Mexico Resort Properties

I have received numerous emails asking for an update, wondering if the safety situation has changed since my last blog or if the highway between Lukeville (american side of the border crossing) and Puerto Penasco is safe.

Yes it is safe, it has always been safe and I will be quick to update my message if the facts change.

I am still hearing of officials saying it is not safe and I wonder if they are that miss informed or have a different agenda?

Since the first travel advisory was sent April of last year and the update was sent early in 2009 causing the chain reaction of travel warnings, the most notable from University Deans telling their students not to come for spring break, we have not had a single safety event that fits the issues raised in the alerts.

I wonder what grade the University Deans would give a student if their research was so inaccurate to the point of being totally false? I wonder how people feel knowing they spoiled numerous family vacations on the ocean or how many poor people lost their source of income when tourists did not come?

I am doing what I can to get the right message out, but it will take 10 times the effort to set the record straight as it did to spread a false alert.  I challenge people to read carefully the original official government advisory and see that Rocky Point is not a place of concern.  Please help me spread the truth, re-blog, email and phone everyone you know!!

If you have further questions or concerns email me at wmlcorcoran@gmail.com. 

Development & Consulting in Mexico

 St. James Gate Development & Consulting company; was founded with the mission to provide premier world class business and real estate consulting services, market analysis, and real estate developing services for North America clients doing business in Mexico, Mexican Entities or Individuals, are either part, or are related in any way in a business venture.  

  ST. JAMES GATE CONSULTING:    Doing business in the international arena is always challenging,being an expert and the best in your current business sector gives you tremendous opportunities to expand into a different country, taking advantage of the different situations a new country can offer you. Being an expert in your market is not enough when operating in a new country; cultural differences, language barriers, and unique business practices are the most common reason of business failures, turning a great business opportunity into a challenge and sometimes a failed venture.   St. James Gate is a unique consulting company formed by American, Canadian and Mexican nationals living and working in Mexico under one roof, interacting every day on behalf our clients, with the sole mission of providing our expertise about how do business in Mexico in a pleasant profitable way.     

CONSULTING AREAS   

• BUSINESS IMPROVEMENT
• MERGERS & RE-ENGINEERING & ACQUISITIONS 
• DISTRIBUTION IN MEXICO
• FRANCHISING TO MEXICAN NATIONALS
• PARTNERSHIPS, JOINT VENTURES OR CO INVESTMENT WITH MEXICAN CORPORATIONS
• MANUFACTURING, TECHNICAL SUPPORT
• MARKET PENETRATION AND NEW NICHES OF MARKET
• EXPANSION OF FOREIGN BUSINESS OPERATING IN MEXICO
• HOSPITALITY, FRACTIONAL, OR FULL OWNERSHIP REAL ESTATE DEVELOPMENTS.
• INTERNATIONAL FINANCING, PRIVATE PLACEMENTS AND SELF DIRECTED IRA´S FUNDING.
• INTERNATIONAL GUARANTEES
• PROJECT MANAGEMENT
• CONSTRUCTION

ST. JAMES GATE REAL ESTATE DEVELOPING   Because developing and construction in Mexico is very different than in Canada or the US, we coach our clients / partners to improve development ideas, approving project plans, launching projects and providing creative financial, legal, tax efficient corporate structures, construction, marketing & sales tools, and efficient international business orientated legal services and support, working as a team with the investor or development partner.  

Cultural shock does not have to be a problem as by company policy we translate the cultural facts to our partners facilitating the learning process in both ways avoiding expensive mistakes.  

Our development services take an investor by hand from an initial project idea, land selection through to the end of the project when the titles are delivered to project buyers and even further, until the delivery of Home Owner's Operations to its Association Members (HOA).   

St. James Gate will be glad to serve you in the best way for your needs, either participating in all the project process, or just in a specific service to fill in any requirements a developer needs in this market like project set up, project management, construction, licensing, legal structures, marketing and sales administration.   

ST. JAMES GATE CONSTRUCTION   

We are a sophisticated boutique construction company, flexible as our clients needs are, we can take care of building your dream beach home, project managing that construction to assure quality and zero legal liabilities when construction is finished, making your building experience fun and pleasant. We also have the experience, resources, and team to build a master planned development with golf course, hotels, model homes and condo towers with state of the art project management and quality control.   Unlike almost all other professional consultancies operating in construction, we predominately focus on

 finding solutions to issues rather than protecting a singular professional position. This skill can really only be developed by staff with a professional training, construction experience in any or many branches of the industry, considerable time spent understanding and resolving constructional problems, plus, frequently, a degree of legal education and training.  

