Mexico Real Estate Investment – How Can I Find a Top Real Estate Deal?

While being able to predict 100% which market (anywhere in any investment) will grow is virtually impossible, in Mexico real estate, it is possible to find excellent real estate deals in healthy markets; this means that you as a buyer can be fairly confident the property they just bought can have substantial margin for growth.

There are two main approaches to take; one is to buy preconstruction condominiums during the discount period – an excellent option, dealt with in detail elsewhere.  The other is to find “fire sales” or drastic price reductions resulting from pressure on the buyer to sell quickly, which is the kind of opportunity we will examine here.

Motivation

In most market areas, Mexico properties retain and appreciate in value healthily; with a given amount of time, a seller will be able to find a buyer for whom both property and price are ideal.  However, in some cases sellers have personal motivations to sell quickly and don’t have the time to wait and sell their property closer to the actual value.  Perhaps they have already moved with their family, and the second property is just a maintenance expense; they have less need to gain a return from the property in resale than to sell it quickly and move on with their lives.  Similar cases can be true for a developer’s unit when the developer is moving on to a new project, and he has already gained what he needs financially from that property.  Other owners may have urgent financial pressures back home.  In all these cases, sellers will tend to list on the lower end of “normal” and even make subsequent large price reductions if the sale doesn’t move quickly.

A Healthy Market

In a healthy market the majority of properties will be listed at “normal” prices.  Significant price reduction may show up regularly, but will disappear quickly.  (Some notable investment experts, like Jim Cramer, will even suggest buying “out of favor” real estate in Mexico, simply because of the country’s growing strength in tourism, and emerging economic strength.)  In general though, it works better for most buyers to have a way of tracking the best price reductions in moving markets.

Where to Look

Online resources, such as TOPMexicoRealEstate.com’s Top real estate deals page, allow you as a buyer to be notified when new price reductions show up.  This tool in particular is excellent for keeping on the ball with e-mail notifications, tracking new price reductions and comparing  similar properties.

Making an Offer

If you see a listing with the word “urgent” or a similar idea tagged onto it – like the majority in the TOP Real Estate Deals page – it’s a good indication that the owner is more interested in selling quickly than getting the exact price they are asking.  If it’s the first listing price, or a modest reduction on the listing price, make an offer; the seller may take the offer to sell quickly rather than waiting it out.  On the other hand, if it’s already the 2nd price reduction at 35% below the original price, another buyer may beat you to the punch if you are still trying to bring the price down.

Like in any real estate purchase, it’s important to balance waiting (for the lowest price and ensuring that the property is right for you) and moving quickly enough, to make sure you get that ideal property.  While you’re waiting for the right deal to show up, take some time and review “normal” prices of the kind of property that you’re interested in, and talk to an agent to get a feel for what price will make for an over-night sale. Also know what your ideal price is.  When the right property shows up at that price, it may be better to move and pay a little more than the “bottomed out” price than loosing your dream home in Mexico to another buyer.

Thomas Lloyd graduated from Purdue University Krannert School of Management with a degree in Management/Financial Option Investments. He has been living, investing, and working professionally in Mexico for over 15 years. In the summer of 2009, he received the first federally applied Mexico Real Estate Degree and Mexico Professional Real Estate License S.E.P. #5978657. He is the current president of TOPmexicorealestate, you can contact him at (512) 879-6546 or through the company’s web site www.TOPmexicorealestate.com NETWORK

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