Why Investors Are Looking South
Opportunity could exist in Mexico for your developer and investor clients
By Henry Haskell, president, KSI Capital Corp.
Traditionally, many U.S.
retirees move south. Often, they
do so to downsize their homes and
to enjoy retirement in leisure.
Along with the warmer climates, home
prices in areas such as Florida, Arizona
and southern states traditionally were attractive, and retirees’ often-fixed incomes
typically went further than they did in
the Northeast. In the past few years,
however, housing prices have stagnated
or have fallen in some areas. As a result,
home prices in popular U.S. retirement
areas are not the dramatic bargains they
once were.
In addition, new-home construction
and commercial development have slowed
dramatically in these areas. When you
consider increases in income and property
taxes, as well as other costs, many retirees
are left in a bind. To add salt to the wound,
many investments are paying only a fraction of what they once did, thus making
retirees’ nest eggs disappear much sooner
than anticipated.
Many, however, are finding opportunity
for warmer climates and more-affordable
housing elsewhere. They are looking south
of the U.S. border, primarily to Mexico.
U.S. mortgage professionals also can
take advantage of this southern migration. As more U.S. citizens retire to or buy
vacation homes in Mexico, more U.S. developers and investors are following suit.
Brokers who understand the
draws of Mexico and know
what to look for in lending
partners south of the border
can help clients wishing to
develop properties there.
commercial, retail and recreational projects are drawing interest.
In addition to U.S. retirees, residents of
Canada, Europe and China also are exploring Mexico. As a result, the area is attract-
In the United States right now, it’s more
difficult than ever for individuals and
businesses to get loans. When loans are
available, the process is more intense and
time-consuming than ever before.
The general trend among local Mexican banks, however —
even during the “boom” of
the recent past — was considerably more conservative and
cautious than U.S. banks, and
thus more difficult to close.
Some U.S. investors and
lenders saw this opportunity
coming. The first firms to get
involved in Mexican deals
found a market different than
the U.S. real estate scene.
Mexico was still a bit of a
“Wild West,” lacking many of
the legal, environmental and other standards to which U.S. developers are accustomed. Because of this, it’s critical for
brokers to partner with professionals who
are experienced in these areas and who
understand the ins and outs, as well as the
details and red tape that can cause deals
to get hung up.
In addition, beware of lenders touting empty promises — offering ridiculous
terms but never coming through. Look for
firms that have developed relationships
and added key staff specifically to address
issues in these markets.
Ask questions of these lenders, such as:
■ How long have they been involved in
the area?
■ Are their staffs fluent in Spanish?
■ Have they established a reputation for
streamlining the loan process and ultimately expediting deals?
Know-how and expertise cannot be
stressed enough. In addition to protecting
investors, working with experienced professionals also can expedite the loan process, allowing developers to take advantage
of time-sensitive deals.
Considering the current U.S. economic
situation, developers, retirees and others
still seek attractively priced real estate. As
many of them turn to Mexico, brokers who
understand that market can better help
their commercial developer and investor
clients who are looking south.
“Know-how and expertise cannot be
stressed enough. In addition to protecting
investors, working with experienced
professionals also can expedite the loan
process, allowing developers to take
advantage of time-sensitive deals.”
Who’s interested
Mexico is becoming an attractive destination for U.S.
retirees and others for many
reasons. Its warm climate,
affordable housing and reasonable cost of living are
key reasons.
Just as important, the region is developing rapidly and now offers many
of the infrastructure and service improvements that are spurring U.S. residents and others to consider the area
as more than just a vacation spot. This
trend has piqued the interest of developers looking to capitalize on the incoming crowds of financially stable U.S.
retirees. Besides housing developments,
ing interest from international investors
and developers, as well.
We’re still closing loans
up to 90%
All Types of Commercial
Properties Considered
Acquisition & Development
Business Loans with or
without Real Estate
Back-end Referral Fees Paid
Residential Brokers, take advantage of our Training and Commercial Lending tools.
We will make the conversation easy and extremely profitable!
90% Commercial Financing is Still Available
NATIONWIDE
Commercial Financial Group, LLC
Price appeal
While many traditional retirement destinations are dealing with an excess of inventory, more U.S.-led developments are
sprouting up. Newly constructed homes
often are available at affordable prices.
In some cases, beachfront homes can be
purchased for as little as $200,000. Think
of retirees’ options in that price range in
most U.S. communities, and you can see
the draw.
Some investors claim that prime property is priced at roughly one-third or less
of its value in the United States. For example, homes that would be more than
$750,000 in the United States are available for around $200,000. Of course, there
are pricier developments throughout
the region.
Prices have increased in resort areas
that already are popular vacation spots,
but excellent values still remain in towns
and villages just slightly off the beaten
path. San Felipe, for example, has become
a destination of choice for many. Similar
opportunities lie in towns like San Miguel
Allende, Puerto Penasco and more.
Many of the most-popular developments lie along the Mexican coastline,
though other, farther-inland options offer
more desert-like settings.
In many of these areas, you’ll find small
clusters of U.S. developments. These enclaves bring some comfort and familiarity
to this new setting and often lead to social
groups for those who choose to partake.
Local businesses cater to the new arrivals,
offering a wealth of goods and services
near these developments. And many —
if not most — of the local residents and
merchants speak English well enough to
conduct simple business.
Henry Haskell is president of KSI Capital Corp.,
a leading private-lending
firm known for making
unique and unconventional
loans with speed, honesty,
integrity and professional-
Call today | New Business Development: 877-340-2228
Training and Tools: 877-340-2228 ext. 201 | Email:
atomasi@ncfgcomm.com
tgoetz@ncfgcomm.com
bmuldoon@ncfgcomm.com dstoll@ncfgcomm.com
jtomasi@ncfgcomm.com atomasijr@ncfgcomm.com eric@ncfgcomm.com
Mastering the market
For commercial brokers interested in tapping the Mexico market, a question remains: What’s the financial situation in
the country? Are loans actually available
for developers and buyers?
ism to a broad range of borrowers across the
country and abroad. With more than 25 years’
experience, Haskell is one of the nation’s
foremost experts on creative lending. Fluent in
six languages, he has helped close hundreds
of multimillion-dollar deals around the world.
Reach him at henry@ksicapital.com. Visit
www.ksicapital.com.