Our Mexican staff is experienced construction professionals most of whom are dual qualified in a construction discipline and a professional qualification.  

We help obtaining financing credit for our clients in order to ease the unfolding of their development projects.  

ST. JAMES GATE MARKET ANALYSIS   

We can´t just imagine a professional consulting company not providing market tools to clients to make important business decisions based in real facts, that is why we have our own market analysis department to do the research and guide you to make wise and supported decisions when doing business in Mexico.   Our market analysis are provided for any kind of industry or commercial activity anywhere in Mexico, we do not sell data bases, every business decision is unique, because of that any market analysis to support a unique business decision must be unique.  

ST. JAMES GATE FINANCIAL SERVICES   

We have extensive experience in designing efficient and creative solutions for the banking and financing needs of corporations and individuals wishing to do business in Mexico, with Mexican, US, Canadian or EU funders in a Mexico's project. We offer services in the following areas: international financing of real estate development, collateral issues and opportunities; including all aspects of leveraging assets in one country to support development / investment goals in another, loan agreements covering all aspects of secure funds transfer and performance guarantees, guarantee Trusts; structuring United States-based banking mechanisms, debt restructuring; contemplating all aspects preserving the assets and opportunities related to existing distressed  properties and developments, co-investment structures; providing all aspects of properly valuing differing types of contributions and contributions from different countries, private and public placements; including access to unadvertised private capital resource.  

We help provide Buyer Financial Services through strategic alliance with major banks in Mexico, USA and Canada, with Stewart Title, Banco Monex and other world brands in its fields, services such : international money transfer, construction financing, private and public placements, investments, and exchange rate insurance are very common in our day a day operation.   

ST. JAMES GATE REAL ESTATE   

Helping our clients make an informed selection of properties to purchase and develop. We perform thorough title research and verification to assure our clients of rock-solid ownership to title delivery in hand and US title insurance. We help you to find and buy the property you are looking for hassle free anywhere in Mexico it doesn't matter if you are looking for a condo or a developer parcel.  

When buying for a developer we create phased development plans that facilitate smooth transitions from the "drawing board" to the "real world", as well as helping enable the phased acquisition of development capital and resources. We structure for your deal United States-based escrow agreements and banking mechanisms that assure our clients of the security of their funds working for such effects with title insurance companies operating worldwide. We obtain United States-based title insurance guarantees.   

We work with the investor to complete due diligence for the projects and generating the reports that are required to safe guard the project and to present these reports to various investors and banks to obtain credits or to finance the development of the projects.  

We look for options to provide the developer resources captured by selling a development project in its different stages; in order to ensure the cash-flow necessary for completing the project. We help the client restructure debts of projects that are in progress, promoting the recent financial mechanisms for development projects.  

St. James Gate does not list properties but will provide support in marketing and promoting development projects and / or special Mexican properties (see and example in www.houseofthewinds.com ). When we have a client that wants to list a condo or piece of land we will refer the listing to Century 21 Sun and Sand the premiere Real Estate Brokerage in Mexico for US and Canadians with the most sophisticated marketing channels (www.century21penasco.com) with whom we have a strategic alliance with.   We also provide real estate investment services that start with identifying potential investors, identifying the right investment vehicle for the investor, establishing the most effective legal framework for the investor and becoming the buyer representative during the purchase process, managing the return on investment and changes to the investment portfolio. We are true real estate buyer representatives, taking complete care of the buyers needs from property searches through to completion of ownership title work.    

ST. JAMES GATE LEGAL     We specialize in provide unique and tailored legal services for business operations, corporate solutions, international financial transactions, mergers & acquisitions, real estate development or transactions, estate planning, trusts, real estate transactions, corporate real estate structures, international banking and financing issues, guarantee trusts and bonds, hospitality industry issues, as well as commercial and distribution agreements.     

HOW TO REACH ST. JAMES GATE

You can contact us at: Boulevard Freemont, Suite 16, Plaza de Sol, Puerto Peñasco; Sonora Mexico CP 83551 Our office numbers are: Mexico numbers; + 52 (638) 383-7127, (638) 383-1739 US numbers; + 1 (480) 308-0682, (480) 308-0821 Fax; +52 (638) 388 5125   info@stjamesgate.ws  

St. James Gate www.st.jamesgate.ws has this unique high return secure investment opportunity to present to you.  

