US State Department Recognizes Safety of La Paz and South Baja

For the First Time, New Travel Notices for Mexico Specifically Separate La Paz and Other Regions, Confirming It as One of the Safest Cities in North America

La Paz

LA PAZ, Baja California Sur, Mexico– In a significant move that recognizes the safety of La Paz and Baja California Sur, the U.S. State Department’s latest 2012 travel update states no security concerns for the region. For the first time, the regular update includes “no advisory” in effect for La Paz and the entire South Baja region. The move reaffirms the reputation of La Paz as the city of peace and abundance on the Sea of Cortez, and one of the safest places in the world to live in and visit.

“We applaud the U.S. State Department for recognizing what every visitor to La Paz experiences here: That it is a beautiful, peaceful city, and – along with the entire South Baja region – it is an entirely secure and rewarding place for vacations, for owning a second home, or for retirement,” said Agustin Olachea, President of La Paz Tourism Board, and spokesperson for the La Paz Developers Tourism Council. “Travelers can feel confident coming here, knowing that the peace that one quietly encounters in La Paz extends directly from the abundant ocean life and cultural richness that sets La Paz apart from any place on the planet.”

The report marks the first time that the State Department has broken down its Mexico travel update into specific populated areas and regions. According to an unnamed State Department source, the “granularized” report was compiled at the request of American business groups interested in employee security. It was not done to appease various boosters of Mexican tourism. Previous to this report, the US State Department’s Bureau of Consular Affairs issued travel warnings to larger, more general areas for Americans visiting Mexico. The result was confusion, with some tourists curtailing plans for visiting Mexico in spite of huge areas of the country unaffected by recent drug-related violence.

The safety of Baja Sur in particular was also underscored by the presence of U.S. Secretary of State Hillary Clinton and other international leaders at last month’s G20 Foreign Ministers Summit in Los Cabos.

Lot size 65′ x 170′.  Irreplaceable location in the heart of Los Barriles, with an unobstructed view of the Sea of Cortez, one lot off a beautiful white sand beach on a one lane road.  Secluded, quiet, serene neighborhood.  Close to restaurants and shopping  makes this an ideal location. Has been developed as an RV Park with 3 large sites with water, electricity and septic all in place.  Surrounded by 6ft. fence with two steel gates for the utmost security.  Mature landscaping including palm, lime and mango trees and easily watered by a drip irrigation system.  Use while you rent or lease out other spaces. This property could easily be converted into a trophy residential property.  There is nothing else like this available.

Offered at $299,000. USD.

For more information or to search the Los Cabos, East Cape MLS visit us at www.CaboRealty.com.

or,

from the US or Canada, call Gary Field at 206 219 7159 or local Mexican cell 624 122 0373.

Price Reduction!  Compare!!

Own 28 meters of white sand beach front at Rancho Leonero, the
legendary gated East Cape fishing & vacation resort!  1,400M2 lot
located next to a true $$million celebrity home.  Only$549,000usd!

The renowned  Rancho Leonero resort is located just 42 miles from the Los Cabos airport. A short one hour drive.

“I love this place; it’s old Baja,” said Lance Alworth, the pro football Hall of Famer and wide receiver for the San Diego Chargers back in the ’60s. “This is how Cabo used to be.”

Alworth has owned a condo in Cabo San Lucas since 1980. “For years, I’d run into John Ireland on the plane coming down here. He’d always invite me to drop by,” said Alworth.

“When I finally did visit, I fell in love,” Alworth said. “It’s a fabulous spot — and nobody knows it’s here.”

Alworth was so smitten by The Ranch’s old Baja feel that he and his wife, Laura, purchased a lot a few hundred yards down the beach and built a house on the spot.

See the photo below to see Alworth’s home from the beach. Beach front lot featured in this posting is the next lot south of this home.

For more information regarding Rancho Leonero beach front lot go to  WWW.CaboRealty.com or simply click on photos to the right and see Feature Listings.

To contact me directly, click on Contact Us tab at the top of the blog or call direct to CaboRealty in Los Cabos  from the United States or Canada @ 206 347-3325. Local cell number in Los Cabos is 624 122 0373.

