October 8, 2025 • 39 mins
In this dynamic roundtable edition of Echando Raíces (part 1), we tackle the most urgent questions from investors buying in Mexico’s coastal hotspots. From understanding the fideicomiso trust system to unpacking delay penalties, closing costs, pre-sale flip strategies, and even why your unit doesn’t come with a parking spot—this episode is a masterclass in practical real estate investing. Whether you’re navigating your first purchase or scaling your portfolio, you’ll walk away with a sharp investor lens and the clarity needed to make smart, informed decisions.
The questions we'll be tackling today:
- What rights do I have if I buy through a trust (fideicomiso)?
- What happens if the construction delivery is delayed?
- What appreciation can my unit have at the time of delivery?
- What closing costs should I budget for?
- Can I resell my unit before receiving it?
- Why don't some developments have assigned parking spaces?
- Can I modify my apartment if I buy it in pre-sale?
Ideal for: First-time investors, curious buyers, and real estate agents looking for clear answers and advice from experienced professionals.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Okay, let's unpack this.
We are diving into a treasurechest of real estate knowledge
today.
And this isn't just theory.
No, not at all.
Our sources come directly from ahigh level investor q and a
round table, And this wasn'tsome casual presentation.
This was.
Seven industry heavyweights,tackling the most immediate,
critical questions thatinvestors both foreign and
(00:22):
domestic need answered rightnow.
Yeah.
Specifically about buyingproperty in, you know, those
high demand tourist zones.
That's absolutely right.
And our mission for you, thelearner, is really to bypass
weeks of reading, cut straightto the actionable insights, yet
the cheat sheet, basically,pretty much we're extracting the
essential knowledge nuggets thatclarify.
Legal certainty definecontractual protections and
(00:44):
expose those subtle but crucialhidden costs that often surprise
new buyers.
Oh yeah, those always get you.
They do.
So we've structured this deepdive around the seven most
pressing questions posed tothese experts during that round
table, and we're gonna covereverything from that.
Let's be honest, sometimesconfusing legal figure of the fi
miso.
Definitely a point of confusion.
(01:05):
All the way to the maybesurprising financial calculation
behind why your investment condolikely doesn't have its own
assigned parking spot, right?
Seems counterintuitive, butthey're logic.
We need to jump right in becausethese details, they really
define the high risk, highreward nature of this sector,
don't they?
They absolutely do.
Yeah.
Understanding these points iskey.
(01:26):
Okay, let's start with thecornerstone question.
Especially for any internationalbuyer looking at coastal
property.
If I buy through Fideicomiso, atrust is the apartment mine.
Hmm.
Yeah.
That's the big one.
This fear of not truly owningthe property.
I think it's probably the singlegreatest psychological hurdle
for non-nationals entering thismarket.
It's a fundamental question andit pops up because the legal
(01:49):
structure, well, it's complex.
It's rooted in history.
What's fascinating here is thatthe fi miso exists precisely
because of geographicalrestrictions.
One's established decades ago.
Ah, the restricted zone.
Exactly.
We're talking about restrictedzones, areas generally defined
as being within, uh, about ahundred kilometers, the national
border, or 50 kilometers of thecoastline.
(02:10):
Yes, give or take.
And historically, those zoneswere restricted for like
national security andsovereignty reasons, wasn't it?
To prevent foreign control of.
Key areas precisely.
They were considered sensitiveareas and direct title ownership
by non-nationals was prohibitedback then.
So the Fiko Mezo emerged as thelegal workaround, or the legal
(02:32):
figure, as they often call it,that allows foreign investment
to flow into these really primelocations while still
technically complying with thosehistorical land laws.
Okay, so let's break down thetrust structure simply.
Who are the players involved?
Like who's who in this setup?
Sure.
You basically have three keyroles.
Mm-hmm.
First, there's the fi ante.
That's usually the developer orthe seller, the one who
(02:52):
transfers the property into thetrust.
Second, you have the fiduciary.
This is the institutionaltrustee.
It's always a certified Mexicanbank.
They legally hold the title.
The paper title, the bank holdsthe title.
Got it.
And the third.
The third is you the investor.
You are the fide cesario.
That's the beneficiary of thetrust and this beneficiary
(03:13):
status.
That's the key to the ownershipquestion.
Right?
So while the bank technicallyholds the what?
The naked legal title, that'sthe term.
Yeah.
Naked title.
What rights does the investor,the beneficiary actually
possess?
What can you do?
Okay, so the investor retainsall the essential rights of
ownership.
It's often called these theBeneficial rights, beneficial
rights, which means you have theright to use and enjoy the unit.
(03:36):
You can live in it yourself.
You can lease it out for profit,long-term, short-term vacation
rentals, whatever.
Okay, and crucially.
You have the right to sell yourbeneficial interest whenever you
want.
You can transfer it.
You can inherit it.
So for all intents and purposes,you control the asset, you reap
the financial rewards, and youalso bear the risks associated
with ownership.
(03:56):
It functions like directownership in practice.
It sounds like the legalstructure is a difference, but
maybe not a practicaldistinction for the investor's
day-to-day control, as long asthey play by the rules.
That's a good way to put it.
And speaking of rules, theexperts at the round table were
very, very clear about onenon-negotiable legal limitation
is tied to property use.
(04:17):
Well, yes, that's the criticalcompliance point, the designated
use of the property.
What does that mean exactly?
It means if the property wasacquired with permits for
residential use, and thatusually covers both personal
residency and vacation rentals.
You cannot legally just decideto alter that to commercial use.
So no opening a shop, no openinga storefront or an office space
(04:38):
or say a medical clinic, not ifit was permitted as a
residential and vice versa.
Of course.
Let me push on that.
Say I'm an investor, I bought areally large ground floor unit.
Why can't I just decide, youknow, I'm gonna turn this into a
private high-end dentist'soffice.
Isn't that my prerogative if Ihave those beneficial rights?
That's a great question and it'swhere municipal rules and the
(04:59):
project's own planning rulesintersect with your beneficial
rights.
Ah, okay.
The bank holding the fi miso,they have obligations.
And the homeowners associationstructure, the condo regime,
they're also obligated toenforce the original permitting,
right?
Changing the use, say fromresidential to commercial.
It changes everything.
The density calculations, theinfrastructure demands, water,
(05:23):
electricity, usage patterns,even the tax structure for the
property, and sometimes thewhole building.
It's not just your unit inisolation.
Exactly.
If the development was permittedfor, say, 144 residential units,
one owner can't justunilaterally compromise that
legal designation for the entirebuilding.
Yeah.
Sense.
Nor can they disrupt theenvironment for the other owners
(05:44):
who specifically bought into aresidential concept.
You can't have drills buzzingnext door if you bought a
vacation condo.
Okay.
So the key takeaway here is.
You get certainty of rights,very similar to direct
ownership, but you absolutelymust adhere strictly to the
unit's designated purpose.
That's it.
Get that clear before you writeany checks.
(06:05):
Essential clarity, right?
Moving from those legalfoundations to managing risk.
The next investor question, thisone strengths, right at the
heart of presale anxiety.
What happens if I buy, but theconstruction gets delayed?
Mm-hmm.
A million dollar questionsometimes, literally, right?
Every investor buying off planis betting on the future
delivery date.
A delay means lost rental incomecapital tied up.
(06:28):
It's stressful.
It absolutely is.
Yeah.
And this is where doing yourhomework, your due diligence on
the developer's track recordbecomes your very first line of
defense as so well, theRoundtable discussion featured
developers who were able to citespecific examples.
They weren't just saying, trustus.
They pointed to delivering theSerena project during the
immense difficulty of thepandemic shutdown.
(06:48):
Wow.
Okay.
That's a stress test.
Huge stress test, orsuccessfully completing other
projects like Costa Celeste in aStudio 34, maybe on time, maybe
even a bit early.
This history, it suggests alevel of commitment and
capability that goes beyond justfavorable market conditions.
Reputation is good.
(07:09):
Absolutely.
The cold hard reality checkcomes down to what's actually
written in the purchase promiseagreement.
The contract 100%.
Where does that contract providethe actual protection when
unavoidable delays happen?
You know, things like majorhurricanes, supply chain
disruptions, labor shortages.
Mm-hmm.
Stuff happens.
The contract is your ultimatesafeguard, or it should be.
Yeah.
(07:29):
And what's interesting here isthis sort of.
Two tiered system they generallyemploy to handle delays, two
tiers.
Okay.
First, the contract has tostipulate a clear promise
delivery date that sets theinitial expectation standard
enough, but critically, italmost always includes a defined
grace period.
This period is pretty standardacross the industry, typically
(07:50):
ranging from, say, three months,up to maybe six months.
Okay?
So that grace period acts as abuffer.
Like a built-in allowance forunforeseen issues.
Precisely.
If the developer delays for say,five months, and the grace
period in the contract to sixmonths.
Well, technically they haven'tbreached the delivery agreement
yet.
Got it.
It accounts for thoseextraordinary events, true force
(08:12):
majeure things genuinely beyondthe reasonable control of the
development team.
But, and this is the crucialpart.
What happens if they blow pastthat grace period?
Exactly.
What happens if the delayextends past that safety net?
This is where the financialcompensation is supposed to kick
in the penalty clause.
Okay.
Tell us what that compensationlooks like.
We need actionable numbers here,not just vague promises of
(08:34):
you'll be compensated.
Sure.
The experts confirmed that ifthe delay does extend beyond
that grace period, the client iscompensated usually with
interest payments.
Now the exact figure iscontractual.
