Baja / Los cabos

User Forum Topic
Submitted by matt on May 22, 2016 - 7:28pm

Hi all - am thinking about buying a lot or home in the San Jose Del cabos or east cape area. Am wondering what you have been hearing about the market and its future outlook. It seems to have peaked shortly after our peak and then collapsed and stagnated since 2008. Recently hurricane odile really hammered the area. Properties seem to stay on the market a very long time so am wondering if this is a buying opportunity. Lots of big name hotels moving in... Very low property taxes and healthcare... Short flight from so-cal and popular with Canadians... Can still purchase a largish oceanfront lot on the east cape for a few hundred thousand. Oceanfront or nice gated community ocean view home in the 1m plus range.... And all the way down to small ocean close casitas for a couple of hundred k. Would love to hear your thoughts.

Submitted by HLS on May 22, 2016 - 8:16pm.

Simple question WHY??
Even if all your assumptions are correct,
You have unknown risks in a 3rd world country.
What are you trying to accomplish ?

You think the legal system will treat you fairly if you ever have a dispute ?
Do you know what the title rights are in Mexico
and how good title insurance is there ?
Are you a Mexican citizen ?

PS: the Canadian dollar is 'relatively' weak.
I don't know what the laws are for foreign ownership there but I'd NEVER consider buying property in Mexico.

You are also dealing with potential income tax concerns/double taxation no matter which border you cross.

Submitted by FlyerInHi on May 22, 2016 - 9:55pm.

Sounds like a nice lifestyle.
I don't really like Mexican culture or cuisine so it's not for me, but people love it. The online pictures look good

As far as buying in Mexico, plenty of people have done so successfully, so you can too.
LJ banker, who posted here bought in Mexico. He said he loves it and loves the health care. So it can be done if that's what you want.

Submitted by scaredyclassic on May 22, 2016 - 10:30pm.

The robosigning lawsuits were in full swing while I was in escrow, I barely trusted the u.s. title system...mexico...I think I'd rent...but I'm scared.

Submitted by mixxalot on May 22, 2016 - 10:32pm.

Definitely get a Mexican lawyer familiar with real estate laws as they pertain to foreign ownership.

Submitted by matt on May 23, 2016 - 11:52am.

Thanks for the feedback. I neglected to mention my wife is from Mexico so we can own free and clear any property including close to the coast. As to why are we interested?

1. Oceanfront home under 1m... 1 acre lot, steps down to secluded beaches that stretch for miles ... Could never afford anything similar in San Diego... Made of real concrete not sticks... Property taxes of a few hundred dollars per year
2. Gorgeous clean ocean, surf, fishing, snorkeling, great water temp
3. Low cost healthcare
4. Low cost help/ maid
5. Nice climate not as humid as further south
6. 2 hr direct flight from San Diego
7. San Jose is a very nice town with low crime restaurants galleries... Had a seafood feast with beers for 20 bucks

Main concern is hurricanes and liquidity (as mentioned property doesn't seem to be moving very fast)

Submitted by livinincali on May 23, 2016 - 12:49pm.

matt wrote:
Thanks for the feedback. I neglected to mention my wife is from Mexico so we can own free and clear any property including close to the coast.

This is one big advantage you have. You aren't faced with as big of a risk concerning "corrupt" government. As for hurricanes, a concrete structure should hold up to a hurricane fairly well but you could certainly end up with some damage. I don't have any idea about property insurance in Mexico or if you can even get it. Most insurance companies don't insure against the inevitable.

As for liquidity it probably isn't that liquid. The housing market in San Diego over $2 or 3 million dollars isn't very liquid either. There aren't many Mexican nationals that can afford coastal property in Mexico so you'd have to hope that the Mexican government establishes stronger property law protections for foreign nationals. That way people might feel safer about investing a significant sun of money in Mexican property. It's probably not the best bet in the world but who knows.

Submitted by FlyerInHi on May 23, 2016 - 12:55pm.

matt wrote:
Thanks for the feedback. I neglected to mention my wife is from Mexico so we can own free and clear any property including close to the coast. As to why are we interested?

1. Oceanfront home under 1m... 1 acre lot, steps down to secluded beaches that stretch for miles ... Could never afford anything similar in San Diego... Made of real concrete not sticks... Property taxes of a few hundred dollars per year
2. Gorgeous clean ocean, surf, fishing, snorkeling, great water temp
3. Low cost healthcare
4. Low cost help/ maid
5. Nice climate not as humid as further south
6. 2 hr direct flight from San Diego
7. San Jose is a very nice town with low crime restaurants galleries... Had a seafood feast with beers for 20 bucks

Main concern is hurricanes and liquidity (as mentioned property doesn't seem to be moving very fast)

It's a lifestyle. Do it!
I'm imagining a house with large bay windows onto the ocean!

Submitted by deadzone on May 23, 2016 - 3:19pm.

matt wrote:
Thanks for the feedback. I neglected to mention my wife is from Mexico so we can own free and clear any property including close to the coast. As to why are we interested?