Gary Field, Associate

CABOREALTY

Would you purchase property in your hometown, which is not registered in the local public registry, or land title office? Would you hand a complete stranger, without an office or established business, a check for perhaps hundreds of thousands of dollars to pay for a property? The obvious answer to these questions is, OF COURSE NOT.

Then why do so many foreigners do this very thing when they purchase property in Mexico? Many do not take the time to investigate how Mexico’s real estate transactions function and how the supporting legal system has responded to that industry’s needs. It is essential that you have an idea of how this system works and what to expect when considering an investment in Mexico.

MEXICO REAL ESTATE LAW AND HOW IT RELATES
TO FOREIGN INVESTMENT

Article 27 of the Mexican Constitution regulates the ownership of its territory by establishing that “….in a zone of 100 km. (62 miles) along any border or 50 km. (31 miles) along the coast, foreign entities cannot acquire direct ownership of the land and waters”. Until recently, foreign investors were allowed ownership of real-estate only outside of the “Restricted Zone”.

Recognizing the demand by foreign interests for ownership of real property, and the importance of making these desirable properties available to foreigners for the potential positive impact on the economy, the Mexican government implemented a series of Foreign Investment Laws begun in 1973, Modified in 1989 and modified again in December of 1993 to incorporate the provisions of the NAFTA treaty.

Creation of the Land Trust (FIDEICOMISO)

For those who wish to acquire property for residential usage, and who have a valid entry visa, current law requires that title to the property be transferred to a Mexican bank, as trustee, in the establishment of an individual land trust. The bank handles all of the paperwork including filing for all of the necessary permits with the Ministries of the Interior and Foreign Affairs. In general, the bank has the responsibility to the government to ensure precise fulfillment of the Trust agreement, assuming full technical, legal, and administrative supervision in protecting the interests of the beneficiary (purchaser).

The bank owns the real property rights, and the beneficiary owns the personal  rights to use, rent, modify or transfer his rights to a third party. Ownership of these personal rights is evidenced through a deed prepared by a Mexican Notary, signed by the representative of the trustee bank and duly registered with local authorities.

The Foreign Investment Law of 1989 stipulates a term of 50 years for the Trust with opportunity for multiple renewals, upon filing an application with the bank. By requesting renewals every 50 years, a property may be held by a family or business entity for generations.

Since by law Mexican banks enjoy government protection against bankruptcy, the Trust is indirectly guaranteed by the government. As a practical matter, even in unrestricted zones many foreigners prefer to hold their property in Trust.

NEVER ASSUME ANYTHING

A good understanding of the Trust issue can provide a second protection mechanism to the foreign buyer. In certain instances, the property to be purchased is located in a subdivision marketed to foreigners, for which the developer has an umbrella or Master Trust with a Mexican bank for the combined properties of the development. Many foreign investors believe it is beneficial to remain in the Master Trust, hoping to derive protection through the developer’s influence in the industry and locally. We recommend the placement of the property in an Individual Trust for which the buyer is alone responsible. This “fresh” legal basis avoids any legal or financial complications in the event the developing company declares bankruptcy or is dissolved, and allows the buyer complete freedom to advance his property’s interest.

Remember, almost anybody can offer property for sale: abuses and misrepresentations are common. Mexico’s real estate industry is underdeveloped, with few licensing laws regulating real estate brokerage and sales. Again, it is always wise to remember, NEVER ASSUME ANYTHING!

PROTECTION OF THE PURCHASERS INTEREST

All real estate transactions are processed through the office of a “Notario”, a qualified government appointed lawyer who acts on behalf of the government to ensure the proper transfer of all real estate transactions. Among this official’s many important duties is registry with the appropriate government agencies of the deed for transfer of rights of the beneficiary. This is the single most important step in protecting a foreigners investment in Mexico, since it remains the ultimate proof if ownership if a property ever becomes a question.

The purchase/sale document, which includes either deed of rights, or transfer of rights of beneficiary in a property, is generally valid between the parties to a transaction. It most likely contains a description of the property, price to be paid to the seller and any special terms or conditions of the sale. IT WILL NOT, however, provide valid notice to third parties unless it is recorded in the Public Registry office of the municipality in which the property is located.

