Buying our Mexico dream property on Cozumel
As I walked through the hotel lobby, the weight of the three hundred $100 bills sewn to the waist band of my Jockey shorts pulled my underpants down over my small rear. The money was hanging at my knees. As inconspicuous as a penguin waddling through the hotel lobby at high noon, I could easily have been mistaken for an amateur drug smuggler. When I approached the front desk, the clerk asked, "Qué le parece un caja de seguridad?" I knew my cover was blown when he offered me a Safe-deposit Box.
It had been a long trip. Leaving my office at 3 p.m. the day before for the five hour drive to San Francisco, I drove my pickup loaded with a couch and love seat destined for my oldest son’s first apartment and $30,000 stitched into my underwear. After dropping off the furniture, I caught my flight from San Francisco which left at 1:35 a.m. and, after a two hour lay over in Houston, I arrived in Cozumel at about noon. All this hassle simply to satisfy the seller’s demand that I pay greenbacks for my Mexican real estate deal. I had learned this is not unusual in buying property in Mexico. I could have wired the money, but I would’ve been stuck paying a commission twice: once to convert the funds to pesos and again back to dollars. Airfare was cheaper.
One broker told me that I could not take more than $10,000 into Mexico. My research proved him wrong: there is no restriction as to amount, but you must declare any amount over $10,000, which I did. Customs did not even ask me what the money was for. An additional form may be required, but I was not asked to complete it.
It had taken six months to find a lot in Mexico for a price I was willing to pay. For several years, I have wanted to develop rental units for tourists, both to generate income and for a winter vacation home. As an attorney, I had helped a client buy a duplex in San Carlos.
In December ‘96, my youngest son and I drove the tourist corridor between Cancun and Tulum, continuing south to Chetamal and inspecting property in every town and fishing village in between. On New Years Day we took the ferry from Playa del Carmen to Cozumel. I liked what I saw. Beautiful beaches, crystal clear water, friendly people, and a healthy economy. It has the same small town atmosphere of my home town in California where you can walk the streets at night in safety.
It takes patience and tenacity to purchase property in Mexico. The seller of the first lot on which I made an offer asked $22,000. I offered $18,000 and the seller came back with a counter offer of $30,000. When I asked the broker, "Qué pasa?" she said: "That is real estate in Mexico." Similar experiences repeated themselves over the next five months. Each time I made offers for the asking price, only to be told the seller now wanted more. Finally I made a tentative agreement on parcel for a price I was willing to pay. Immediately flying down to Cozumel, with the money in my shorts, I’d expected to meet the seller on Friday to close the deal. Not until I arrived on Thursday afternoon, did I learn that the seller wanted me to pay the sales and capital gains tax. On Friday morning, I was told she had missed her plane to Cozumel and would arrive on Saturday at noon. I said: "Fine, I’m going diving Saturday."
At 8:30 Saturday morning, I met the dive boat and we went to Columbia reef. We dove at 100 feet amid coral pinnacles towering above us in arches and caves. Huge inquisitive groupers swam up to my mask. After a break on the surface, we dove Villa Blanca reef, loaded with small tropical fish. Returning to the dock at 1:15 p.m., I was scheduled to meet the seller at 2:00 p.m. After a quick shower and change of clothing, I arrived at the broker's office on time, and the seller was there! A very nice lady who spoke much better English than my Spanish. After a few small changes to the contract, we signed and I delivered the greenbacks.
On Sunday, I celebrated with two morning dives and a night dive. After meeting several architects, on Monday I signed a contract for the development of six rental units and a pool on the property.
Although I have litigated and drafted hundreds of real estate transactions in California, I knew I needed assistance from an attorney in Mexico. Some of my knowledge has been helpful, but doing business in Mexico is challenging because of the different language, laws and culture. I retained a Mexican attorney in Mexico City to review the contract and form a Mexican corporation for me. He has been very professional and prompt in providing services and responding to my questions.