 We have an ocean view lot in a privileged location near Puerto Peñasco, Mexico (see a brochure at www.stjamesgate.ws on the "resort land" tab). This is a developer's lot with approved density to build 40 units.

 The investment offer is the purchase of the lot with a warranty lease back contract for a minimum of 3 and a maximum of 5 years for its current market value of 1.4M USD. Details of the warranty lease back will provided to interested and qualified investors.

 While the land is under the lease back contract, St. James Gate will add a project that is in very advanced planning stage now. The project, construction, permits and licenses will be security for their investment until the repurchase price is paid in full.

 St James Gate will complete the planning and permit stage, start construction, and initiate sales through our strategic alliance partner Century 21 Sun & Sand www.century21penasco.com, they are the largest and most productive real estate company for this market in the region.

 Further construction investment funds and some unit purchase funds will be raised through IRA's self-directed investment accounts leveraging our alliance with EntrustCAMA Pennsylvania.

 The project will target minimum total revenue of $4 M USD with 40 units priced in low 100,000's range. With this approach we forecast the project being sold out and delivered within three years. Century 21 Sun & Sand has been successful selling quality properties in this and other price ranges even during these adverse market conditions so the three year sell out seems conservative.  

 If this business opportunity is attractive for you, let us know as we believe we have to move fast to take advantage of the market growth we forecast starting in 2010.

St. James Gate www.st.jamesgate.ws has this unique high return secure investment opportunity to present to you.  

 We have an ocean view lot in a privileged location near Puerto Peñasco, Mexico (see a brochure at www.stjamesgate.ws on the "resort land" tab). This is a developer's lot with approved density to build 40 units.

 The investment offer is the purchase of the lot with a warranty lease back contract for a minimum of 3 and a maximum of 5 years for its current market value of 1.4M USD. Details of the warranty lease back will provided to interested and qualified investors.

 While the land is under the lease back contract, St. James Gate will add a project that is in very advanced planning stage now. The project, construction, permits and licenses will be security for their investment until the repurchase price is paid in full.

 St James Gate will complete the planning and permit stage, start construction, and initiate sales through our strategic alliance partner Century 21 Sun & Sand www.century21penasco.com, they are the largest and most productive real estate company for this market in the region.

 Further construction investment funds and some unit purchase funds will be raised through IRA's self-directed investment accounts leveraging our alliance with EntrustCAMA Pennsylvania.

 The project will target minimum total revenue of $4 M USD with 40 units priced in low 100,000's range. With this approach we forecast the project being sold out and delivered within three years. Century 21 Sun & Sand has been successful selling quality properties in this and other price ranges even during these adverse market conditions so the three year sell out seems conservative.  

 If this business opportunity is attractive for you, let us know as we believe we have to move fast to take advantage of the market growth we forecast starting in 2010.

You can reach us at our website www.stjamesgate.ws or by email wayne@stjamesgate, A brochure can be founf on this web pagehttp://www.stjamesgate.ws/HomesAuthenticated.aspx?tabid=2214767

St. James Gate Development & Consulting company; was founded with the mission to provide premier world class business and real estate consulting services, market analysis, and real estate developing services for North America clients (also known as NAFTA) doing business in Mexico, Mexican Entities or Individuals, are either part, or are related in any way in a business venture.  

  ST. JAMES GATE CONSULTING:   

Doing business in the international arena is always challenging,being an expert and the best in your current business sector gives you tremendous opportunities to expand into a different country, taking advantage of the different situations a new country can offer you. Being an expert in your market is not enough when operating in a new country; cultural differences, language barriers, and unique business practices are the most common reason of business failures, turning a great business opportunity into a challenge and sometimes a failed venture.  

St. James Gate is a unique consulting company formed by American, Canadian and Mexican nationals living and working in Mexico under one roof, interacting every day on behalf our clients, with the sole mission of providing our expertise about how do business in Mexico in a pleasant profitable way.     