Until the buyer is formally named as a beneficiary in a public document before a Mexican Notary, title to the rights in the property remain with the last legally registered owner, which would be the seller. While the seller holds title to the property it is his asset; he may mortgage it or sell it again; it may be attached in satisfaction of a judgment; he may die without a will. In such a situation, there may not be any remedy for the purchaser who neglected to correctly register his deed – his interest, his investment may be lost.

To ensure proper registry of the property, an official appraisal of the property, notarized bank instructions, a property tax certificate, and no-liens certificate must be obtained. Sellers Capital Gains Tax and Buyer’s Acquisition Tax must be paid and the deed transferring rights to the buyer must be registered and stamped by both the tax office (Treasury) and the Public Registry. If this process is not completed the buyer is not fully protected.

Our firm is a general real estate partnership devoted to professionally representing our clients. We are able to show or arrange to show any investment opportunities that are currently available in Los Cabos. As members of Multi-List Los Cabos, we have at our disposal over 400 listings at any given time.

In the event we are unable to find a suitable property listed within the MLS system, we will be more than happy to arrange appointments and provide transportation for you to view any of the developments that have their own sales staff.  We are more than willing to spend all the time needed to make sure you find the investment that is “just right” for your individual needs. All we ask for in return, is the privilege of representing you exclusively in this endeavor.

If you are seriously interested in our beautiful area, or just have a few questions, please do not hesitate to call on us. We never put any pressure on anyone. We are here to help!

If you are happy with the way you are treated please recommend us to your friends and acquaintances. We feel that satisfied clients are the best friends we can have.

Please feel free to sit down and discuss the various options, so we are able to get a feeling for your personal wants and desires. If at all possible, we will find a property that will satisfy your needs, as well as providing you with an excellent investment that will appreciate with time.

Property values in Los Cabos held steady during the recent recession in the U.S. and have begun to rise again. Los Cabos will soon be the “golf capital” of Mexico. Property values will start to reflect this exciting part of the growth of Los Cabos very soon. Of course the beaches and overall natural beauty of the area combined with the almost perfect climate and what most experts consider to be the worlds greatest sport fishing, all play a major role in determining property values here.

QUESTIONS AND ANSWERS

Q: I’ve always heard that foreigners can’t buy coastal property in Mexico, is that true?

No. While it was once true, times have changed. Prior to 1973, foreigners were not allowed to hold legal title or exercise direct rights to real property in an area within 64 miles of Mexico’s borders and 32 miles of its coasts. But laws passed in 1973 and1993 have made it possible for foreigners, foreign firms and Mexican firms with foreign participation to acquire interests in coastal real estate through a bank trust (Fideicomiso).

Q: Who is involved in this bank trust?

Three parties. The seller of the property is the Trustor. The bank is the Trustee. (Fiduciario), and the buyer, or Beneficiary (Fideicomisario).

Q: How does the trust function?

Title to the property is transferred to a trust with a Mexican bank acting as Trustee. The Trust Agreement is formalized by the issuance of a permit from the Mexican Ministry of Foreign Affairs. The lot or home buyer is designated as Beneficiary in the Trust and the beneficiary rights are recorded in the public record by a Notary Public.

Q: What are my rights as a buyer?

The trust is a legal substitute for fee simple ownership, but in this case, the Trustee is the legal holder of the property. As Beneficiary, you have the right to sell your property without restriction. You may also transfer your rights to a third party, or pass it on to named heirs.

Q: Is the trust renewable?

Yes. According to the Foreign Investment Law passed in 1993, trusts can be renewed for an indefinite number of successive 50 year periods. In effect they run in perpetuity.

Q: If at a later date, I decide to sell my property can anyone buy it?

Yes. If the buyer is also a foreigner, you simply assign beneficial rights. If the new buyer is a Mexican National, you can instruct the bank to endorse the title in favor of the buyer.

Q: If the buyers is a foreigner, is his interest limited to the balance of my 50 year trust?

No. Upon application, a foreigner automatically receives his own renewal 50 year permit. This, however, is not mandatory.

Q: Do many foreigners currently own coastal property in Mexico?

Yes. Today thousands of foreign owners enjoy their ocean side resort property; many have benefited from the appreciation of their property.