1. Oceanfront home under 1m... 1 acre lot, steps down to secluded beaches that stretch for miles ... Could never afford anything similar in San Diego... Made of real concrete not sticks... Property taxes of a few hundred dollars per year
2. Gorgeous clean ocean, surf, fishing, snorkeling, great water temp
3. Low cost healthcare
4. Low cost help/ maid
5. Nice climate not as humid as further south
6. 2 hr direct flight from San Diego
7. San Jose is a very nice town with low crime restaurants galleries... Had a seafood feast with beers for 20 bucks

Main concern is hurricanes and liquidity (as mentioned property doesn't seem to be moving very fast)

Why Cabo? Every advantage you mention here can be accomplished in the Tijuana-Ensenada region (except warm water) for far less money. Check out Real del Mar, gated community with ocean views and golf course less than 30m from the border.

1 million for a house anywere in Mexico is crazy overpriced.

Submitted by matt on May 23, 2016 - 6:35pm.

Thanks for the encouragement flyerinhi. My view on Tijuana and Ensenada is that it's full of "cholos" / gang bangers... Feels less safe less clean. In Los cabos you have a tiny population and a much more pristine environment.

Submitted by harvey on May 23, 2016 - 6:54pm.

HLS wrote:
... I'd NEVER consider buying property in Mexico.

Well that's one less bidder the OP will have to compete against.

My wife and I are fond of that area and always were intrigued by those properties. We never looked at them seriously though.

Sure it's more risky than buying in the US, but I don't think "OMG It's Mexico!" is an accurate assessment of those risks. If you have ties to Mexico and a competent real estate lawyer I'm sure you can make an informed decision.

Personally I would only do it with money I could afford to lose completely - which in my case is not enough to buy anything worthwhile there. If you do get something, I could be a potential part-time renter...

Submitted by Escoguy on May 23, 2016 - 8:27pm.

1. Do be sure you can get good insurance. A person I work with told me about how in Cabo after the last hurricane, some homeowners had to put up another 250K to rebuild as the insurance didn't fully cover the loss. Do some research into this.
2. Don't buy off plan ever in Mexico or most places in the world.
3. Get a lawyer who knows what he/she is doing.
4. Make sure the builders can post bond and the bank provides a written guarantee. Be sure you have a plan if a builder fails.

I personally wouldn't put more than 10% of my assets (net worth) in one property in Mexico.

Good luck!

Submitted by deadzone on May 23, 2016 - 11:21pm.

matt wrote:
My view on Tijuana and Ensenada is that it's full of "cholos" / gang bangers... Feels less safe less clean. In Los cabos you have a tiny population and a much more pristine environment.

Los Cabos is full of Americans and Canadians which is why it is very expensive by Mexican standards.

Submitted by temeculaguy on May 25, 2016 - 12:06am.

I'm not a big fan of Cabo because of the landscape. I have relatives who have had a second home in Puerto Vallarta for decades and love it. For a vacation Zihuatanejo is a fave but I see how PV offers more for ownership and part time/full time living. I've always seen Cabo as a cruise ship stop good for a few hours, not much more. But my opinion should be taken with a grain of salt, I see all of Mexico as a great vacation spot, not an investment. But then again, my other half is of Mexican heritage, speaks Spanish and I still have to coax her to even go on vacation there. But then again she doesn't have a romantic view of her ancestral home like others might, she owns not one Mexican flag. She reminds me regularly that her ancestors fled Mexico for multiple reasons, none of which have changed. Why would she want to go back for more than a few days except in a secluded resort. Dial up internet is also cheaper, I don't see people rushing to buy those 14400 baud modems. I love visiting, but I wouldn't buy property there. My Mexican future wife would kill me.

Submitted by La Jolla Renter on May 30, 2016 - 8:09am.

I'm lucky enough to be invited to stay here every year.

http://haciendacabosanlucas.com/

Amazing condo... 3,500+ sqft, 12ft ish ceilings, with own private infinity pool and hot tub. I think the purchase price was just over $3M and another $1/2M in furnishings and art.

It sure is nice to have a few rich friends, especially really down to earth nice ones.

Additionally, I noticed that the place has what look like marine grade stainless steel ancors in the stone on the exterior around the windows and doors to board up the place prior to hurricanes.

Submitted by matt on September 19, 2016 - 10:27am.

Well I closed on it .. 800k for a 4 bedroom Mexican hacienda style home + casita on a 14k lot with stunning panoramic sea of Cortez views in a gated beachfront community near to the palmilla in San Jose Del cabo. Home valued at close to 2m when the market peaked in 2008. Needs about 200k of renovations to bring it back to life but has great bones and an amazing beach below.

Will let everyone know how the journey goes and when it's ready to rent. Am defintely investing in hurricane shutters!

Submitted by mixxalot on September 19, 2016 - 11:02am.

Buena suerte! Me, I prefer Uruguay, Costa Rica, and Chile.

Submitted by matt on September 19, 2016 - 11:22am.

They are great spots but I do like the 2 hour 200 dollar round trip direct from San Diego plus my wife is Mexican which gives us a good reason to have some roots there...

Submitted by matt on September 19, 2016 - 11:23am.