It varies naturally, but thetypical range cited in the
market discussion was oftenbetween say 0.75% and maybe 1.5%
(08:54):
monthly.
Monthly.
Okay.
Monthly.
And it's usually calculatedbased on the total purchase
value of the unit sometimes.
Though less common.
It might be based on theaccumulated amount the client
has already paid towards theunit, right?
But that percentage, whatever itis, is paid for each accumulated
month of delay after the graceperiod expires.
Okay, let's make that concrete.
(09:14):
If I bought a$200,000 apartmentand the developer is now saved
four months past the six monthgrace period, so 10 months total
delay from the original date,right, and the contract says 1%
per month penalty on the totalpurchase value, that means they
owe me$2,000 per month,$2,000per month.
For each of those four monthspast the grace period.
So$8,000 total in this example.
(09:35):
Correct.
That provides a clear financialincentive, a penalty for the
developer to avoid thoseextended delays.
But there's always a, but is ittruly perfect for the buyer?
Does that$8,000 really make mewhole?
Well, that raise is a reallyimportant consideration for you.
The learner, while it is definedcompensation, and it definitely
(09:56):
constitutes a penalty on thedeveloper, the investor has to
calculate whether that penalty.
Truly covers their own financialimpact.
Meaning if you are banking onimmediate high yield vacation
rental income starting the monthafter the grace period ended,
does that 1% penalty that$2,000a month actually cover your lost
cashflow potential?
Yeah.
(10:16):
Maybe your projected net rentalincome was$3,000 a month.
Ah, so the penalty might coverthe inconvenience and the cost
of having my capital tied up,but it might not fully replace
the lost opportunity.
Income exactly.
The investor relying on a harddelivery date for immediate
rental revenue.
While you need to understandthat you are taking a calculated
risk, even with this penaltyclause in place, it mitigates
(10:36):
but may not eliminate thefinancial downside of a delay.
So the contract lays out therules of the game, the penalty
structure, but the takeaway isyou should always, always
consult your own legal advice.
Absolutely.
Yeah.
Review the terms carefully.
Is the grace period reasonable?
Is the penalty percentage fair?
How does a calculated totalvalue or paid amount?
(10:56):
That's what the experts reallyemphasized.
If something about the guaranteeor the penalty structure just
doesn't sound right or feelrobust enough, red flag.
Big red flag.
Yeah.
Exercise extreme caution.
Read the fine print.
Okay.
Let's shift gears a bit to theupside the profit potential.
Question number three gets rightto it.
What price do you project for myapartment at the time of
(11:17):
delivery?
Mm-hmm.
The big payoff question, this isreally what separates presale
investment from just buying aproperty that's already finished
and ready to go, isn't it?
It is.
This is pure market strategy andrisk assessment.
The projected appreciation, thepotential gain in value, it's
directly linked to the risk you,the investor, assume during that
construction phase.
(11:38):
So the timing of when you jumpin is everything.
It's critical.
It determines the size of thediscount you receive compared to
the final market price.
If you buy very early, maybefriends and family or the
initial launch phase, you'rebasically providing the
developer with seed money.
Or early construction financing.
Your capital is available whentheir risk is absolutely the
(11:59):
highest.
Exactly right.
You're taking on the mostuncertainty and the market in
theory, compensates you fortaking that higher risk.
So how much compensation are wetalking?
What's the typical discount orappreciation potential The
roundtable discussion provided avery concrete metric that these
developers often use as atarget.
They typically launch newprojects at prices projected to
be somewhere between 20% to 30%lower than the prices of
(12:22):
comparable properties that arealready finished titled and
ready for immediate delivery inthat same competitive area.
Wow.
Okay.
20 to 30% just baked in bybuying, say, two years before
delivery.
That's a huge incentive.
It's a massive incentive.
It's the primary driver forpresale investment.
How do they maintain thatspread?
Is it guaranteed?
Well, guaranteed is a strongword in real estate, but it's
(12:45):
managed.
It's a delicate balancing actbased on really rigorous market
studies of the area.
The appreciation isn't random.
Developers strategicallyincrease their list prices as
construction milestones are hit.
Ah, so the price goes upincrementally.
Yes.
Maybe a price bump when thefoundations are poured another,
when the structure's topped offanother, when finishing details
(13:07):
begin, they manage the pricelist upwards during the
construction period.
I see that initial 20% to 30%gap is carefully calculated.
It needs to be attractive enoughto bring in that essential early
stage capital from investorslike you.
It also has to ensure that whenthe units are finally delivered,
their final list price iscompetitive with the existing
immediately cash flowinginventory next door.
(13:30):
So they don't price themselvesout of the market at the end.
Exactly.
If the initial discount gap weretoo small, why would early
investors take the risk?
If it were way too large, thefinal price might be
unsustainable or signaldesperation.
It's strategic pricing.
Okay, so let's run another quicknumber.
If I buy a unit at launch forsay,$150,000, and based on the
(13:50):
market and the developer's plan,that same property is priced at
$195,000.
I've potentially gained$45,000in equity.
Just on paper before I even payclosing costs or collect a dime
of rental revenue, that is thecore driver for the aggressive
presale investor profile.
That's the goal.
Your initial profit isessentially realize the moment
that construction riskevaporates, which happens when
(14:13):
the project reaches completionand is ready for delivery
precisely.
The high reward component of thestrategy is capturing that
construction phase appreciation,Alright.
Now for the, uh, maybe lessexciting, but absolutely
necessary reality check thefinancial buzzkill, perhaps.
Ah, yeah.
Gotta face the music sometime.
Question number four, whatclosing costs should I budget
for besides the actual purchaseprice?
(14:35):
Nobody wants to get to thefinish line, ready to get the
keys, and then get hit with asurprise bill for thousands of
dollars they didn't plan for.
No, that's a terrible surprise.
And this is just foundationalstuff for accurate budgeting.
You have to know this number inKaroo where many of these
tourist developments are, right?
Like Cancun, Tulum, Pade,Carmen.
Exactly.
The consensus among the expertsat the round table and.
(14:58):
Generally in the market is thatthe estimated budget for all
your closing and titling costsis approximately 7% of the
transaction value.
7%.
Okay.
And the really key thing tounderstand here is that this
money is paid externally.
It's not going to the developer,right?
It's not part of their profitmargin.
No.
It's going to the go.
Federal state, municipal, and tothe notary public for their
(15:20):
services.
Okay.
Let's use a simple simulationagain to make that 7% feel real.
If I secured that, say,$200,000unit we talked about earlier,
Hmm.
7% of$200,000 is$14,000.
Correct.
So I need to have$14,000 in cashready to go completely separate
from my down payments and thefinal installment payment on the
unit itself.
And this is due right atclosing?
(15:41):
Pretty much, yes.
Right.
When you're finalizing thepurchase and getting the title.
It is a significant lump sumthat needs to be factored into
your total investmentcalculation from day one.
It absolutely is.
So you the learner, you need toknow exactly where that$14,000
in this example is actuallygoing.
Can you break down thecomponents of that 7%?
(16:03):
Sure.
It covers a number of mandatorydistinct things.
First, you have the notary feesor notary public rights.
You're paying for theirprofessional services.
They conduct the legal duediligence, verify documents,
calculate taxes, and officiatethe signing of the deed,
ensuring the whole transactionhas legal validity.
Okay, the notary's cut.
Makes sense.
Second.
(16:23):
There are public registrationfees.
This is the cost to officiallyrecord your new title in the
Public Registry of Property,makes it official effective.
Try it.
Government record keeping.
Third, you have various localtaxes.
This bundle includes state andmunicipal fees, and the most
significant chunk of this isusually the acquisition tax.
Locally, it's known as the ISA.
The ISA.
(16:43):
Okay.
Let's define that because itsounds important.
How is that acquisition taxcalculated and why is it such a
big piece of the 7% I a I standsfor in Sore acquisi, the in web
tax on the acquisition of realestate, it's primarily estate
tax, though municipalities mighthave related fees.
Mm-hmm.
Its calculation basis can varyslightly by state, but it
(17:05):
usually hinges on whichevervalue is highest out of three.
One, the official governmentassessed value the castral
value.
Two, a formal commercialappraisal value if one is done,
or three, the actual transactionprice stated in the contract.
Whichever's highest.
Usually yes.
They take the highest value tomaximize the tax revenue.
And this ISAI, it's typicallythe largest single component
(17:27):
within that overall 7% budget.
You're essentially paying thestate a percentage for the
right, the privilege ofacquiring that real estate
asset.
Okay, that makes sense.
Taxes and fees paid right at thevery end, once the property is
ready for delivery and the titleis being transferred.
Correct upon titling.
But you mentioned earlier theremight be a strategic financing
tip, something that could easethe burden of that$14,000 lump
(17:48):
sum.
Yes.
And this is a really criticalmaneuver for investors who want
to.
Maximize their liquidity.
Keep more cash on hand if you'refinancing a portion of your
property purchase with amortgage loan, which many
investors do, especially foreignbuyers, right?
Many banks, not all, but many,will allow the buyer to roll
these closing costs that entire7% package into the long term
(18:12):
mortgage financing.
Ah.
So instead of needing that$14,000 in cash, immediately at
closing, you add it to your loanprinciple.
And you pay it off graduallyover the 10, 15, or 20 year term
of your mortgage.
Along with your main loanpayments, that dramatically
lowers the immediate cashrequirement right at the moment
you take possession.
That could be a lifesaver forsome investors.
(18:34):
Cash flow planning, it reallycan be.
It makes the entry point muchsmoother financially.
Definitely something to ask yourmortgage broker about.
Good tip.