CONSULTING AREAS    

• BUSINESS IMPROVEMENT & RE-ENGINEERING
• MERGERS & ACQUISITIONS 
• DISTRIBUTION IN MEXICO
• FRANCHISING TO MEXICAN NATIONALS
• PARTNERSHIPS, JOINT VENTURES OR CO INVESTMENT WITH MEXICAN CORPORATIONS
• MANUFACTURING, TECHNICAL SUPPORT
• MARKET PENETRATION AND NEW NICHES OF MARKET
• EXPANSION OF FOREIGN BUSINESS OPERATING IN MEXICO
• HOSPITALITY, FRACTIONAL, OR FULL OWNERSHIP REAL ESTATE DEVELOPMENTS.
• INTERNATIONAL FINANCING, PRIVATE PLACEMENTS AND SELF DIRECTED IRA´S FUNDING.
• INTERNATIONAL GUARANTEES
• PROJECT MANAGEMENT
• CONSTRUCTION

ST. JAMES GATE REAL ESTATE DEVELOPING  

Because developing and construction in Mexico is very different than in Canada or the US, we coach our clients / partners to improve development ideas, approving project plans, launching projects and providing creative financial, legal, tax efficient corporate structures, construction, marketing & sales tools, and efficient international business orientated legal services and support, working as a team with the investor or development partner.  

Cultural shock does not have to be a problem as by company policy we translate the cultural facts to our partners facilitating the learning process in both ways avoiding expensive mistakes.  

Our development services take an investor by hand from an initial project idea, land selection through to the end of the project when the titles are delivered to project buyers and even further, until the delivery of Home Owner's Operations to its Association Members (HOA).   

St. James Gate will be glad to serve you in the best way for your needs, either participating in all the project process, or just in a specific service to fill in any requirements a developer needs in this market like project set up, project management, construction, licensing, legal structures, marketing and sales administration.   

ST. JAMES GATE CONSTRUCTION   

We are a sophisticated boutique construction company, flexible as our clients needs are, we can take care of building your dream beach home, project managing that construction to assure quality and zero legal liabilities when construction is finished, making your building experience fun and pleasant. We also have the experience, resources, and team to build a master planned development with golf course, hotels, model homes and condo towers with state of the art project management and quality control.  

Unlike almost all other professional consultancies operating in construction, we predominately focus on finding solutions to issues rather than protecting a singular professional position. This skill can really only be developed by staff with a professional training, construction experience in any or many branches of the industry, considerable time spent understanding and resolving constructional problems, plus, frequently, a degree of legal education and training.  

Our Mexican staff is experienced construction professionals most of whom are dual qualified in a construction discipline and a professional qualification.  

We help obtaining financing credit for our clients in order to ease the unfolding of their development projects.  

ST. JAMES GATE MARKET ANALYSIS   

We can´t just imagine a professional consulting company not providing market tools to clients to make important business decisions based in real facts, that is why we have our own market analysis department to do the research and guide you to make wise and supported decisions when doing business in Mexico.   Our market analysis are provided for any kind of industry or commercial activity anywhere in Mexico, we do not sell data bases, every business decision is unique, because of that any market analysis to support a unique business decision must be unique.  

ST. JAMES GATE FINANCIAL SERVICES   

We have extensive experience in designing efficient and creative solutions for the banking and financing needs of corporations and individuals wishing to do business in Mexico, with Mexican, US, Canadian or EU funders in a Mexico's project. We offer services in the following areas: international financing of real estate development, collateral issues and opportunities; including all aspects of leveraging assets in one country to support development / investment goals in another, loan agreements covering all aspects of secure funds transfer and performance guarantees, guarantee Trusts; structuring United States-based banking mechanisms, debt restructuring; contemplating all aspects preserving the assets and opportunities related to existing distressed  properties and developments, co-investment structures; providing all aspects of properly valuing differing types of contributions and contributions from different countries, private and public placements; including access to unadvertised private capital resource.  

We help provide Buyer Financial Services through strategic alliance with major banks in Mexico, USA and Canada, with Stewart Title, Banco Monex and other world brands in its fields, services such : international money transfer, construction financing, private and public placements, investments, and exchange rate insurance are very common in our day a day operation.   

ST. JAMES GATE REAL ESTATE   

Helping our clients make an informed selection of properties to purchase and develop. We perform thorough title research and verification to assure our clients of rock-solid ownership to title delivery in hand and US title insurance. We help you to find and buy the property you are looking for hassle free anywhere in Mexico it doesn't matter if you are looking for a condo or a developer parcel.  

