BUSINESS SECTION

By Patrick Osio, Jr.

August 29, 2005

 

Writing articles on Mexican real estate brings a lot of questions from readers. Since the Metro is the prime business magazine in the San Diego-Tijuana region, it stands to reason that a fair share of its readers are interested in both buying and investigating the potential for investing in Baja provided it’s safe. Readers demonstrate an understanding that risk is an inherent part of investment typically controlled by the laws of supply and demand that may drive upward or downward investments, profits or both.

 

But what is meant by “is it safe” has to do with Mexican laws, business climate, land and construction costs, land use designations, environmental requirements and all the other details that can facilitate or impede projects. This type of information is mainly asked by real estate developers who want to get into the action.

 

Those seeking to buy a second home, or a primary residence in Baja have a different set of questions, but they are also basically rooted in the “is it safe” concerns. This column has dedicated a number or articles in attempting to answer those concerns. As a bottom line, the answer is yes it is safe provided guidelines are followed – get an attorney (who will work with the Notario or is himself a Notario), make sure there is title insurance provided for the specific property being purchased, do not give an upfront deposit to an individual real estate agent/broker/developer, place funds with an “escrow” company that has fiduciary responsibilities (title company or bank), instruct that no funds are to be released until title to property has been transferred. And, what ever else your attorney deems necessary to protect your interest.  Far more people have purchased (through trust agreement) without problems than those who have had problems.

 

From Tijuana to Playas de Tijuana to the southern fringes of Rosarito there are no less than 11 housing and condo developments offered to US buyers. In Tijuana there is Medina Mediterranea, in Playas there are 4 developments, Residencial la Cuspide, Playas Diamante, Entorno la Perla, Cimas del Parque. Between Playas and Rosarito there are 5, Real del Mar with a great golf course, Brisas del Mar, The Residences, Residencial San Marino and Rancho del Mar, in Rosarito proper there is Mision de Rosarito, and numerous others along the coast highway to Ensenada.

 

For those wanting to learn more about these projects the good news is that the developers banded to create a 3 day trade show – “Investing in Baja’s Oceanfront” – 30 developers are participating showcasing their projects. In attendance will be title insurance companies, financial companies from both Mexico and the US specializing in credit financing for US citizens buying in Mexico, as well as real estate agents. The event runs from Friday, October 7 through Sunday, October 9 at the Rosarito Hotel in Rosarito.

 

Switching from the individual buyers to the potential investors there is also a conference that will bring together some of the most prominent names in Mexican real estate development from the US, Canada and Mexico. This particular two day event is sponsored by the Baja California Secretary of Tourism taking place on Thursday, October 6 and Friday, October 7 at the Gran Hotel de Tijuana in Tijuana (one of the two highest tower buildings in TJ).

 

The objective of this program is to introduce the possibilities of investment along the Pacific Ocean and Sea of Cortes coastal zones running the entire length of the Baja California Peninsula. As readers of this column may recollect, the project formerly known as Escalera Nautica now called Mar de Cortes offers some great potential for development.

 

There is already substantial development taking place and much more in the planning stages. The Bay of Loreto in Baja California Sur where Arizona/Canadian investors have taken the lead is already registering several hundred million dollars in sales. The phased in planned investment will reach the $2 billion mark. San Felipe in Baja California is likewise undergoing tremendous development incorporating several thousand acres attracting Arizona buyers.

 

These developers along with numerous others will be at the conference allowing for networking and hearing from the “horses mouth.” Attorneys, bankers and government officials will be providing information and presenting the various opportunities which the government has identified. As an added extra, yours truly has been invited to present a workshop, “The Culture and Protocol for Doing Business in Mexico.”

 

Since the investment opportunities to be presented are located along coastal waters they fall into the “forbidden zone” category wherein fee simple title is not available to individual property buyers. However, in 1992, Mexico approved changes to the foreign investment laws, which provides that a 100 percent foreign owned Mexican corporation can own property outright, provided it is for visitor related or commercial development. This change opened a new world of investment opportunities that is in turn driving the heavy investment in real estate development today.

 

October is going to be one busy month – hopefully with great prospects for the future of our binational region.

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Patrick Osio, Jr. is Editor of HispanicVista.com (www.hispanicvista.com), and monthly columnist, The Connection, for the San Diego Metropolitan Magazine (www.sandiegometro.com), where this article appears in the September 2005 issue. Contact Patrick Osio at: posiojr@aol.com

 (In accordance with Title 17 U.S.C. Section 107, this material is distributed by HispanicVista.com (www.hispanicvista.com) without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)