We also need to clarify thedistinction between buyer and
seller responsibilitiesregarding all these costs and
paperwork.
It can get confusing.
Yes.
It often confuses first timebuyers, so let's be clear.
You the buyer paid that 7%titling package to put the
(18:57):
property into your name, right,the cost of becoming the new
owner, the developer, acting asthe seller has responsibilities
too.
They must provide numerouscertificates and documents
proving the property is cleanand ready for transfer.
Like what kind of certificates?
Things like certificates.
Confirming the property is freeof any liens or encumbrances.
Certificates showing that allexisting property taxes are paid
(19:20):
up to date clearances for waterand other utility connections
proving there are no outstandingdebts.
Okay.
The seller generally bears theinitial administrative costs to
obtain these clearance documentsto prove the property is
sellable.
You the buyer, then pay the 7%package required to actually
execute the transfer andofficially switch the name on
the title deed Seller.
(19:41):
Cleans the slate.
Buyer pays to write their nameon it.
That's a pretty good analogy.
Alright, let's move into somemore strategic plays.
This next question is a puremeasure of investor flexibility
and frankly, playing the market.
Can I resell my unit before theofficial delivery?
And if so, what is the cost?
Ah, the flip before you finishstrategy.
Exactly.
(20:01):
This allows those earlyinvestors to capitalize on that
20% to 30% appreciation.
We talked about potentiallywithout ever incurring those 7%
closing costs because they neveractually take title.
This is definitely the hallmarkof the high velocity, often more
experienced real estate investorprofile.
Their goal isn't necessarily tohold and rent.
(20:22):
It's to capture thatconstruction equity quickly and
then cycle that capital into thenext hot pre-sale launch.
Makes sense.
So what's the general answer?
Can you do it?
The general consensus from theexperts was, yes, reselling or
more accurately transferringyour contract rights is
generally accepted by mostdevelopers, but there's a key
timing element.
You typically must initiate andcomplete this transfer process
(20:43):
before the official titling andunit delivery process has
formally begun for your specificunit.
Once that final stage starts, itusually becomes much more
complicated, Okay, so timing iscritical.
Administratively.
How does the developer actuallyhandle this trans full of
interest?
Is it like they just cross outmy name on the contract and
write in the new buyer's name?
(21:03):
Huh?
No, it's usually a bit moreformal than that to maintain
legal purity and avoid issuesdown the line.
Figured the procedure describedby the developers is typically a
formal termination of theoriginal purchase promise
agreement with you, the firstbuyer.
Okay.
Tear up the old one,essentially, and then the
generation of a completely new.
Fresh purchase promise agreementdirectly with the new buyer.
(21:26):
I see a clean break.
Exactly.
This clean break ensures there'sno lingering liability for the
developer related to the firstcontract, and it establishes a
clear contractual timeline andset of obligations for the
second buyer starting fromscratch.
Okay, that makes sense legally.
Now let's analyze the cost.
This was fascinating.
Instead of charging, say apercentage of the appreciative
(21:47):
value, which could be asubstantial amount, if the price
went up 30% right, a percentageof the reseal price, the
developer example, cited in thesource groupo to sewer
apparently charges just a flatadministrative fee only MXN
$25,000.
That's roughly what, 1500 USdollars around that?
Yeah, depending on the exchangerate, why would the Phoebe so
(22:08):
low and why flat instead of apercentage?
That seems almost generous.
This is probably the mostfascinating nugget of commercial
strategy we pulled from thatdiscussion.
Think about it, a highpercentage fee, say 5% or more
of the resale price, what wouldthat do?
It would eat significantly intothe first investor's profit.
Right.
It would penalize the investorfor flipping.
(22:29):
Yeah.
And discourage these kinds ofearly exits.
Mm-hmm.
It would slow down capitalmovement by charging a
deliberately low flatadministrative fee, just enough
to cover their paperwork andmaybe a tiny bit more.
The developer is sending a clearsignal.
They're implicitly saying theysupport and even encourage this
type of investor churn.
(22:49):
fosters goodwill with themarket.
It attracts the experienced highvolume investors who value
liquidity and low friction, lowoverhead administrative
processes.
Mm-hmm.
For this type of developer, it'sactually a key part of their
business model.
If they get their initial saleprofit locked in early, they
keep inventory moving and theybuild relationships with repeat
investors.
Exactly.
It's a calculated decision.
They attract serious investorswho provide that crucial early
(23:11):
capital, and these investorsdon't tie up inventory for the
long haul.
If the developer benefits fromthe initial sale may be
subsequent sales, if the unithad slipped again, well, the
initial investor achieves theirfinancial goal, realize the
equity gain without theheadache, and more importantly,
the significant expense of the7% closing costs.
Yeah, it's a win-win structuredthat we deliberately Okay.
(23:32):
This next one is the perfectpractical aha moment.
It really highlights thedifference between investing in
tourist focused condos versusbuying a traditional residential
home.
Question six.
Why doesn't the real estatedevelopment have assigned
parking spaces?
Mm-hmm.
This throws people off,especially if they're used to
North American or Europeanresidential markets where deeded
parking is almost alwaysstandard.
(23:53):
So why is it different here?
The decision is driven almostpurely by maximizing the return
on investment for you, theowner, and maintaining
competitiveness in the vacationrental market.
It boils down to an economicequation.
these developments focus almostentirely on vacation rentals,
short-term stays, right?
They're not primarily forfull-time residents.
(24:13):
Exactly.
Which means the end user, theAirbnb guest, the hotel guest,
staying for a week hasfundamentally different
transportation habits and needsthan someone living there
permanently.
Okay.
Explain that difference.
Right.
So reason number one is simplylower demand from the user.
Tourists staying in prime,walkable tourist areas often
rely on well walking or maybescooters, taxis, uber
(24:37):
prearranged, airport shuttles.
They don't always rent a car fortheir whole stay, correct.
They simply don't rent carsoften enough or rely on them
heavily enough to justify thedeveloper building and the
investor paying for hundreds ofdedicated individually deeded
parking spots.
That's reason one.
Usage patterns.
Okay.
And reason two, you said it waseconomic.
Reason two is the decisivefinancial impact on the
(25:00):
investor.
If parking were assigned anddeeded, this is where the
savings really accumulate foryou by not having one.
Okay.
Break down the true cost ofadding an assigned deeded
parking spot to my condo unit,because it sounds like more than
just the concrete.
Oh, much more.
First, remember, a standardparking spot is maybe 12 to 15
square meters of actual land orconstructed space.
(25:23):
Right.
That one simple addition,deeding that space to your unit
impacts your costs in at leastthree significant ways.
One higher purchase price forthe unit.
Initially, the developer has tocharge you for the cost of that
land and the construction costsassociated with building that
parking space.
Whether it's surface level orstructured underground, it adds
(25:43):
directly to your acquisitioncost.
Makes sense.
Pay for the space.
Two.
Higher closing costs.
Remember that 7% we just talkedabout?
Yeah.
Calculated on the transactionvalue.
Exactly.
If your unit now includes anextra square meters of deeded
parking space, the officialvalue of your property is
higher, so your 7% closing costbudget just increased, because
you're titling more squaremeters.
(26:04):
Ouch.
Okay.
Higher closing costs.
What's the third hit?
Third, and this is often thebiggest long-term drag,
increased maintenance fees yourmonthly HOA or condo fees.
How does parking affect HOAfees?
That extra square footage, evenif it's just a painted spot in
an underground garage, itrequires upkeep.
Lighting cleaning securitypatrols, or cameras monitoring
(26:25):
it, repainting lines, concretemaintenance or repairs over
time.
Insurance for that common area.
Ah, okay.
All those shared costs getallocated.
Right.
Every skill month for a parkingspot my rental guests might use
for three days outta the yearit's a massive ongoing drain on
your net operating income.
For what?
For a feature that doesn'treally drive higher rental
rates.
That is the conclusion thedevelopers have reached an
(26:48):
assigned beaded spot does notmaterially increase your nightly
rental rate on platforms likeAirbnb or VRBO.
Especially if the building doesoffer some communal unassigned
parking as a general service oramenity.
So they usually have someparking just not tied to
specific units.
Often, yes, maybe an undergroundgarage with first come first
serve spots or valet parking.
(27:10):
That's usually sufficient forthe transient tourist market.
By excluding assigned deededparking from the individual
units, developers essentiallyeliminate a huge, unnecessary
recurring operating expense forthe investor.
It makes your unit inherentlymore profitable over the long
term.
It's a smart financial move.
Disguises a lack of a feature.
Okay.
Our final key question from theround table.
(27:30):
This one addresses design,control and personalization.
Can I modify my apartment wheninvesting in a pre-sale?
Mm-hmm.
A very common question,especially from investors who
are really thinking about.
Maximizing rental income throughspecific layouts, right?
They have an idea to make itfunction better for renters.
What kind of modifications aretypically requested?
Yes.
(27:50):
The requests are often frequentand quite specific.
They usually revolve aroundmaximizing the flexibility and
functionality of theseinvestment focus configurations.
Probably the most commontechnical request involves the
lock off unit.
Okay.
Let's define that term lock offfor the listener because it's
absolutely central to investmentproperty design.
In these tourist areas?
(28:10):
Sure.
A lock off unit is basically anarchitectural design feature.
It allows a single propertytitle, let's say, a two bedroom,
two bathroom apartment to bephysically split into two
completely separateindependently rentable sections.
How does that work?
Like two front doors, often?
Yes.
Or one main entrance leading toa small foyer with two internal
doors that can be lockedsecurely from both sides.