When buying for a developer we create phased development plans that facilitate smooth transitions from the "drawing board" to the "real world", as well as helping enable the phased acquisition of development capital and resources. We structure for your deal United States-based escrow agreements and banking mechanisms that assure our clients of the security of their funds working for such effects with title insurance companies operating worldwide. We obtain United States-based title insurance guarantees.   

We work with the investor to complete due diligence for the projects and generating the reports that are required to safe guard the project and to present these reports to various investors and banks to obtain credits or to finance the development of the projects.  

We look for options to provide the developer resources captured by selling a development project in its different stages; in order to ensure the cash-flow necessary for completing the project. We help the client restructure debts of projects that are in progress, promoting the recent financial mechanisms for development projects.   St. James Gate does not list properties but will provide support in marketing and promoting development projects and / or special Mexican properties (see and example in www.houseofthewinds.com ). When we have a client that wants to list a condo or piece of land we will refer the listing to Century 21 Sun and Sand the premiere Real Estate Brokerage in Mexico for US and Canadians with the most sophisticated marketing channels (www.century21penasco.com) with whom we have a strategic alliance with.  

We also provide real estate investment services that start with identifying potential investors, identifying the right investment vehicle for the investor, establishing the most effective legal framework for the investor and becoming the buyer representative during the purchase process, managing the return on investment and changes to the investment portfolio. We are true real estate buyer representatives, taking complete care of the buyers needs from property searches through to completion of ownership title work.    

ST. JAMES GATE LEGAL    

We specialize in provide unique and tailored legal services for business operations, corporate solutions, international financial transactions, mergers & acquisitions, real estate development or transactions, estate planning, trusts, real estate transactions, corporate real estate structures, international banking and financing issues, guarantee trusts and bonds, hospitality industry issues, as well as commercial and distribution agreements.     

HOW TO REACH ST. JAMES GATE

Our website is www.stjamesgate.ws. email us at info@stjamesgate.ws

Our office is located at: Boulevard Freemont, , Plaza de Sol, Suite 16Puerto Peñasco; Sonora Mexico CP 83551

Our office numbers are: Mexico numbers; + 52 (638) 383-7127, (638) 383-1739 US numbers; + 1 (480) 308-0682, (480) 308-0821 Fax; +52 (638) 388 5125  

The following article, first of a four part series, was written by my business partner in St James Gate, Raul O'Farrill, and is shared to help you understand more about how to invest in Mexico.  We are headquartered in Puerto Penasco but serve North American clients throughout all of Mexico.

Many American and Canadian clients ask us for guidance as to how they can successfully invest in Mexican real estate. Often they bring to the discussion misconceptions and / or misinformation based upon myths about Mexican real estate, appropriate investment strategies and -- in some cases -- about Mexico itself.

This is the first of three articles that will attempt to address these myths, answer questions we commonly hear, and outline the remarkably wide range of choices that non-Mexicans have for investing in this wonderful country and its vibrant real estate markets.

Myth #1: I would need to be a very sophisticated investor with a great deal of money to even consider purchasing property in Mexico.

Reality: While education and experience are helpful in any activity, you don't have to be a sophisticated investor with millions of dollars (or euros) to make money in Mexico's rapidly appreciating coastal real estate markets. Even when investing relatively small amounts of capital, countless Americans, Canadians and -- increasingly -- citizens of other countries enjoy excellent rates of return, experience positive cash-flow from the rental of their Mexican properties, and achieve a perfect feeling of security through rigorous title verification procedures and the use of properly designed ownership mechanisms. For those who wish to further their knowledge of all aspects of title verification, ownership mechanisms, trust processing, and title insurance for Mexican real estate there are numerous downloadable resources at our website:  www.stjamesgate.ws.

Myth #2: Ownership of Mexican real estate by non-Mexicans is not secure. (Variation: As non-Mexicans, we can't really own Mexican coastal property or, "a bank trust is just a form of lease.")

Reality: A Mexican real estate bank trust is simply not a lease. The bank trust mechanism created by Mexico's Foreign Investment Law was designed to facilitate the safe acquisition of coastal and border properties by non-Mexicans, and specifically designed to protect foreign owners rights. A Mexican bank trust confers upon the trust holder the same rights that "ownership" does in the United States or Canada. For 35 years these bank trusts have proved themselves a secure ownership mechanism for the more than a million and a half Americans and Canadians who are now enjoying the lifestyle and financial benefits of Mexican property ownership. It is also noteworthy that these trusts are wonderful investment tools that offer sophisticated estate and tax planning benefits -- as well as significant legal protections -- and for these reasons are used by many Mexicans as well. For example, my personal real estate holdings in Mexico are held in bank trusts, and I was born in Mexico City and my family have been citizens of Mexico since 1846!

