Forums > Specific Focus > Home, Garden & Construction in Mexico

julietl

Jul 20, 2004, 1:25 PM

Post #1 of 12 (7171 views)

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Rehabbing Condos - how feasible?

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Hi!

I hope some one can help me with this. I want to start a side project of buying condos, fixing them up and reselling them.

I am in the process of doing this in my condo now, and would like to take on another for investment .

I only have enough resources to do one invesetment condo at a time, I have a builder who I would work with to do the work. I am not talking about extensive construction work, however; I am thinking mainly cosmetic - new doors, carpet/floors, paint, kitchen & bathroom upgrades, etc.. nothing to do with altering the structure substantially.

My question - am I completely insane to try and do this? Do you know anyone who has, or is doing this in México on a scale similar to mine (tiny). I live in México City.

The concerns that have arisen that need to be addressed are: knowledge of neighborhoods, current selling prices, contractors, tax issues. I am working on those, but if someone has some insight / advice, I would appreciate it.

Thanks!!
Juliet
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Marlene

Jul 21, 2004, 5:18 PM

Post #2 of 12 (7137 views)

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Re: [julietm] Rehabbing Condos - how feasible?

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It sounds to me like you have your bases covered, so why not? The neighbors don't necessarily need to know your private affairs (I know that's easier said than done here) or did you mean knowing who the neighbors are and what they are like?

If you know the drill such as location, location, location, resale demand, tax requirements and have reliable trustworthy people to work with I can't think of a reason not to. You would be helping others that don't care to do the renovation thing. I did this in Canada with houses, and enjoyed it. I am taking a siesta right now, but haven't ruled out resuming all that good fun (!??) here in Mazatlan where our real estate market is hopping right along. Enjoy.

(This post was edited by Marlene on Jul 21, 2004, 5:22 PM)

Esteban

Jul 23, 2004, 12:14 PM

Post #3 of 12 (7105 views)

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Re: [julietm] Rehabbing Condos - how feasible?

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Most important, to me, is to look at the condo association and how it stacks up financially. Are the fees being paid? Are there legal ways to enforce condo fees and assessments? What are the chances of the fees being raised to a point of absurditiy? After having owned a condo in Tucson and having served on the condo board of directors, they scare the hell out of me.

Marlene

Jul 24, 2004, 5:55 PM

Post #4 of 12 (7078 views)

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Re: [Esteban] Rehabbing Condos - how feasible?

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That is a good point. There are condo/strata title situations in Mazatlan where the owners had/have allowed the fees to lapse into dilinquency and collecting from some of them seems to be a big challenge.

julietl

Jul 27, 2004, 12:49 PM

Post #5 of 12 (7040 views)

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Re: [Esteban] Rehabbing Condos - how feasible?

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Thanks for the advice guys - I really appreciate it.

As far as the neighborhood thing - my concern wasn't what the neighbors would think, but rather knowing the particular neighborhoods in the city where I should invest.

About the condo fees - I hadn't thought about that - but actually we are dealing with that right now in my building! There is this guy on the 5th floor who hasn't paid his fees for a year and a half, and the rest of the residents have no recourse, or at least I don't think we do.

I am still going to have to stick to condos, though, because single famil homes around here are rare and completely out of my price range.

So - I figure I have 2 options: one is trying to find a crappy condo in a great building, or buying a "preventa" basic unit and fixing it up myself.

I'll let you know if this gets off the ground!

cheers-
j
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Esteban

Jul 27, 2004, 1:50 PM

Post #6 of 12 (7033 views)

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Re: [julietm] Rehabbing Condos - how feasible?

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There are ways to get the slackers

to pay the fees but you just have to be creative. One condo association here in Mazatlan, made it so you can't use the elevator unless you have a special card and to get the card that activates the door, you have to be current on the fees. Otherwise, you use the stairs. Having to walk up to the fourth floor everytime sometimes, can be a great motivational factor.

