There is a news report out about some investors losing their money in the area known as Rocky Point in Sonora, Mexico near Puerto Penasco. Whether this could have been avoided is arguable…or make that probable. Read the story and you get the sense that some of those who feel duped maybe didn’t thoroughly investigate the situation before handing over their considerable amount of cash to the developers and before verifying that the developers had a clear title in place for the land that they were to develop, and this is important, THE FUNDS TO FOLLOW THROUGH.
Mexico has long been littered with projects that were never completed. However, the foreign investment laws enacted in 1993 that allowed for gringo ownership via a fideicomiso (bank trust) have paved the way for tens of thousands of land transfers with no significant problems. If you follow the best advice and adhere to the laws, Mexico is a safe investment (nothing is 100% anywhere). But one thing is clear to me: you should be extra diligent when investing in any multiple unit, new project. It is imperative to ensure that the developers have all of their financing in place, and clear title in hand. And then there will still be some risk involved. That is the nature of investment and is pretty universal advice no matter the country. There are some flake developers out there…always have been. If it smells at all fishy, or too fantastic, for that matter, take your money off the table and think about it for a while. Do more homework, contact other buyers, and involve a lawyer.
There are many reasons that I prefer single-family residences to condo, townhouse or planned community developments. High on the list is that they are much cleaner deals with the risk factor hugely diminshed. You are dealing with one seller for a property where you can verify the ownership fairly easily. From there the steps required to purchase are very clear with the inclusion of a notario (a special real esate lawyer), as required by Mexican law.
I’ll be following this Rocky Point situation as it develops and let you know what I find.