Question #1: We only have $25,000 to $75,000 to invest. Is that enough to get us into an existing home that we can begin using immediately?

Answer: It certainly is! There are many investment opportunities within this price range in the Greater Rocky Point market. For $25,000 to $75,000 you can buy a fractional-ownership property on the east beaches like Playa Encanto, El Dorado Resorts, El Dorado Estates, or on pristine Miramar beach. Then? Enjoy your property, or rent your property and get cash flow from the rentals! When property is part of a Real Estate Club the club does the work for you -- forget about maintenance or cleaning or any other ongoing responsibility related to your coastal home -- just enjoy your property and make money.

Question #2: Can we use our IRA / 401(k) funds for this investment?

Answer: Yes, by using a self-directed IRA account you can easily purchase property for rental purposes. Why consider buying southeast of town? Because of the explosive growth of that area that is expected when the international airport opens next year. Utilities and infrastructure are already in place, and these properties have been increasing in value 10% to 25% in the past 2 years. We expect that the value of these existing homes will keep moving higher, and rentals are in the range of $150 to $350 us per night depending on the size of the property, which offers a great rate of return on a relatively small investment! Another investment option within this price range is buying a storage unit in any of these areas. They are in high demand today and should be easy to sell for handsome profits within three years. This type of investment can be self-financing in the short-term, is high-return in the middle term, and arguably safer than any stock market in the world!

Question #3: Are there still desirable lots available for $25,000 to $75,000?

Answer: Yes. There are highly desirable lots within this price range in some communities, including both lots within town and commercial and residential developments -- even in Playa Encanto! It should be noted that a number of current offerings are being offered with owner-financing and -- even if this option isn't advertised -- a reputable and experienced real estate investment specialist may very well be able to secure this arrangement for you.

Question #4: What options are available to us with a budget from $65,000 to $125,000?

Answer: Within this investment range your choices are very large! You can purchase fractional ownership of a condominium in Las Conchas, East Beaches -- or even Sandy Beach -- with even higher rental rates and the same benefits. Again, for rental purposes, you can use your self-directed IRA / 401(k) funds to acquire these properties.

Alternatively, you can invest in a Real Estate Club that offers ownership within this price range and not only enjoy your property, but reap the benefits of appreciation without the responsibility of maintenance. Under the Real Estate Club scenario the added value of the share you own not only offers you the benefit of the potential appreciation of the entire group of properties that the club owns, but also -- since the club has a limited number of shares -- when a club is sold out and its assets and services are in high demand, then the share by itself is an appreciating asset, making your investment even more profitable.

Within this price range you also have the option of buying large ocean-view lots in many of Greater Rocky Point's finest communities such as Miramar Beach and Las Conchas. Under this strategy you simply let time do its job! The appreciation of the value of land in those areas has been remarkable: lots in Miramar appreciated over 2,500% in the past five years! Yes, those zeros are correct! If you don't believe it just ask to those homeowners about this fact. Lots in Las Conchas -- and even lots in town -- have appreciated in the same period between 200% to 500% depending on location.

While no one can guarantee specific rates of return on any investment, we see no reason why the next several years shouldn't bring very healthy returns for investors in this price range!

Question #5: Is building only for developers?

Answer: No! While building obviously is for developers, it is also an option for individual investor-families with as little as $150,000 to spend. Once you acquire a lot -- possibly owner-financed -- you can begin to build your Dream Home. Even when our clients are very experienced in construction management outside Mexico, we strongly advise retaining an investment management company that will hire the contractor and -- without reinventing the wheel -- build a house designed for vacation use and rentals.

The advent of Owners Clubs in the Rocky Point market has opened up a number of creative investment scenarios for families considering home building. For example, once the home is constructed it is now possible to contribute the house to an Owners Club by contributing 1/2 or more of the title to the club in return for receiving 1/2 or more of the rentals every month! Under this scenario the family not only retains substantial access to their property, but they see immediate income from the home and access to the rest of the club properties, shared benefits, and amenities! Or make your property fractional and sell it. Or just sell it as a single-ownership home. The options for owner-builders are extremely varied!