(28:32):
One section might function as aself-contained studio apartment,
maybe with its own entrance, asmall kitchenette and a
bathroom.
The other section would be themain unit, perhaps one bedroom
suite with the full kitchenliving area and another
bathroom.
I see.
So you own one apartment, butyou can rent it as two separate
units.
Exactly.
This allows the owner tomaximize occupancy and income
(28:53):
potential.
You could rent out both sectionsseparately to different parties,
or you could use one sectionyourself for your vacation and
rent out the other sectionsimultaneously.
It offers huge flexibility.
Got it.
So the modification requestsusually involve messing with
that lock off setup?
Precisely.
Common requests are things like,can you remove the lock off
dividing door and wall entirely?
(29:14):
Just make it one large standardtwo bedroom apartment.
Mm-hmm.
Maybe they don't want the rentalcomplexity or the opposite.
I'm buying two adjacent studio.
Can you add a connectinglockable internal door between
them?
So I can rent them together as atwo bedroom?
Sometimes or separately.
Other times room or sometimesmore fundamental changes.
Like this unit has a duallogoff, meaning two
(29:37):
kitchenettes.
I only plan to use it as asingle residence when I visit.
Can you remove the secondkitchenette entirely before you
build it?
Right.
So are these kinds of changesgenerally possible?
Generally, yes.
They can be possible.
But, and this is a huge, butonly under two extremely strict
conditions that are pretty muchuniversally dictated by the
(29:58):
developers.
Okay, lay them out for us.
Condition number one, timing.
Absolute critical timing.
Yes.
Modifications are only feasibleif you request them very, very
early in the constructionprocess.
We're talking when the projectis still basically lines on a
blueprint or maybe just startingthe structural gray work before
the walls really go up exactlybefore structural walls.
Electrical conduits, plumbinglines, and HVAC systems have
(30:21):
been installed according to thestandard plan.
Once those key systems are inplace, making changes becomes
incredibly cost prohibitive,risk, structural complications,
and causes major delays, notjust for your unit, but
potentially for the whole floor.
So if you buy later in theconstruction cycle, maybe six
months before delivery, theanswer to modifications is
(30:41):
almost certainly gonna be a firmpolite, no, this is just too
late.
You bought the standard plan atthat point.
Okay, timing is crucial.
What's condition number two?
You said it ensures commitment.
Correct.
Condition number two is thedeveloper's way of protecting
themselves and ensuring theclient is absolutely serious
about this non-standardexceptional request.
How do they do that?
(31:02):
Think about it from their side.
Modifications mean changingarchitectural blueprints,
dealing with specializedengineering approvals or
calculations.
Managing non-standard labor, onsite ordering custom materials,
perhaps all of this increasesthe developer's complexity,
risk, and potential for error,right?
It throws a wrench in theirstandardized process.
It does.
So they need absolute assurancethat the client requesting this
(31:25):
exceptional change is fullycommitted.
And won't back out later.
Leaving them stuck with a weirdcustomized unit that might be
harder to sell to the nextstandard buyer if the deal falls
through.
So how do they get thatassurance?
A bigger deposit, exactly.
Therefore, to even considerexecuting any significant
non-standard modification, thedeveloper will often require a
(31:47):
substantially higher initialdown payment for the buyer.
The figure mentioned in theroundtable was typically a
minimum of 50% down payment paidimmediately upon signing the
modified agreement, 50%.
Wow.
Okay.
That's serious skin in the game.
Yeah, it absolutely is.
Yeah.
It effectively locks the buyerin and covers the developer's
risk exposure for undertakingthe custom work.
No, 50% down, no custom changes.
(32:09):
Simple as that for most majormodifications.
So serious modification requiresserious financial commitment
upfront.
Even if you meet bothconditions, early request and
50% down, are there stilllimits?
Can I redesign the whole thing?
Oh, absolutely.
There are still firm limits.
The 50% down doesn't buy u carteblanche.
The limits are generallynon-negotiable, particularly
(32:29):
concerning anything structuralor anything that affects the
common areas or the building'sexterior appearance.
What kinds of things aredefinitely off limits?
Well, while internal, purelycosmetic changes after you take
delivery are usually allowed,like painting walls, changing
light fixtures, provided theydon't mess with structural
elements or plumbing changesrequested during construction
(32:51):
that break.
The visual aesthetic of thebuilding affects structural
integrity or impact.
Common elements are strictlydisallowed.
Always the example from theround table about ground floor
terraces that seemed tohighlight this perfectly.
Yes, that was a greatillustration.
Developers talked aboutinstances where owners of large
ground floor units, which oftencome with spacious private
patios or terraces.
All right.
(33:11):
A nice feature.
Those owners wanted to enclosetheir private terrace space with
permanent walls, windows, maybeeven a solid roof, essentially
trying to create an extrainterior room out of their
outdoor space.
I can see why someone might wantthat extra square footage.
Sure.
But that type of modification isinstantly rejected by
developers.
Why?
(33:32):
It's their private terra space,isn't it?
Yes.
But it fundamentally impacts thevisual harmony and architectural
integrity of the entire complex.
Imagine one ground floor unitsticking out with enclosed walls
while all the others are openterraces.
It looks terrible.
Plus it often blocks orsignificantly alters the view.
The light and the airflow forthe units directly above it.
(33:55):
Ah, okay.
Affects the neighbors,critically affects the neighbors
and the overall plan design.
The developer has an obligationto all owners and to the
building's overall aesthetic andvalue to maintain consistency
and enforce the originalarchitectural plan, especially
on exteriors and common facingelements, which brings us neatly
to what you call the build yourown house threshold.
(34:15):
Exactly.
You have to remember, you arebuying one unit within a mass
scale development.
These projects might have ahundred, 144, maybe even 300
plus units being builtsimultaneously.
It's a standardized productionprocess to some extent.
It has to be for efficiency andcost control.
So if you as a buyer come inwanting to relocate all the
(34:35):
major plumbing stacks or moveload-bearing walls, or demand
entirely non-standard exteriorfinishes or window types, or
insist on a completely differentinterior color scheme for
cabinetry and tile that thedeveloper doesn't offer, you've
basically missed the point ofbuying into a presale
development.
You've missed the point.
That's the reality.
Mass development prioritizesefficiency.
(34:58):
Speed, consistency andconformity to achieve economies
of scale.
If a client requires that levelof total concept change in
customization, they really needto recognize they're asking for
custom homebuilding, which is atotally different ball game,
totally different price point,timeline, and process.
It simply cannot be accommodatedwithin the context and
constraints of these large scalefast-paced investment property.
(35:21):
Projects, the limits onmodification are necessary for
the development and ultimatelyall the investors within it to
succeed on time and on budget.
So let's try and wrap this up.
What does this all mean?
We have, I think, successfullynavigated and really unpacked
seven absolutely foundationalquestions.
We've aimed to provide the kindof clarity that's necessary to
define the sort of rules ofengagement in this high velocity
(35:43):
real estate investment sector.
I think so.
We've established that the Fitiacomiso, while sounding complex,
essentially grants you fullbeneficial control and writes
over the asset.
The key caveat being that theunits established use
residential or commercial mustbe strictly respected.
Can't change that.
And we saw that contractualprotection against those dreaded
(36:04):
construction delays, it'squantified.
It usually involves that graceperiod buffer, followed by a
specific monthly financialcompensation, a penalty, often
based on the unit's total value.
If delays extend beyond thatbuffer and financially, we
clarified that buying early,taking that construction risk,
well, it aims to secure roughlya 20% to 30% potential profit
(36:24):
margin or appreciation by thetime of delivery.
That's the reward.
And crucially, the cost side, weabsolutely must budget
approximately 7% of thetransaction value for those
necessary external closing andtitling costs.
But the good news is we learnedthat this lump sum can often be
strategically rolled into amortgage loan to.
Ease the immediate cash crunchat closing.
(36:46):
Mm-hmm.
We also dissected some of thecommercial rationale behind
developer policies.
Understanding that a low flatfee for administrative reselling
isn't just nice.
It actively fosters investorliquidity in turn, which can be
part of their model.
Yeah, that was insightful.
Those design choices, likeavoiding assigned deeded
parking, they aren't arbitrary.
They're usually very calculatedfinancial moves.
(37:07):
Designed specifically tominimize your recurring monthly
maintenance costs, therebyboosting your long-term net
rental income potential withoutreally sacrificing rental value
in the tourist market.
Having this level of detail,these insights in your arsenal
as an investor, I mean, it feelslike the difference between
operating on gut feeling orintuition and operating like a
seasoned, calculatedprofessional who understands the
(37:29):
game.
It really is.
You now know the rules, youunderstand the key risks better.
And you can spot the strategicopportunities and the potential
pitfalls much more clearly, youknow the landscape.
And perhaps to leave you ourlistener with a final,
provocative thought to exploreon your own as you do your due
(37:49):
diligence.
Okay, let's hear it.
While the contract, the writtenword is legally binding
regarding things like delay,penalties and grace periods.
Perhaps the ultimate form of duediligence.
The one that transcends eventhat written contract is digging
into the developer's actualreputation, and more
importantly, their documentedpast actions.
How they behaved previouslyexactly.
(38:12):
Go beyond simply confirming thata penalty clause exists in the
contract.
Ask around investigate, did theyactually support those
administrative resales smoothlyand with that low fee during
their last project?
Or did they drag their feet andcomplicate the process despite
what the contract allowed?
Hmm, when the pandemic hit andcaused massive disruption, how
did they actually treat theirclients regarding delays in
(38:33):
compensation?
Were they fair?