Courtesy CaboRealty.com

(Special thanks to Marco Ehrenberg for writing much of this article)

By Mitch Creekmore, CIPS, TRC
twiter @MexicoMitch

“6,000,000 retired Americans will live in Mexico by 2025. That equates to an increase of 4,000,000 retirees over the next 14 years.”

Recent headlines in U.S. newspapers and news agencies like CBS/AP and CNN have published articles about the Mexican government’s success in recent captures of notorious drug cartel leaders. Two of the most noteworthy arrests have come in just the last month. The head of the La Familia drug cartel, Jose de Jesus Mendez Vargas, aka “El Chango”, was arrested in the central state of Aguascalientes without incident. Of greater national interest both in Mexico and in the United States was the capture and arrest of Jesus Enrique Rejón Aguilar, known as “El Mamito”, the Zetas cartel founder and leader who was connected with the killing of U.S. Immigration and Customs Enforcement Agent, Jaime Zapata, on February 14, 2011. According to Mexico’s federal police anti-drug division chief, Ramon E. Pequeño, the arrest of Rejón is “a triumph for the Mexican government. El Mamito’s capture is emblematic because he was one of the original Zetas.”

The initiative that Mexican President Felipe Calderon established during his administration to eradicate narco-violence at the highest levels in the cartels has not waned. It has, infact, gained momentum with greater success as evidenced by multiple arrests during 2010 and 2011. These arrests should be of significant news to North American tourists, retirees and second home buyers. Mexico continues to be plagued by negative publicity in the U.S. and the perception by many that it is a dangerous country. This perception is simply not correct. Mexico must continue to increase reporting of successes in the fight against cartel narcoviolence. Americans, likewise, need to know where the sporadic border violence occurs and the fact that it is limited to specific geographic locations that do not impact touristic destinations or retirement and second home haunts.

According to the U.S. Department of State in a recent press release on April 22, 2011:
“There is no evidence that U.S. tourists have been targeted by criminal elements due to their citizenship… Millions of U.S. citizens safely visit Mexico each year, including more than 150,000 who cross the border every day for study, tourism or business, and at least one million U.S. citizens who live in Mexico… Resort areas and tourist destinations in Mexico generally do not see the levels of drug-related violence and crime reported in the border region and in areas along major trafficking routes.”

President Calderon and his administration have even gone so far as to declare 2011 the “Year of Tourism”. Mexico’s tourism agency SECTUR reported the international tourism income as $11.9B in 2010 with an expected increase in touristic revenues for 2011. 22.6M tourists came to Mexico in 2010, according to the World Chamber Congress 2011. They also forecasted Mexican GDP at 4.8% growth for 2011 as compared with 5.2% in 2010. That is two percentage points higher than the U.S. forecast for 2011. The International Retirement Foundation has said that Mexico is still the number one retirement destination for North Americans. The foundation also predicted that 6,000,000 retired Americans will live in Mexico by 2025. That equates to an increase of 4,000,000 retirees over the next 14 years.

Frontera NorteSur reported that the American Association of Retired Persons’ number one retirement destination for 2010 was Puerto Vallarta once again. It would not be hard to imagine that PV will again be number one in 2011. Canadian citizens are the predominant buyers in Puerto Vallarta, accounting for approximately 50% of its real estate transactions. The same can also be said for the Los Cabos market as well as San Miguel de Allende. Arrivals into Mexico from Canada increased 22% in 2010 as reported by Mexico’s Ministry of Tourism. It is a blessing that the resort residential markets in Mexico have gotten this surge in sales activity from our neighbors to the north given that Americans, for the great majority, are still sitting on their wallets, waiting to see what transpires with the U.S. economy.

Mexican residential prices have continued to decline in 2011. This has created a wonderful buying opportunity for those who have the disposable income to take advantage of the lower prices. There appears to be a “bottoming out” in values in the various markets that will continue over the next few months. Distressed sales activity still leads the way with residential prices being down 30-50% from 2008 values. Most markets are experiencing 10-15 closed transactions per month. There does not appear to be a significant increase in closings per month, but there are certainly a number of “back and forth” contract negotiations occurring in all of the markets. Purchasers know this is a buyer’s time to purchase and will negotiate to the bitter end trying to obtain the lowest price a seller is willing to accept. A bright spot in the market has been the number of Mexican bank-financed transactions that are being consummated. Both BBVA Compass/LNB and Scotia Bank have offered competitive mortgage products for both American and Canadian borrowers at reasonable interest rates. Mortgage brokers have seen an increase in their business opportunities for mortgage financed transactions in recent months.