..

Submitted by FlyerInHi on September 19, 2016 - 1:08pm.

matt wrote:
Well I closed on it .. 800k for a 4 bedroom Mexican hacienda style home + casita on a 14k lot with stunning panoramic sea of Cortez views in a gated beachfront community near to the palmilla in San Jose Del cabo. Home valued at close to 2m when the market peaked in 2008. Needs about 200k of renovations to bring it back to life but has great bones and an amazing beach below.

Will let everyone know how the journey goes and when it's ready to rent. Am defintely investing in hurricane shutters!

sounds like an amazing place. Enjoy!

I have never been to San Jose del Cabo so I had to look it up.

https://goo.gl/maps/9o6Rke5wpCM2

Will you make it available as a vacation rental, when not in use?

Submitted by deadzone on September 19, 2016 - 3:46pm.

Seems awful expensive for Mexico. But again, Cabo is mostly an American/Canadian vacation spot, not at all popular for actual Mexicans. So you are paying American prices I guess it should work out well as long as Cabo maintains its popularity. For me I wouldn't vacation there, flights usually over $400 from San Diego whenever I've checked. I would rather go to Hawaii any day.

Submitted by The-Shoveler on September 19, 2016 - 4:04pm.

For that price range (800K) I think you could have found something similar in Ventura County (well right now anyway, I think it will go up soon IMO), it's very weird on LA. county coast the prices are 2-3 times what they are in Ventura county coast 15 minutes up PCH ).

Or maybe in Nor-Cal (but the weather would not be the same).

Either that or Florida.

Anyway, good luck enjoy.

Submitted by FlyerInHi on September 19, 2016 - 8:40pm.

deadzone wrote:
Seems awful expensive for Mexico. But again, Cabo is mostly an American/Canadian vacation spot, not at all popular for actual Mexicans. So you are paying American prices I guess it should work out well as long as Cabo maintains its popularity. For me I wouldn't vacation there, flights usually over $400 from San Diego whenever I've checked. I would rather go to Hawaii any day.

It sounds to me like his Cabo property is comparable to an oceanfront property in kahala, HNL for $10 million. At the same budget, you can't compare to Hawaï or Ventura for that matter.

If he likes cabo's culture and lifestyle, then it a super deal.

Personally, I prefer a condo in Waikiki where there's a lot of activity. For ocean living in a big house, i would prefer Thailand where i like the food and culture. But I'm not a small town beach person.

Submitted by matt on September 19, 2016 - 9:10pm.

Plan is to try to vrbo /Airbnb it, tourist volumes to Los cabos are high and growing, with one of the highest average room rates in Mexico which is now a top 10 global tourism destination. I also personally believe in the vacation home rental trend.

Lot of big name hotels are moving in (ritz, 4 seasons, JW). People coming for fishing, golf, and Eco tourism. Property taxes, home help, and medical costs all low from a retirement perspective and crime rate in Los cabos itself is the lowest in Mexico.

The market has been hit hard by an absence of financing since the bust so mostly cash buyers and lengthy sales cycles which is why we think we may have got a deal or at least timing right.

Worst case we flip it or take a small loss.. best case we generate some cash flow, see some capital appreciation, and have a beautiful vacation / retirement home for family and friends.

Prices are peaking in so cal so for me not the best time to buy and because I work overseas, even with tax returns, financing is a bitch. Plus a full on ocean view home with this type of lot and beach access below is 5m+ plus 50k in property taxes, not to mention fog, eroding cliffs, and freezing water.

I guess only time will tell if it was a good idea or not.... Luckily we have a home to fall back on in so cal if needed....

Submitted by flyer on September 19, 2016 - 9:21pm.

We actually prefer HI also, and bought a Kahala oceanfront home from a very desperate seller quite a few years ago. It was a steal, or we probably never would have done it.

We'd never give up our homes in CA, but since our travel is virtually free, and the entire family uses the property, it's worked out well, but I can also see the appeal of the Cabo property. It's beautiful there.

Submitted by matt on September 19, 2016 - 9:26pm.

Thailand is indeed great. I just spent ten days in Phuket. Cheap great food, amazing massage at ten dollars an hour, beautiful beaches, cheap hotels, decent diving, people leave u to do whatever u like. Lot of Russians and Chinese. Quite far from so cal if that is your base.

Submitted by FlyerInHi on September 20, 2016 - 10:48am.

Matt, I think that relative to the rest of the world, Mexico is undervalued. When the perception of drugs and violence goes away, Mexico will do well.

Yes, unfortunately Thailand is too far us, Americans. For cost of living to value for the money, it's the best. Great food, friendly people. Safe.

Submitted by matt on January 6, 2017 - 11:37am.

Renovation almost complete

Submitted by matt on January 6, 2017 - 11:39am.

San Jose Del caboSan Jose Del cabo

Submitted by Rich Toscano on January 6, 2017 - 2:02pm.

Wow... stunning!

Pigg meetup at Matt's house? ;)

Submitted by FlyerInHi on January 12, 2017 - 11:09am.

awesome view!!

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