Were they proactive?
Or did they hide behind the bareminimum letter of the contract?
So look at the track record ofbehavior, not just the promises
on paper.
Precisely exploring theirdocumented past behavior,
talking to previous buyers ifpossible.
That provides perhaps the mostcomprehensive layer of security
(38:54):
and confidence when you'redealing with these highly
variable factors like potentialconstruction timelines, and the
administrative ease oftransferring your rights.
It's about assessing theircharacter and integrity, which
often tells you more than thelegalese alone.
Okay, let's unpack this.
We are diving into a treasurechest of real estate knowledge
today.
And this isn't just theory.
No, not at all.
Our sources come directly from ahigh level investor q and a
round table, And this wasn'tsome casual presentation.
This was.
Seven industry heavyweights,tackling the most immediate,
critical questions thatinvestors both foreign and
(00:22):
domestic need answered rightnow.
Yeah.
Specifically about buyingproperty in, you know, those
high demand tourist zones.
That's absolutely right.
And our mission for you, thelearner, is really to bypass
weeks of reading, cut straightto the actionable insights, yet
the cheat sheet, basically,pretty much we're extracting the
essential knowledge nuggets thatclarify.
Legal certainty definecontractual protections and
(00:44):
expose those subtle but crucialhidden costs that often surprise
new buyers.
Oh yeah, those always get you.
They do.
So we've structured this deepdive around the seven most
pressing questions posed tothese experts during that round
table, and we're gonna covereverything from that.
Let's be honest, sometimesconfusing legal figure of the fi
miso.
Definitely a point of confusion.
(01:05):
All the way to the maybesurprising financial calculation
behind why your investment condolikely doesn't have its own
assigned parking spot, right?
Seems counterintuitive, butthey're logic.
We need to jump right in becausethese details, they really
define the high risk, highreward nature of this sector,
don't they?
They absolutely do.
Yeah.
Understanding these points iskey.
(01:26):
Okay, let's start with thecornerstone question.
Especially for any internationalbuyer looking at coastal
property.
If I buy through Fideicomiso, atrust is the apartment mine.
Hmm.
Yeah.
That's the big one.
This fear of not truly owningthe property.
I think it's probably the singlegreatest psychological hurdle
for non-nationals entering thismarket.
It's a fundamental question andit pops up because the legal
(01:49):
structure, well, it's complex.
It's rooted in history.
What's fascinating here is thatthe fi miso exists precisely
because of geographicalrestrictions.
One's established decades ago.
Ah, the restricted zone.
Exactly.
We're talking about restrictedzones, areas generally defined
as being within, uh, about ahundred kilometers, the national
border, or 50 kilometers of thecoastline.
(02:10):
Yes, give or take.
And historically, those zoneswere restricted for like
national security andsovereignty reasons, wasn't it?
To prevent foreign control of.
Key areas precisely.
They were considered sensitiveareas and direct title ownership
by non-nationals was prohibitedback then.
So the Fiko Mezo emerged as thelegal workaround, or the legal
(02:32):
figure, as they often call it,that allows foreign investment
to flow into these really primelocations while still
technically complying with thosehistorical land laws.
Okay, so let's break down thetrust structure simply.
Who are the players involved?
Like who's who in this setup?
Sure.
You basically have three keyroles.
Mm-hmm.
First, there's the fi ante.
That's usually the developer orthe seller, the one who
(02:52):
transfers the property into thetrust.
Second, you have the fiduciary.
This is the institutionaltrustee.
It's always a certified Mexicanbank.
They legally hold the title.
The paper title, the bank holdsthe title.
Got it.
And the third.
The third is you the investor.
You are the fide cesario.
That's the beneficiary of thetrust and this beneficiary
(03:13):
status.
That's the key to the ownershipquestion.
Right?
So while the bank technicallyholds the what?
The naked legal title, that'sthe term.
Yeah.
Naked title.
What rights does the investor,the beneficiary actually
possess?
What can you do?
Okay, so the investor retainsall the essential rights of
ownership.
It's often called these theBeneficial rights, beneficial
rights, which means you have theright to use and enjoy the unit.
(03:36):
You can live in it yourself.
You can lease it out for profit,long-term, short-term vacation
rentals, whatever.
Okay, and crucially.
You have the right to sell yourbeneficial interest whenever you
want.
You can transfer it.
You can inherit it.
So for all intents and purposes,you control the asset, you reap
the financial rewards, and youalso bear the risks associated
with ownership.
(03:56):
It functions like directownership in practice.
It sounds like the legalstructure is a difference, but
maybe not a practicaldistinction for the investor's
day-to-day control, as long asthey play by the rules.
That's a good way to put it.
And speaking of rules, theexperts at the round table were
very, very clear about onenon-negotiable legal limitation
is tied to property use.
(04:17):
Well, yes, that's the criticalcompliance point, the designated
use of the property.
What does that mean exactly?
It means if the property wasacquired with permits for
residential use, and thatusually covers both personal
residency and vacation rentals.
You cannot legally just decideto alter that to commercial use.
So no opening a shop, no openinga storefront or an office space
(04:38):
or say a medical clinic, not ifit was permitted as a
residential and vice versa.
Of course.
Let me push on that.
Say I'm an investor, I bought areally large ground floor unit.
Why can't I just decide, youknow, I'm gonna turn this into a
private high-end dentist'soffice.
Isn't that my prerogative if Ihave those beneficial rights?
That's a great question and it'swhere municipal rules and the
(04:59):
project's own planning rulesintersect with your beneficial
rights.
Ah, okay.
The bank holding the fi miso,they have obligations.
And the homeowners associationstructure, the condo regime,
they're also obligated toenforce the original permitting,
right?
Changing the use, say fromresidential to commercial.
It changes everything.
The density calculations, theinfrastructure demands, water,
(05:23):
electricity, usage patterns,even the tax structure for the
property, and sometimes thewhole building.
It's not just your unit inisolation.
Exactly.
If the development was permittedfor, say, 144 residential units,
one owner can't justunilaterally compromise that
legal designation for the entirebuilding.
Yeah.
Sense.
Nor can they disrupt theenvironment for the other owners
(05:44):
who specifically bought into aresidential concept.
You can't have drills buzzingnext door if you bought a
vacation condo.
Okay.
So the key takeaway here is.
You get certainty of rights,very similar to direct
ownership, but you absolutelymust adhere strictly to the
unit's designated purpose.
That's it.
Get that clear before you writeany checks.
(06:05):
Essential clarity, right?
Moving from those legalfoundations to managing risk.
The next investor question, thisone strengths, right at the
heart of presale anxiety.
What happens if I buy, but theconstruction gets delayed?
Mm-hmm.
A million dollar questionsometimes, literally, right?
Every investor buying off planis betting on the future
delivery date.
A delay means lost rental incomecapital tied up.
(06:28):
It's stressful.
It absolutely is.
Yeah.
And this is where doing yourhomework, your due diligence on
the developer's track recordbecomes your very first line of
defense as so well, theRoundtable discussion featured
developers who were able to citespecific examples.
They weren't just saying, trustus.
They pointed to delivering theSerena project during the
immense difficulty of thepandemic shutdown.
(06:48):
Wow.
Okay.
That's a stress test.
Huge stress test, orsuccessfully completing other
projects like Costa Celeste in aStudio 34, maybe on time, maybe
even a bit early.
This history, it suggests alevel of commitment and
capability that goes beyond justfavorable market conditions.
Reputation is good.
(07:09):
Absolutely.
The cold hard reality checkcomes down to what's actually
written in the purchase promiseagreement.
The contract 100%.
Where does that contract providethe actual protection when
unavoidable delays happen?
You know, things like majorhurricanes, supply chain
disruptions, labor shortages.
Mm-hmm.
Stuff happens.
The contract is your ultimatesafeguard, or it should be.
Yeah.
(07:29):
And what's interesting here isthis sort of.
Two tiered system they generallyemploy to handle delays, two
tiers.
Okay.
First, the contract has tostipulate a clear promise
delivery date that sets theinitial expectation standard
enough, but critically, italmost always includes a defined
grace period.
This period is pretty standardacross the industry, typically
(07:50):
ranging from, say, three months,up to maybe six months.
Okay?
So that grace period acts as abuffer.
Like a built-in allowance forunforeseen issues.
Precisely.
If the developer delays for say,five months, and the grace
period in the contract to sixmonths.
Well, technically they haven'tbreached the delivery agreement
yet.
Got it.
It accounts for thoseextraordinary events, true force
(08:12):
majeure things genuinely beyondthe reasonable control of the
development team.
But, and this is the crucialpart.
What happens if they blow pastthat grace period?
Exactly.
What happens if the delayextends past that safety net?
This is where the financialcompensation is supposed to kick
in the penalty clause.
Okay.
Tell us what that compensationlooks like.
We need actionable numbers here,not just vague promises of
(08:34):
you'll be compensated.
Sure.
The experts confirmed that ifthe delay does extend beyond
that grace period, the client iscompensated usually with
interest payments.
Now the exact figure iscontractual.
It varies naturally, but thetypical range cited in the
market discussion was oftenbetween say 0.75% and maybe 1.5%
(08:54):
monthly.
Monthly.
Okay.
Monthly.
And it's usually calculatedbased on the total purchase
value of the unit sometimes.
Though less common.
It might be based on theaccumulated amount the client
has already paid towards theunit, right?
But that percentage, whatever itis, is paid for each accumulated
month of delay after the graceperiod expires.
Okay, let's make that concrete.