Texwheel

Jul 27, 2004, 5:30 PM

Post #7 of 12 (7026 views)

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Re: [julietm] Rehabbing Condos - how feasible?

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"We have ways." is what Tony Soprano would have said in a recent episode as I rented Season #4 of the series. Use your imagination, like a smoke bomb under the guy's front door on occasion, dog poop in his mail box. Just don't get caught! I know, easier said than done. (Uh Oh, am I encouraging illegal activivity?)
Tom Williams
Georgetown, Texas
Texwheel@aol.com

Esteban

Jul 27, 2004, 5:48 PM

Post #8 of 12 (7022 views)

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Re: [Texwheel] Rehabbing Condos - how feasible?

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Oh Yea, those are things that we all fantasize about doing but our better judgement reminds us that there is no perfect crime. You take the chance of starting a "Hatfield Vs McCoys" battle that could ruin your peaceful life. The most important thing is to do your homework and shy away from places with financial problems.

Texwheel

Jul 27, 2004, 6:03 PM

Post #9 of 12 (7020 views)

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Re: [Esteban] Rehabbing Condos - how feasible?

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You're "right on" as usual. But how does one research the honesty of other owners of a condo complex if the management doesn't exist or care? (PS. From what I've read, I might rent, but doubt I'd ever buy a condo, NOB or SOB.)
Tom Williams
Georgetown, Texas
Texwheel@aol.com

abq

Jul 27, 2004, 6:47 PM

Post #10 of 12 (7017 views)

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Re: [Texwheel] Rehabbing Condos - how feasible?

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You might not, but at least in the US, condos have proven to be a great investment. Their appreciation rates have surpassed the gains in value of single family homes in many parts of the country.

All predictions I've read are that many of the babyboomers prefer the ease if condo ownership.

julietl

Jul 30, 2004, 5:29 PM

Post #11 of 12 (6978 views)

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Re: [Esteban] Rehabbing Condos - how feasible?

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I love it!! That is a great idea, about the cards for the elevator.

Although, he lives on the 5th floor and is kind of old, so I would feel bad. On the other hand, our elevator always breaks down so I guess he is used to it. We live on the top floor and it is not fun, especially when you have a party.

I had to walk up the stairs about a week ago (yep, elevator was down again), and when I got to his floor I saw all these new computer boxes and fancy answering machine packaging right outside his door. I couldn't help but grumble. He can buy all that stuff, while the rest of us subsidize his share of the security, cleaning and common electricity.
"grumble....*huff, huff*...grumble......"

Since I have been shopping this idea around, I have gotten lots of good advice, but also some strange stories/myths/whatever.

One is that all the new construction right now is being done by the Jewish mafia from NYC. Ummm, huh???!?? What the hell?? I don't even know what that means! Is it good or bad? People are so wierd....

So, yeah - anyway, I still need to do lots of research but am very excited about the prospects.

My main client is American Express, so I have to keep up on the consumer loan market in México, such as it is. With all the international banks coming in - Citibank bought Banamex, HSBC bought Bital, etc......there will finally be some credit available to mexicans to have a mortgage. The banks started with car loans last year, that seems to be going swimmingly, so on to the next safest loan: homes.

I also have hear that the reason banks are lending money is that the government has finally cracked down on defaulters and have given repo men some legal teeth, but not sure if that's true.

HSBC just introduced a 9.99% mortgage, so perhaps there could start to be a semblance of a middle class soon. That means starter condos to me, hence the plan.

juliet
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Esteban

Jul 31, 2004, 6:45 AM

Post #12 of 12 (6966 views)

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Re: [julietm] Rehabbing Condos - how feasible?

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There is quite a story behind a bunch of high interest loans that were acquired during a time of radical inflation. Out of the fiasco the Barzon party emerged. Giving teeth to collection agencies for some of the old VERY high home interest loans may not be all that it is cracked up to be. Ask around about that situation and you may find certain properties in legal limbo. In other words, it's something that hasn't be addressed on this forum and may pose a higher risk when dealing with properties.