[matt]

I felt a huge sense of relief when We paid off our primary home. Knowing that I just have to come up with property taxes and bills to keep a roof over my family’s heads was incredibly liberating. Paid off the Airbnb In Cabo too. Now both together are generating 10k / month while I work overseas stashing more cash and looking for that next investment. Certainly a lot to be grateful for but these are choices and sacrifices we have been making for 20 years. So many expats out here are squandering their pay on fancy cars and business class tickets… only to see themselves booted without a penny to their name. I am determined not to have this happen to me.

[matt]

I think Austin has a good chance.

[matt]

I just went through a major renovation in Mexico of all places and mainly remotely.

If you proceed here is my advice:

1. Create a high level list of what u think needs to be done
2. Tour the house in detail with at least 3 well recommended GC’s
3. Take extensive notes and use their comments to develop a detailed list of works. Specifications, etc
4. Request bids and compare pricing (mine ranged from 150 to 550)
5. Take all to dinner to get a feel for who they are – watch out for scare tactics, e.g. Mexican contractors are all crooks
6. Identify a preferred bidder and use your pricing comparisons to squeeze a litttle or fine tune scope (I didn’t squeeze too hard because they need to make money too and you don’t want them cutting the wrong corners)
7. Prioritize functionality over aesthetics (securing the house from the elements comes first)
8. Sign a contract and embark

Maybe I got lucky but the above worked really well for me – ontime and on budget. Here’s a link to my place in Los cabos post renovation. It was battered by hurricane odile so a complete disaster. We now have aluminum shutters and extreme low maintenance exterior (stone tables, etc).

http://abnb.me/EVmg/TFR7OVgYmG

Matt

[matt]

50k savings on a million – I could go thru some discomfort for that. Makes sense to me.

[matt]

And this is with the huge Airbnb volume coming on the market.

[matt]

Major red flag

[matt]

Thanks for the kind wishes all and sorry for the delayed response.

We are not at retirement age yet but it could be an option to live in Mexico off the rent of our la Costa oaks home. Ideally a small apartment in Barcelona on the side as well :). Right now I am working in the UAE and saving every penny I can for the future and our kids college… so I do need to start generating some cash from this place.

The main thinking on the investment was the realization of how little 1m can buy you in so-cal + the financial burden of property taxes. And the desire to create an option in a lower cost of living country. We are currently getting a maid all day for about 25 dollars and if u choose to live within your means even Los cabos can be affordable..

The HOA over here is fine with short term rentals. The only peculiarity being they do not allow you to rent the casita but I’ll see if I can get away with it!

[matt]

Property tax is a couple of hundred bucks a year. HOA is 3000 / year which mainly goes to the administration and the 24 hour gated security. Other HOAs like Palmilla or golf communities can be higher. Energy costs are high and hurricanes a risk making solar an interesting question. I invested 25k in aluminum accordion shutters shipped in from Florida. Also installed a back up generator in case of power outages. Water is supplied by the city into two pilas, one for the main house and one for the casita. Septic tank/ grey water system also in place. Lots of learnings compared to California :).

[matt]

Thought I’d share where we ended up on this project. Total investment of 800k purchase price plus 200k to renovate. Enjoying it right now and the area is booming.

https://www.airbnb.com/rooms/16947602?location=Rancho%20Cerro%20Colorado%2C%20Palmilla%2C%20Mexico&s=97LXrRIL

Matt

[matt]

[img_assist|nid=26165|title=San Jose Del cabo|desc=|link=node|align=left|width=1278|height=960]

[matt]

[img_assist|nid=26164|title=|desc=|link=node|align=left|width=100|height=75]Renovation almost complete

[matt]

Not not so good, however, for those of us that would have liked to pick up 1-2 more properties in the coming years…

[matt]

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.

[matt]

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….

[matt]

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