(09:14):
If I bought a$200,000 apartmentand the developer is now saved
four months past the six monthgrace period, so 10 months total
delay from the original date,right, and the contract says 1%
per month penalty on the totalpurchase value, that means they
owe me$2,000 per month,$2,000per month.
For each of those four monthspast the grace period.
So$8,000 total in this example.
(09:35):
Correct.
That provides a clear financialincentive, a penalty for the
developer to avoid thoseextended delays.
But there's always a, but is ittruly perfect for the buyer?
Does that$8,000 really make mewhole?
Well, that raise is a reallyimportant consideration for you.
The learner, while it is definedcompensation, and it definitely
(09:56):
constitutes a penalty on thedeveloper, the investor has to
calculate whether that penalty.
Truly covers their own financialimpact.
Meaning if you are banking onimmediate high yield vacation
rental income starting the monthafter the grace period ended,
does that 1% penalty that$2,000a month actually cover your lost
cashflow potential?
Yeah.
(10:16):
Maybe your projected net rentalincome was$3,000 a month.
Ah, so the penalty might coverthe inconvenience and the cost
of having my capital tied up,but it might not fully replace
the lost opportunity.
Income exactly.
The investor relying on a harddelivery date for immediate
rental revenue.
While you need to understandthat you are taking a calculated
risk, even with this penaltyclause in place, it mitigates
(10:36):
but may not eliminate thefinancial downside of a delay.
So the contract lays out therules of the game, the penalty
structure, but the takeaway isyou should always, always
consult your own legal advice.
Absolutely.
Yeah.
Review the terms carefully.
Is the grace period reasonable?
Is the penalty percentage fair?
How does a calculated totalvalue or paid amount?
(10:56):
That's what the experts reallyemphasized.
If something about the guaranteeor the penalty structure just
doesn't sound right or feelrobust enough, red flag.
Big red flag.
Yeah.
Exercise extreme caution.
Read the fine print.
Okay.
Let's shift gears a bit to theupside the profit potential.
Question number three gets rightto it.
What price do you project for myapartment at the time of
(11:17):
delivery?
Mm-hmm.
The big payoff question, this isreally what separates presale
investment from just buying aproperty that's already finished
and ready to go, isn't it?
It is.
This is pure market strategy andrisk assessment.
The projected appreciation, thepotential gain in value, it's
directly linked to the risk you,the investor, assume during that
construction phase.
(11:38):
So the timing of when you jumpin is everything.
It's critical.
It determines the size of thediscount you receive compared to
the final market price.
If you buy very early, maybefriends and family or the
initial launch phase, you'rebasically providing the
developer with seed money.
Or early construction financing.
Your capital is available whentheir risk is absolutely the
(11:59):
highest.
Exactly right.
You're taking on the mostuncertainty and the market in
theory, compensates you fortaking that higher risk.
So how much compensation are wetalking?
What's the typical discount orappreciation potential The
roundtable discussion provided avery concrete metric that these
developers often use as atarget.
They typically launch newprojects at prices projected to
be somewhere between 20% to 30%lower than the prices of
(12:22):
comparable properties that arealready finished titled and
ready for immediate delivery inthat same competitive area.
Wow.
Okay.
20 to 30% just baked in bybuying, say, two years before
delivery.
That's a huge incentive.
It's a massive incentive.
It's the primary driver forpresale investment.
How do they maintain thatspread?
Is it guaranteed?
Well, guaranteed is a strongword in real estate, but it's
(12:45):
managed.
It's a delicate balancing actbased on really rigorous market
studies of the area.
The appreciation isn't random.
Developers strategicallyincrease their list prices as
construction milestones are hit.
Ah, so the price goes upincrementally.
Yes.
Maybe a price bump when thefoundations are poured another,
when the structure's topped offanother, when finishing details
(13:07):
begin, they manage the pricelist upwards during the
construction period.
I see that initial 20% to 30%gap is carefully calculated.
It needs to be attractive enoughto bring in that essential early
stage capital from investorslike you.
It also has to ensure that whenthe units are finally delivered,
their final list price iscompetitive with the existing
immediately cash flowinginventory next door.
(13:30):
So they don't price themselvesout of the market at the end.
Exactly.
If the initial discount gap weretoo small, why would early
investors take the risk?
If it were way too large, thefinal price might be
unsustainable or signaldesperation.
It's strategic pricing.
Okay, so let's run another quicknumber.
If I buy a unit at launch forsay,$150,000, and based on the
(13:50):
market and the developer's plan,that same property is priced at
$195,000.
I've potentially gained$45,000in equity.
Just on paper before I even payclosing costs or collect a dime
of rental revenue, that is thecore driver for the aggressive
presale investor profile.
That's the goal.
Your initial profit isessentially realize the moment
that construction riskevaporates, which happens when
(14:13):
the project reaches completionand is ready for delivery
precisely.
The high reward component of thestrategy is capturing that
construction phase appreciation,Alright.
Now for the, uh, maybe lessexciting, but absolutely
necessary reality check thefinancial buzzkill, perhaps.
Ah, yeah.
Gotta face the music sometime.
Question number four, whatclosing costs should I budget
for besides the actual purchaseprice?
(14:35):
Nobody wants to get to thefinish line, ready to get the
keys, and then get hit with asurprise bill for thousands of
dollars they didn't plan for.
No, that's a terrible surprise.
And this is just foundationalstuff for accurate budgeting.
You have to know this number inKaroo where many of these
tourist developments are, right?
Like Cancun, Tulum, Pade,Carmen.
Exactly.
The consensus among the expertsat the round table and.
(14:58):
Generally in the market is thatthe estimated budget for all
your closing and titling costsis approximately 7% of the
transaction value.
7%.
Okay.
And the really key thing tounderstand here is that this
money is paid externally.
It's not going to the developer,right?
It's not part of their profitmargin.
No.
It's going to the go.
Federal state, municipal, and tothe notary public for their
(15:20):
services.
Okay.
Let's use a simple simulationagain to make that 7% feel real.
If I secured that, say,$200,000unit we talked about earlier,
Hmm.
7% of$200,000 is$14,000.
Correct.
So I need to have$14,000 in cashready to go completely separate
from my down payments and thefinal installment payment on the
unit itself.
And this is due right atclosing?
(15:41):
Pretty much, yes.
Right.
When you're finalizing thepurchase and getting the title.
It is a significant lump sumthat needs to be factored into
your total investmentcalculation from day one.
It absolutely is.
So you the learner, you need toknow exactly where that$14,000
in this example is actuallygoing.
Can you break down thecomponents of that 7%?
(16:03):
Sure.
It covers a number of mandatorydistinct things.
First, you have the notary feesor notary public rights.
You're paying for theirprofessional services.
They conduct the legal duediligence, verify documents,
calculate taxes, and officiatethe signing of the deed,
ensuring the whole transactionhas legal validity.
Okay, the notary's cut.
Makes sense.
Second.
(16:23):
There are public registrationfees.
This is the cost to officiallyrecord your new title in the
Public Registry of Property,makes it official effective.
Try it.
Government record keeping.
Third, you have various localtaxes.
This bundle includes state andmunicipal fees, and the most
significant chunk of this isusually the acquisition tax.
Locally, it's known as the ISA.
The ISA.
(16:43):
Okay.
Let's define that because itsounds important.
How is that acquisition taxcalculated and why is it such a
big piece of the 7% I a I standsfor in Sore acquisi, the in web
tax on the acquisition of realestate, it's primarily estate
tax, though municipalities mighthave related fees.
Mm-hmm.
Its calculation basis can varyslightly by state, but it
(17:05):
usually hinges on whichevervalue is highest out of three.
One, the official governmentassessed value the castral
value.
Two, a formal commercialappraisal value if one is done,
or three, the actual transactionprice stated in the contract.
Whichever's highest.
Usually yes.
They take the highest value tomaximize the tax revenue.
And this ISAI, it's typicallythe largest single component
(17:27):
within that overall 7% budget.
You're essentially paying thestate a percentage for the
right, the privilege ofacquiring that real estate
asset.
Okay, that makes sense.
Taxes and fees paid right at thevery end, once the property is
ready for delivery and the titleis being transferred.
Correct upon titling.
But you mentioned earlier theremight be a strategic financing
tip, something that could easethe burden of that$14,000 lump
(17:48):
sum.
Yes.
And this is a really criticalmaneuver for investors who want
to.
Maximize their liquidity.
Keep more cash on hand if you'refinancing a portion of your
property purchase with amortgage loan, which many
investors do, especially foreignbuyers, right?
Many banks, not all, but many,will allow the buyer to roll
these closing costs that entire7% package into the long term
(18:12):
mortgage financing.
Ah.
So instead of needing that$14,000 in cash, immediately at
closing, you add it to your loanprinciple.
And you pay it off graduallyover the 10, 15, or 20 year term
of your mortgage.
Along with your main loanpayments, that dramatically
lowers the immediate cashrequirement right at the moment
you take possession.
That could be a lifesaver forsome investors.
(18:34):
Cash flow planning, it reallycan be.
It makes the entry point muchsmoother financially.
Definitely something to ask yourmortgage broker about.
Good tip.
We also need to clarify thedistinction between buyer and
seller responsibilitiesregarding all these costs and
paperwork.
It can get confusing.
Yes.
It often confuses first timebuyers, so let's be clear.
You the buyer paid that 7%titling package to put the
(18:57):
property into your name, right,the cost of becoming the new
owner, the developer, acting asthe seller has responsibilities
too.
They must provide numerouscertificates and documents
proving the property is cleanand ready for transfer.
Like what kind of certificates?
Things like certificates.
