Housing | Real Estate

Jim Beam and three of his buddies were drinking in a bar one night and had the brilliant idea of driving their quads across the border and setting up a business in Puerto Penasco renting them. So one Friday they drove across, parked their vehicles on the beach, and put up a sign saying, “Rentals $25/HOUR”. Business was a little slow at first, so two of them decide to take a ride down the beach. Unfortunately they had been drinking a lot of beer and were not very steady drivers. They rolled over the quads, putting both the vehicles and themselves out of commission. While they were being treated, Jim rented another quad to a guy on the beach, who took off and never came back. The fourth quad was confiscated because Jim and his friends had no corporation and hence no legal status to do business in Mexico. There are several attitudes that cause problems for Americans who are trying to do business or buy property in Mexico:

1. Party mentality. It should be possible to go on vacation in Puerto Penasco and make some money on the side. Not likely. Jim and his friends made the mistake of trying to mix vacation with business. This is an (only slightly) exaggerated situation, but I have met many, many Americans who seem to feel that they are on vacation as soon as they cross the border. This greatly hinders their ability to conduct any sort of business transaction.

2. Greed. Great bargains in Mexico can be picked up likes shells on the beach. Not true. They can be found, but it takes times and effort to make a sound investment. Larry and Rita Marino had rented a beachfront condo in Puerto Penasco for several years. They decide if they could buy one. The owner of the one next door happened to be there one weekend when they were and told them he’d like to sell. The price was right, and they agreed to buy it. Rita asked when they could meet with a notario to close the transaction. The owner said “Oh, we don’t have to do that. It cost too much. Just give me the money and I’ll have over the title. That’s how is done in Mexico. Three months later Larry and Rita Returned and found their condo occupied by another family who claimed to have bought it from the same owner. He had to return to the U.S and could not be located.

3. Ignorance. That’s the way it’s done in Mexico. Not if it’s done right. People who say this are usually trying to cut corners. Buyers should always check the details of proposed transactions or engage a reputable person to check for them. Larry and Rita gave money for the purchase of property to a complete stranger without an office or an established business. They allowed their greed to overcome their business sense and failed to follow proper procedure or even to find out what to proper procedure was.

Buying property in Mexico.

If you are an American or Canadian wanting to buy property in Mexico, here are some tips for you.

1. When you arrive in Mexico, turn off your vacation attitude and turn on your business brain. You will do better if you aren’t distracted by margaritas and fun.

2. When buying property, do it right. In Puerto Penasco foreign individuals can purchase residential property with a bank trust. A Mexican corporation can own property outright, but only for business purpose. These are the only two legal ways of doing it.

3. Get a professional real estate agent to represent you, preferably a member of the Puerto Penasco Association of Real Estate Agents.

Author: Steve Schwab