Second-Home Buyers Head South
As the price of beachfront property in the United States escalates, more people are looking south of the border for vacation homes
RISMEDIA, July 13, 2006-(KRT)-
As the price of beachfront property in theUnited States escalates, more people are looking south of the border for vacation homes. That has created big opportunities for Denver developer Pat Butler, who has spent more than a decade developing resort property in Mexico.
In 1993, Butler founded Denver- based Club Acquisition Co. to acquire resort and vacation properties. The company has worked in Arizona, California, Colorado and Mexico. In 2004, his company partnered with Paladin Realty Partners to develop the Estrella del Mar Golf and Beach Resort in Mazatlan. When completed, the 816-acre development 10 minutes from the Mazatlan airport will have 1,145 home lots and 631 condos.
The development is expected to generate $500 million in sales from condos and lots. Prices for home sites start at $195,000. Prices for condos start at $275,000. The resort features 3K miles of beaches on the Pacific Ocean and a Robert Trent Jones Jr. championship golf course. The master plan includes a branded hotel, an equestrian center and stables, a tennis center and a spa.
Estrella del Mar is Butler’s second venture into Mexican resort development. In 1994, he bought El Dorado Ranch, a 200,000-acre retirement and vacation property just north of San Felipe, a fishing village on the Sea of Cortez. About 35,000 acres of that property can be developed to allow foreigners to own land in Mexico.
So far, more than 7,000 homesites have been sold and1,500 residences have been built. Prices for the homesites start at $40,000.Prices for condos start at $350,000.
“The Mexican government is interested in responsible foreign investment,”Butler said. It wants investors to create jobs, educate the workforce and work with charities. Butler has responded.
His El Dorado Ranch development and other businesses in San Felipe — including a hotel, plus Thrifty Car Rental and Century 21 franchises — have provided more than 500 jobs and supported local education, sports and ecology. Butler also has provided numerous educational scholarships and grants and sponsors a charity celebrity golf tournament that benefits the San Felipe de Jesus School.
U.S. citizens wanting to buy vacation homes in Mexico should follow the same rules they do when buying real estate in the United States, said Richard Krumbein, head of international practice for the law firm Snell & Wilmer LLP, which has offices in Denver. It’s important to check for a clear chain of title and put down payments into escrow, just as you would in the U.S.
“The reason people get in trouble is because they tend to leave their common sense at the border,” Krumbein said.
On the Mexican mainland, a foreigner can buy property fee simple except when it is in the restricted zone: 32 miles from the shoreline or 62K miles from the border. Buyers can purchase real estate in the restricted zone through a Mexican bank trust called a fideicomiso. For an annual fee of about $300, the bank serves as a trustee, holding title to the property for up to 50 years. Mexican real estate is a good investment, Krumbein said. Just like in theU.S., it’s booming. “The two economies are closely tied,” he said. “When the U.S. sneezes,Mexicans get pneumonia.”
Copyright C 2006, The Denver Post Distributed by McClatchy-Tribune Business News.