Distressed property sales and lower prices have reduced new residential construction, generally speaking. It is difficult to build a project that can compete with existing inventory, coupled with the number of properties available, unless the new construction price points are in line with existing values in any given market. This scenario is not likely to change over the next 12-18 months. However, if a project can be offered at $200K-$500K for new construction, its sales activity may be brisk. There have been a few new developments in the Puerto Vallarta market, for example, that are experiencing good sales activity as a result of pricing their units in this range. It should be noted that conversion of an existing, unfinished building could be an ideal development opportunity for a retirement, independent or active living project. If the International Retirement Foundation is correct in their estimate of 4,000,000 additional retirees in Mexico by 2025, developers and investors should be looking at this opportunity and what exists in the market for conversion. The “boomer” generation will be looking for retirement locales outside the U.S., but only if they’re in an affordable price range, as a fixed retirement income will dictate how they can live and what they can buy. The vast majority of boomers will be in pursuit of destinations that offer a comfortable lifestyle with good healthcare, development and cultural amenities, safety, security and airlift capacity. Many Mexico cities will offer exactly what North American retirees and second home buyers are looking for. For all these reasons and many more, Mexico is a market that is “half full”!

With only a slight shift of focus, and a relatively minor short term sacrifice of lifestyle, the same property you bought for vacationing or future retirement can become a first step towards lifelong income from solid real estate investments.

As a buyer you usually choose your vacation or retirement property based on comfort, convenience, proximity to the beach, shopping, a lake, attractions, activities and fellow expat residents. These same features are attractive to vacationers and other renters; Mexico’s large tourism industry offers many small groups of vacationers and even long term renters. As an owner of vacation/retirement property in Mexico you can consider the following possibilities:

Rent out the property to vacationers. This takes effort. One developer once pointed out that you could have the best hotel in the world, and it would sit there empty if it didn’t have a clear plan for active promotion. Property management companies can help; but you should do your homework, investigate occupancy rates in their area, and evaluate the results from the company. Personal promotion can work if you have access to a network of people with a need to rent a vacation property. Internet social networks and promotion can also be useful. Good rental agencies will use these tools as well. The real estate office through which you bought the property may also offer rental services, and if not should be able to recommend good rental agencies, or even promote the property informally to future clients visiting to make their own purchase.

Use the property only during the low season. If you have decided to take this step towards making your property a real investment, put investment at #1 in importance. This doesn’t mean you have to stop enjoying the property for personal use, but it does mean that you should use plan your use of the property during the regular low season, when the property may be empty anyway. If you are truly dedicated, you may even consider changing plans if a renter turns up. One couple who successfully carried out this kind of plan stayed in moderately price hotels for their own visits rather than jeopardizing their rentals. Remember that any happy renter is a potential returning renter.

Rent out the property long term. Mexico also has a healthy market for long term rentals. While the monthly rate is usually lower, the income is consistent year round, and usually requires less effort to constantly find a new stream of renters. This idea has also proven successful in actual practice in places like Los Cabos.

Buy another property. Once you’ve established a steady income from your first property, invest in another, and follow the same process. If you are renting out your properties for vacationers, then owning multiple properties will also give you more options for personal use during off-seasons.

Buy through a mortgage. Acquiring Mexico property through a mortgage directly in Mexico is becoming easier and more common. Using a mortgage directly from a Mexican bank also allows you to leverage the same property you are buying, rather than a property back home. This way you don’t have to wait to generate enough cash from your first property to step into the second. This can help to speed up the process.

Cover monthly payments and expenses rental income. Real life examples have shown that is possible to generate sufficient income from a rental property in Mexico, either for vacationers or long-term, to cover all expenses, such as utilities, repairs and taxes, as well as the monthly loan payments if careful planning is done.Your first property will give you an indication of how much income can be generated and how much is available for use after other expenses. Speaking with mortgage specialist, or even some real estate brokers, will help to gain an estimate of the monthly payments. Some easy math will show you if its possible. If the numbers don’t look like the work out, try tweaking your first rental project to see if you can bring the income up to the necessary level.