Confirming the property is freeof any liens or encumbrances.
Certificates showing that allexisting property taxes are paid
(19:20):
up to date clearances for waterand other utility connections
proving there are no outstandingdebts.
Okay.
The seller generally bears theinitial administrative costs to
obtain these clearance documentsto prove the property is
sellable.
You the buyer, then pay the 7%package required to actually
execute the transfer andofficially switch the name on
the title deed Seller.
(19:41):
Cleans the slate.
Buyer pays to write their nameon it.
That's a pretty good analogy.
Alright, let's move into somemore strategic plays.
This next question is a puremeasure of investor flexibility
and frankly, playing the market.
Can I resell my unit before theofficial delivery?
And if so, what is the cost?
Ah, the flip before you finishstrategy.
Exactly.
(20:01):
This allows those earlyinvestors to capitalize on that
20% to 30% appreciation.
We talked about potentiallywithout ever incurring those 7%
closing costs because they neveractually take title.
This is definitely the hallmarkof the high velocity, often more
experienced real estate investorprofile.
Their goal isn't necessarily tohold and rent.
(20:22):
It's to capture thatconstruction equity quickly and
then cycle that capital into thenext hot pre-sale launch.
Makes sense.
So what's the general answer?
Can you do it?
The general consensus from theexperts was, yes, reselling or
more accurately transferringyour contract rights is
generally accepted by mostdevelopers, but there's a key
timing element.
You typically must initiate andcomplete this transfer process
(20:43):
before the official titling andunit delivery process has
formally begun for your specificunit.
Once that final stage starts, itusually becomes much more
complicated, Okay, so timing iscritical.
Administratively.
How does the developer actuallyhandle this trans full of
interest?
Is it like they just cross outmy name on the contract and
write in the new buyer's name?
(21:03):
Huh?
No, it's usually a bit moreformal than that to maintain
legal purity and avoid issuesdown the line.
Figured the procedure describedby the developers is typically a
formal termination of theoriginal purchase promise
agreement with you, the firstbuyer.
Okay.
Tear up the old one,essentially, and then the
generation of a completely new.
Fresh purchase promise agreementdirectly with the new buyer.
(21:26):
I see a clean break.
Exactly.
This clean break ensures there'sno lingering liability for the
developer related to the firstcontract, and it establishes a
clear contractual timeline andset of obligations for the
second buyer starting fromscratch.
Okay, that makes sense legally.
Now let's analyze the cost.
This was fascinating.
Instead of charging, say apercentage of the appreciative
(21:47):
value, which could be asubstantial amount, if the price
went up 30% right, a percentageof the reseal price, the
developer example, cited in thesource groupo to sewer
apparently charges just a flatadministrative fee only MXN
$25,000.
That's roughly what, 1500 USdollars around that?
Yeah, depending on the exchangerate, why would the Phoebe so
(22:08):
low and why flat instead of apercentage?
That seems almost generous.
This is probably the mostfascinating nugget of commercial
strategy we pulled from thatdiscussion.
Think about it, a highpercentage fee, say 5% or more
of the resale price, what wouldthat do?
It would eat significantly intothe first investor's profit.
Right.
It would penalize the investorfor flipping.
(22:29):
Yeah.
And discourage these kinds ofearly exits.
Mm-hmm.
It would slow down capitalmovement by charging a
deliberately low flatadministrative fee, just enough
to cover their paperwork andmaybe a tiny bit more.
The developer is sending a clearsignal.
They're implicitly saying theysupport and even encourage this
type of investor churn.
(22:49):
fosters goodwill with themarket.
It attracts the experienced highvolume investors who value
liquidity and low friction, lowoverhead administrative
processes.
Mm-hmm.
For this type of developer, it'sactually a key part of their
business model.
If they get their initial saleprofit locked in early, they
keep inventory moving and theybuild relationships with repeat
investors.
Exactly.
It's a calculated decision.
They attract serious investorswho provide that crucial early
(23:11):
capital, and these investorsdon't tie up inventory for the
long haul.
If the developer benefits fromthe initial sale may be
subsequent sales, if the unithad slipped again, well, the
initial investor achieves theirfinancial goal, realize the
equity gain without theheadache, and more importantly,
the significant expense of the7% closing costs.
Yeah, it's a win-win structuredthat we deliberately Okay.
(23:32):
This next one is the perfectpractical aha moment.
It really highlights thedifference between investing in
tourist focused condos versusbuying a traditional residential
home.
Question six.
Why doesn't the real estatedevelopment have assigned
parking spaces?
Mm-hmm.
This throws people off,especially if they're used to
North American or Europeanresidential markets where deeded
parking is almost alwaysstandard.
(23:53):
So why is it different here?
The decision is driven almostpurely by maximizing the return
on investment for you, theowner, and maintaining
competitiveness in the vacationrental market.
It boils down to an economicequation.
these developments focus almostentirely on vacation rentals,
short-term stays, right?
They're not primarily forfull-time residents.
(24:13):
Exactly.
Which means the end user, theAirbnb guest, the hotel guest,
staying for a week hasfundamentally different
transportation habits and needsthan someone living there
permanently.
Okay.
Explain that difference.
Right.
So reason number one is simplylower demand from the user.
Tourists staying in prime,walkable tourist areas often
rely on well walking or maybescooters, taxis, uber
(24:37):
prearranged, airport shuttles.
They don't always rent a car fortheir whole stay, correct.
They simply don't rent carsoften enough or rely on them
heavily enough to justify thedeveloper building and the
investor paying for hundreds ofdedicated individually deeded
parking spots.
That's reason one.
Usage patterns.
Okay.
And reason two, you said it waseconomic.
Reason two is the decisivefinancial impact on the
(25:00):
investor.
If parking were assigned anddeeded, this is where the
savings really accumulate foryou by not having one.
Okay.
Break down the true cost ofadding an assigned deeded
parking spot to my condo unit,because it sounds like more than
just the concrete.
Oh, much more.
First, remember, a standardparking spot is maybe 12 to 15
square meters of actual land orconstructed space.
(25:23):
Right.
That one simple addition,deeding that space to your unit
impacts your costs in at leastthree significant ways.
One higher purchase price forthe unit.
Initially, the developer has tocharge you for the cost of that
land and the construction costsassociated with building that
parking space.
Whether it's surface level orstructured underground, it adds
(25:43):
directly to your acquisitioncost.
Makes sense.
Pay for the space.
Two.
Higher closing costs.
Remember that 7% we just talkedabout?
Yeah.
Calculated on the transactionvalue.
Exactly.
If your unit now includes anextra square meters of deeded
parking space, the officialvalue of your property is
higher, so your 7% closing costbudget just increased, because
you're titling more squaremeters.
(26:04):
Ouch.
Okay.
Higher closing costs.
What's the third hit?
Third, and this is often thebiggest long-term drag,
increased maintenance fees yourmonthly HOA or condo fees.
How does parking affect HOAfees?
That extra square footage, evenif it's just a painted spot in
an underground garage, itrequires upkeep.
Lighting cleaning securitypatrols, or cameras monitoring
(26:25):
it, repainting lines, concretemaintenance or repairs over
time.
Insurance for that common area.
Ah, okay.
All those shared costs getallocated.
Right.
Every skill month for a parkingspot my rental guests might use
for three days outta the yearit's a massive ongoing drain on
your net operating income.
For what?
For a feature that doesn'treally drive higher rental
rates.
That is the conclusion thedevelopers have reached an
(26:48):
assigned beaded spot does notmaterially increase your nightly
rental rate on platforms likeAirbnb or VRBO.
Especially if the building doesoffer some communal unassigned
parking as a general service oramenity.
So they usually have someparking just not tied to
specific units.
Often, yes, maybe an undergroundgarage with first come first
serve spots or valet parking.
(27:10):
That's usually sufficient forthe transient tourist market.
By excluding assigned deededparking from the individual
units, developers essentiallyeliminate a huge, unnecessary
recurring operating expense forthe investor.
It makes your unit inherentlymore profitable over the long
term.
It's a smart financial move.
Disguises a lack of a feature.
Okay.
Our final key question from theround table.
(27:30):
This one addresses design,control and personalization.
Can I modify my apartment wheninvesting in a pre-sale?
Mm-hmm.
A very common question,especially from investors who
are really thinking about.
Maximizing rental income throughspecific layouts, right?
They have an idea to make itfunction better for renters.
What kind of modifications aretypically requested?
Yes.
(27:50):
The requests are often frequentand quite specific.
They usually revolve aroundmaximizing the flexibility and
functionality of theseinvestment focus configurations.
Probably the most commontechnical request involves the
lock off unit.
Okay.
Let's define that term lock offfor the listener because it's
absolutely central to investmentproperty design.
In these tourist areas?
(28:10):
Sure.
A lock off unit is basically anarchitectural design feature.
It allows a single propertytitle, let's say, a two bedroom,
two bathroom apartment to bephysically split into two
completely separateindependently rentable sections.
How does that work?
Like two front doors, often?
Yes.
Or one main entrance leading toa small foyer with two internal
doors that can be lockedsecurely from both sides.
(28:32):
One section might function as aself-contained studio apartment,
maybe with its own entrance, asmall kitchenette and a
bathroom.
The other section would be themain unit, perhaps one bedroom
suite with the full kitchenliving area and another
bathroom.
I see.
So you own one apartment, butyou can rent it as two separate
units.
Exactly.
This allows the owner tomaximize occupancy and income
(28:53):
potential.
You could rent out both sectionsseparately to different parties,
or you could use one sectionyourself for your vacation and
rent out the other sectionsimultaneously.
