to build on it or otherwise improve it. The Beneficiary may also sell the rights and instruct the trustee to transfer title to a qualified owner.

The Broker and Owner of Oceanside Real Estate, Dennis Fleming, is an active MLS member, CONOCER Certified Real Estate Agent (Mexico), CRS Certified Residential Specialist, an Associate member of A.M.P.I. (Mexican Association of Real Estate Professionals).