In my years of working in Mexico, I have dealt and representated various real estate investors who have made returns of 35% – 50% on their Mexico ventures and several of these within 12 month time periods! The Mexico Real Estate industry is a new developing market with amazing potential. The segments leading the area for ROI include the preconstruction residential investments which can be quite a lucrative investment option for the real estate buyer…. if you come prepared.

Although not as commonly heard, there also exist stories of investors that have had to administer developer's non-detailed contracts, late deliveries and other complications that have eaten away the buyer's profits and returns. The buyer would be forced to learn quickly how to find additional assistance, and find solutions on his ownBut from such experiences, much knowledge was obtained which is then able to be applied to other future Mexican opportunities.

I have listed a few items below as a simple guide for your review during your Mexico Preconstruction Condo investment process.

Mexico Preconstruction Condo DOS…

1 Try to negotiate a payment plan based on construction progress and milestones. In Mexico, most contracts outline payment plans based on dates instead of progress.

2 Surround yourself with a good Mexico real estate investment team. Although it is not required by Mexican law to be trained, educated or certified to sell real estate in Mexico, you should be able to find top notch representation in various regions if you invest a little time into the research. Find professional agents with credentials, members of the AMPI organization, and agents with recommendations ( www.playacarmenproperty.com) Legal counsel is also a very important position to recruit for your Mexico Real Estate team. Your real estate agent should be able to give you a list of 2 or 3 top options of such lawyers.

3 Ensure that your reservation money is refundable. You the investor, along with your Mexican legal counsel, need a few days to study and analyze the proposed promissory contract. Most Mexico developers offer from 7 to 15 days to reserve a unit and will also offer the reservation check to be 100% refundable. Other developers, especially in a sellers market, encourage quick decisions and prefer to work with investors who have already qualified the region and project during the Mexico preconstruction condo sales phaseSuch developers may not allow for refunds.

4 Keep in close contact with the developer. Once you have signed the hard contract, many developers may have monthly progress reports or monthly mailers to keep in touch with their investors. Make sure you get on these distribution lists and keep yourself updated regularly.

5 If you have any custom changes or upgraded choices on materials for your condo, define and communicate these changes as soon as possible to your developer. This will give your developer ample time to include such improvements into the master plan and to incorporate into his overall construction schedule.

Mexico Preconstruction Condo DONT'S…

1 Don't Expect to have your trusted lawyer from your home country to be able to elaborate, review, and to give you the best counsel regarding Mexico Real Estate. Your home country lawyer can give you pointers and recommendations, but it is always highly recommended that you retain the services of local, regional, or a licensed Mexican representative. The laws in Mexico are quite different than the laws of Canada, USA and UK and even more so regarding Real Estate law. A legal representative from the area has a better chance to have first hand knowledge and know the history of all the regional players which can be very beneficial when dealing with the parties of the contract. Along with this fact, many of the activities include tasks required from the region which include for example, the collection of documents from the seller/developers offices, the retrieval of government documentation, and the coordination of signatures with the local notary offices.

2 Don't expect to find a large quantity of Mexico Preconstruction condo options that are pre-qualified for financing. The mortgage companies require various property and developer documentations. The most essential being that of the Mexico CONDO REGIME. (http://www.topmexicorealestate.com/faq.php). These documents cannot be produced by the developer until the project is near 90% or 95% into construction. If you are able to negotiate payment plans and time schedules based on the developer obtaining such documentation, then you may have a solution to finance your investment using the same Mexican property.

3 Don't forget to define commonly overlooked issues which can be of high conveniences once you are living in the condo such as the Parking situation and Hurricane Shutters. Define if your condo will be delivered with Air Conditioning units, with closet doors, with cabinets, with light fixtures, or with ceiling fans to name a few such overlooked items.

4 Don't expect to have your condo delivered turn-key ready or delivered exactly on the date as written on the time schedule. Stay in close contact with your developer to ensure that you are kept updated on the progress and advised of any delays of delivery. Even when the delivery date is confirmed, it may take 3 or 7 additional days to set up the utilities. (Gas, Electric, Water, TV)

5 Don't forget to ensure if your can reassign the property. This is most important if your investment strategy includes flipping. Most developers will protect internal competition, meaning, they will not allow investors to sell or put their condo units on the market for sale until the developer has sold out his original condo building supply 100%.

The above is a brief over view of the Mexico Preconstruction condo dos and don'ts. There are several items that were not discussed in this short article and we encourage you to learn more and contact us for any further question you may have.

Thomas Lloyd www.TOPmexicorealestate.com

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