Of course, these moves aren’t carried out overnight, but the final result will be that you are the owner of several high-quality vacation properties. One very important plus is that it isn’t necessary to start on a large budget; lower budget properties will generally bring a lower income, but the same concept can be applied with successfully.

Once more than two have been acquired, one can be mostly or even entirely dedicated to personal enjoyment. When retirement arrives, one property will become a retirement property, and the others will continue to provide a constant income substantially boosting financial resources. Since the cost of living is considerably lower in Mexico, especially in large expense areas like health care, using one of the properties for retirement is an ideal move; the funds will go considerably further in Mexico.

Consider changing your Mexico property into a lifelong investment.

Written by Thomas Lloyd

Published in NuWire Investor May 16^th, 2011

News headlines reporting drug-related violence in Mexico have caused people to question safety and security in Mexico by default. To provide some perspective, listed here are six reasons which demonstrate that Mexico’s drug-related issues, although real and in need of addressing by governments, do not make Mexico wholly unsafe, nor do they foretell a collapse of the Mexican State.

Visitor numbers are rising:

The Bank of Mexico is responsible for collating and publishing foreign visitor statistics. Earlier this year, the figures showed that over 22 million foreign visitors arrived in Mexico in 2010—a rise on 2009′s figures and one of the highest recorded numbers since these records began. Despite the swine-flu of 2009, the global economic crisis, and the drug-violence, people keep coming to Mexico.  Statistics from foreign consulate records show that the overwhelming majority of visits to Mexico are trouble-free.

Mexico’s economy grew at 5.5% in 2010.

Industrialized nations turn green with envy just thinking of Mexico’s economic growth rate. Years of sound economic governance, shrewd investment, and relatively low debt (public and private) have created an attractive environment for investors and foreign companies. Furthermore, Mexico is now one of the world’s few ‘trillion dollar’ economies, and mature nations are today falling over themselves to work with Mexico—if you don’t believe this, look up how many foreign trade missions have been taking place here in the last couple of years, led by top politicians and ministers of the respective countries vying for a piece of Mexican pie.

No expat exodus.

In decades past, when Mexico’s economy was less certain and less stable, foreign expats would often flee home in the event of a peso crisis.  Today, even with the drug-related violence playing out, no such exodus is taking place and, furthermore, interest in relocations toMexico is rising. Mexico’s government is fully expecting its expat communities to grow over the coming decade and beyond, and has been working to facilitate this process, as the financial and cultural benefits it brings are significant. If Mexico is a wholly dangerous place to be, why are existing expats staying put and inquiries for relocations to Mexico increasing?

Most people remain unaffected by the drug-related violence.

Recent figures published by the Mexican government showed that most of the homicides in the country over the last few years have comprised of gang members killing other gang members. Tourists, business visitors, and foreign expats are not being affected by the drug-gangs, and statistics show that the overwhelming majority of visits to Mexico pass by trouble-free.

Mexico matters:

The neighbor to the south of the U.S. is one of the world’s most important nations—poised to play a major role in world affairs during the 21st century. Its shared land border with the States is a primary reason why drug lords want control of the overland trade routes into seemingly insatiable U.S. narcotic markets, where the illegal substances they peddle are readily available to those who seek them. For these reasons and others, the matter will not be resolved by Mexico alone, but by Mexico and the U.S. working in partnership.
Mexico’s underlying story is strong and getting stronger.

Notwithstanding the current drug-related violence, the country’s macro economics are in good shape;

Mexico has substantial oil and gas reserves as well as considerable mineral and precious metal wealth; foreign visitors keep coming back to visit despite the unsavory news headlines; foreign governments are actively courting trade and commerce with Mexico; expats living here are going about their lives normally; statistics continue to show that Mexico’s levels of general crime and violence continue to be lower than those of most large U.S. cities; foreign expats we talk with say that they feel safer here in Mexico than they do in their home country.

Special thanks to Visit Mexico, Published 5/02/2011