It offers huge flexibility.
Got it.
So the modification requestsusually involve messing with
that lock off setup?
Precisely.
Common requests are things like,can you remove the lock off
dividing door and wall entirely?
(29:14):
Just make it one large standardtwo bedroom apartment.
Mm-hmm.
Maybe they don't want the rentalcomplexity or the opposite.
I'm buying two adjacent studio.
Can you add a connectinglockable internal door between
them?
So I can rent them together as atwo bedroom?
Sometimes or separately.
Other times room or sometimesmore fundamental changes.
Like this unit has a duallogoff, meaning two
(29:37):
kitchenettes.
I only plan to use it as asingle residence when I visit.
Can you remove the secondkitchenette entirely before you
build it?
Right.
So are these kinds of changesgenerally possible?
Generally, yes.
They can be possible.
But, and this is a huge, butonly under two extremely strict
conditions that are pretty muchuniversally dictated by the
(29:58):
developers.
Okay, lay them out for us.
Condition number one, timing.
Absolute critical timing.
Yes.
Modifications are only feasibleif you request them very, very
early in the constructionprocess.
We're talking when the projectis still basically lines on a
blueprint or maybe just startingthe structural gray work before
the walls really go up exactlybefore structural walls.
Electrical conduits, plumbinglines, and HVAC systems have
(30:21):
been installed according to thestandard plan.
Once those key systems are inplace, making changes becomes
incredibly cost prohibitive,risk, structural complications,
and causes major delays, notjust for your unit, but
potentially for the whole floor.
So if you buy later in theconstruction cycle, maybe six
months before delivery, theanswer to modifications is
(30:41):
almost certainly gonna be a firmpolite, no, this is just too
late.
You bought the standard plan atthat point.
Okay, timing is crucial.
What's condition number two?
You said it ensures commitment.
Correct.
Condition number two is thedeveloper's way of protecting
themselves and ensuring theclient is absolutely serious
about this non-standardexceptional request.
How do they do that?
(31:02):
Think about it from their side.
Modifications mean changingarchitectural blueprints,
dealing with specializedengineering approvals or
calculations.
Managing non-standard labor, onsite ordering custom materials,
perhaps all of this increasesthe developer's complexity,
risk, and potential for error,right?
It throws a wrench in theirstandardized process.
It does.
So they need absolute assurancethat the client requesting this
(31:25):
exceptional change is fullycommitted.
And won't back out later.
Leaving them stuck with a weirdcustomized unit that might be
harder to sell to the nextstandard buyer if the deal falls
through.
So how do they get thatassurance?
A bigger deposit, exactly.
Therefore, to even considerexecuting any significant
non-standard modification, thedeveloper will often require a
(31:47):
substantially higher initialdown payment for the buyer.
The figure mentioned in theroundtable was typically a
minimum of 50% down payment paidimmediately upon signing the
modified agreement, 50%.
Wow.
Okay.
That's serious skin in the game.
Yeah, it absolutely is.
Yeah.
It effectively locks the buyerin and covers the developer's
risk exposure for undertakingthe custom work.
No, 50% down, no custom changes.
(32:09):
Simple as that for most majormodifications.
So serious modification requiresserious financial commitment
upfront.
Even if you meet bothconditions, early request and
50% down, are there stilllimits?
Can I redesign the whole thing?
Oh, absolutely.
There are still firm limits.
The 50% down doesn't buy u carteblanche.
The limits are generallynon-negotiable, particularly
(32:29):
concerning anything structuralor anything that affects the
common areas or the building'sexterior appearance.
What kinds of things aredefinitely off limits?
Well, while internal, purelycosmetic changes after you take
delivery are usually allowed,like painting walls, changing
light fixtures, provided theydon't mess with structural
elements or plumbing changesrequested during construction
(32:51):
that break.
The visual aesthetic of thebuilding affects structural
integrity or impact.
Common elements are strictlydisallowed.
Always the example from theround table about ground floor
terraces that seemed tohighlight this perfectly.
Yes, that was a greatillustration.
Developers talked aboutinstances where owners of large
ground floor units, which oftencome with spacious private
patios or terraces.
All right.
(33:11):
A nice feature.
Those owners wanted to enclosetheir private terrace space with
permanent walls, windows, maybeeven a solid roof, essentially
trying to create an extrainterior room out of their
outdoor space.
I can see why someone might wantthat extra square footage.
Sure.
But that type of modification isinstantly rejected by
developers.
Why?
(33:32):
It's their private terra space,isn't it?
Yes.
But it fundamentally impacts thevisual harmony and architectural
integrity of the entire complex.
Imagine one ground floor unitsticking out with enclosed walls
while all the others are openterraces.
It looks terrible.
Plus it often blocks orsignificantly alters the view.
The light and the airflow forthe units directly above it.
(33:55):
Ah, okay.
Affects the neighbors,critically affects the neighbors
and the overall plan design.
The developer has an obligationto all owners and to the
building's overall aesthetic andvalue to maintain consistency
and enforce the originalarchitectural plan, especially
on exteriors and common facingelements, which brings us neatly
to what you call the build yourown house threshold.
(34:15):
Exactly.
You have to remember, you arebuying one unit within a mass
scale development.
These projects might have ahundred, 144, maybe even 300
plus units being builtsimultaneously.
It's a standardized productionprocess to some extent.
It has to be for efficiency andcost control.
So if you as a buyer come inwanting to relocate all the
(34:35):
major plumbing stacks or moveload-bearing walls, or demand
entirely non-standard exteriorfinishes or window types, or
insist on a completely differentinterior color scheme for
cabinetry and tile that thedeveloper doesn't offer, you've
basically missed the point ofbuying into a presale
development.
You've missed the point.
That's the reality.
Mass development prioritizesefficiency.
(34:58):
Speed, consistency andconformity to achieve economies
of scale.
If a client requires that levelof total concept change in
customization, they really needto recognize they're asking for
custom homebuilding, which is atotally different ball game,
totally different price point,timeline, and process.
It simply cannot be accommodatedwithin the context and
constraints of these large scalefast-paced investment property.
(35:21):
Projects, the limits onmodification are necessary for
the development and ultimatelyall the investors within it to
succeed on time and on budget.
So let's try and wrap this up.
What does this all mean?
We have, I think, successfullynavigated and really unpacked
seven absolutely foundationalquestions.
We've aimed to provide the kindof clarity that's necessary to
define the sort of rules ofengagement in this high velocity
(35:43):
real estate investment sector.
I think so.
We've established that the Fitiacomiso, while sounding complex,
essentially grants you fullbeneficial control and writes
over the asset.
The key caveat being that theunits established use
residential or commercial mustbe strictly respected.
Can't change that.
And we saw that contractualprotection against those dreaded
(36:04):
construction delays, it'squantified.
It usually involves that graceperiod buffer, followed by a
specific monthly financialcompensation, a penalty, often
based on the unit's total value.
If delays extend beyond thatbuffer and financially, we
clarified that buying early,taking that construction risk,
well, it aims to secure roughlya 20% to 30% potential profit
(36:24):
margin or appreciation by thetime of delivery.
That's the reward.
And crucially, the cost side, weabsolutely must budget
approximately 7% of thetransaction value for those
necessary external closing andtitling costs.
But the good news is we learnedthat this lump sum can often be
strategically rolled into amortgage loan to.
Ease the immediate cash crunchat closing.
(36:46):
Mm-hmm.
We also dissected some of thecommercial rationale behind
developer policies.
Understanding that a low flatfee for administrative reselling
isn't just nice.
It actively fosters investorliquidity in turn, which can be
part of their model.
Yeah, that was insightful.
Those design choices, likeavoiding assigned deeded
parking, they aren't arbitrary.
They're usually very calculatedfinancial moves.
(37:07):
Designed specifically tominimize your recurring monthly
maintenance costs, therebyboosting your long-term net
rental income potential withoutreally sacrificing rental value
in the tourist market.
Having this level of detail,these insights in your arsenal
as an investor, I mean, it feelslike the difference between
operating on gut feeling orintuition and operating like a
seasoned, calculatedprofessional who understands the
(37:29):
game.
It really is.
You now know the rules, youunderstand the key risks better.
And you can spot the strategicopportunities and the potential
pitfalls much more clearly, youknow the landscape.
And perhaps to leave you ourlistener with a final,
provocative thought to exploreon your own as you do your due
(37:49):
diligence.
Okay, let's hear it.
While the contract, the writtenword is legally binding
regarding things like delay,penalties and grace periods.
Perhaps the ultimate form of duediligence.
The one that transcends eventhat written contract is digging
into the developer's actualreputation, and more
importantly, their documentedpast actions.
How they behaved previouslyexactly.
(38:12):
Go beyond simply confirming thata penalty clause exists in the
contract.
Ask around investigate, did theyactually support those
administrative resales smoothlyand with that low fee during
their last project?
Or did they drag their feet andcomplicate the process despite
what the contract allowed?
Hmm, when the pandemic hit andcaused massive disruption, how
did they actually treat theirclients regarding delays in
(38:33):
compensation?
Were they fair?
Were they proactive?
Or did they hide behind the bareminimum letter of the contract?
So look at the track record ofbehavior, not just the promises
on paper.
Precisely exploring theirdocumented past behavior,
talking to previous buyers ifpossible.
That provides perhaps the mostcomprehensive layer of security
(38:54):
and confidence when you'redealing with these highly
variable factors like potentialconstruction timelines, and the
administrative ease oftransferring your rights.
It's about assessing theircharacter and integrity, which
often tells you more than thelegalese alone.
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