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REAL ESTATE & NEWS - In-House Financing

Can In-House Financing Help Trigger the Next Baja Real Estate Boom?
by Alejandra Esquivel
With a slow housing market trending the real estate world, and economic uncertainty glooming over millions, Baja real estate developers may yet attract buyers with purchasing plans very much within their affordable grasp.
The number of housing and condo developments in the Baja California coast increased significantly in the past few years. As a result of the boom in construction and the current market conditions, opportunities are arising for the knowledgeable investor who can expect a significant return on the investment after the market has recovered, as well as for the American retiree considering moving to Mexico.
Baja California has been attracting retirees for decades with its perfect weather, affordable beachfront housing and accessibility to U.S. services. In response to this, the medical infrastructure has been updated with state-of-the-art hospitals and assisted living services have been created. Combine this with the continually increasing purchasing power of the dollar against the peso, retirees not only get a secure economic future but also a lifestyle upgrade while, at the same time, extending their income by 3 years per each 10 of retirement funds.
The number of Americans living in Mexico was reported to have increased by 17 percent from 1990 to 2000. This number could very well double since the people looking to relocate to Mexico are not just baby boomers anymore. Many people in their 30s and 40s, looking for a slower pace of life, are moving to Baja and starting their own business; people who can't afford the California real estate prices live in Baja and work in California; and some people are transferred to Baja for business.
The Baja peninsula is currently estimated to have around 250,000 American expatriates, with approximately 12 percent of them living along the Tijuana-Ensenada corridor. For these people neither health concerns nor security issues are enough to drive them away from a place they have come to call home, instead they speak out against the negative publicity Baja has received.
Considering the reasons why acquiring Mexican real estate is an appealing option, then why is the Mexico real estate market and particularly the Baja California region, which is one of regions leading the retirement trend, faced with slow sales? The answer could be simple: financing. The slow down in the economy has significantly reduced the number and type of loans the financial institutions are issuing. With fewer institutions providing loans, qualifying becomes more and more difficult.
In response to this current situation some developers in Baja are starting to offer in-house financing, which alleviates the dependency on financial institutions. Some of the advantages of this type of loan are: no property appraisal, it identifies a financially sound seller, possibility of getting customized loan terms, and it is not a rigorous screening process, which makes it available to people with lower credit scores.
Kathy Katz has been a resident of Baja California for 18 years and a reputable broker specializing in Baja California Real Estate. With years of experience she knows very well that a buyer must be careful and work closely with their realty company in figuring out who is offering the best options. These are the key things she mentions you must look for in an investment and their in-house financing options if available:
  • It is important that title is transferred into the buyer's name and a lien placed on the property.
  • Ask about pre-payment penalties if any.
  • Make sure that when all payments are made you have the developer sign off your lien in front of a Mexican notary.
  • It is important to get a statement of your closing costs.
  • Always ask for a certificate of No Liens.
In-house financing brings the possibility of more buyers coming in to the Baja real estate market. As more developers begin to offer this opportunity, the demand for beachfront property will continue to increase. With this, the chances of getting more for less money will steadily or rapidly decrease; as was the case with the previous boom that started early in the decade, which had prices rising 10 percent to 15 percent per year.
The demand for coastal real estate in Baja California still exists. The lack of purchasing power brought about by the economy is one of the reasons for the slow market. When you make funds available for the prospective buyers, and combine it with the current prices, the possibility of a next boom is not so far fetched.

Alejandra Esquivel was born in Baja California and has never lived far from the Baja coast. She has written several articles on its cities, communities and places of interest. You can find more information on Baja California and this particular subject by visiting

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