Your investment specialist can outline profitable strategies for all of these options and you decide which best fits for specific financial and lifestyle goals. As with any investment, your choice of primary investment advisor will have a great impact on your experience of the investment -- and its profitability. A serious and complete investment advisor team must include a real estate attorney, title and trust processor, real estate agent, real estate brokerage, international tax specialist and -- if you choose to build -- a development-services company.

We can be reached through our website; www.stjamesgate.ws or by email at info@stjamesgate.ws.

I have sent out a few blogs in the past month about the safety concerns here in Puerto Peñasco where I try to set the record straight and have left my email for those that want more information.  I have responded to several emails and have been fortunate to contribute to helping people feel more comfortable enjoying their vacation here.

I want to share the following specific concerns along with my response because we are hearing more and more false rumors and need your help setting the record straight.

The following is a quote from an email sent to me: 

"We have read about the kidnapping of two young girls with one being killed and used to transport drugs; this apparently happened in Rocky Pt.  They never found the other one.  I know there are many precautions we must take, but is the trip worth the risk?  What about the so-called roadblocks that are conducted by men in uniform that seems to be official policeman but turn out to be bandits or even worse?"

My response was: 

"The incidents you talk about are rumors that I have heard but are not true to my knowledge and I also checked with the new Police Chief in Puerto Peñasco who started in December and the Police Chief in the border town of Sonoyta, these things have not happened here.  I have heard rumors like these but believe they are either based on fears or what has happened another larger border city.

Our community has initiated actions to help set the message straight as these types of rumors are hurting our tourism more than the economic crisis.  Please come and enjoy our safe community and share your positive experience as it will take thousands of positive experiences to relive the fear of these false negative rumors that the uneducated media and University Deans spread in an effort to protect people like you."

in this post I will share my business partner, Raúl O'Farrill, thoughts on the the US and Mexican legal systems as he has practiced in law in both countries and regularily teachs on this topic at our local real estate association.

Mexican law has both similarities and differences to law as it is practiced in the United States and Canada.

For our French Canadian and Louisiana readers who are familiar with the Roman legal system -- which informs legal practice in Louisiana and parts of Canada -- this article will not be unfamiliar at all, but for the rest of our American and Canadian readers we hope to illuminate some of the basic differences between Common Law as practiced in the  United States and Roman Law as practiced in Mexico that are irrelevant most of the time, but can become important when someone is living, working, or investing in Mexico.

Common Law is the main legal system in countries with Anglo Saxon roots, like the United States and countries of the Commonwealth like Canada. Under Common Law the precedents of other courts in similar cases are usually the first touchstone for judges, and create the body of law that governs commerce and life in general.

Under Common Law as practiced in the United States criminal courts usually have a jury that decides guilt or innocence. In virtually all matters hearings are public; the parties present; questioning of witnesses is public; and attorneys make oral arguments to judges and juries.

Under Common Law as practiced in the United States, Public Notaries simply verify the identity of the signer of a document, and in some states can certify that copies of an original document are identical to the original.

Common Law -- and it's reliance on precedent -- has the big advantage that it is as dynamic as society and technology, and usually as flexible as changing circumstance requires. An example of the rapid adaptation to technological change: for many years email communication and fax signatures have been generally ruled to be legally binding in the United States, whereas even today in Mexico these are not the best -- or advisable -- way to document a legal obligation or agreement.

Classical Roman Law covers more than one thousand years, and dates from the law of the Twelve Tables (449 BC) and the Corpus Juris Civilis of Emperor Justinian I (around 530 BC). Roman law, as preserved in Justinian's codes, became the basis of legal practice in the Byzantine Empire and -- later -- in Continental Europe.

Its origin was ancient common law that became enshrined as legal principles. The basis is the Latin phrase "inveterata consuetudo in opinio juris seu necesitatis", the meaning of which is that the repetition of a an act many times becomes an expectation in the mind of the people that must become law. This evolved into a full body of laws: to rule the State, individuals, trade, family, estate matters, crimes, and property.

This system did not survive the collapse of the Roman Empire intact, but was resurrected in the 17th and 18th centuries in many countries that had been part of the Empire - such as Italy, Portugal, Germany, France -- where Napoleon improved it and it became called the  Napoleonic Code -- and Spain, as well as all the colonies of these empires like the Philippines, some islands in the Caribbean, several African nations, and all of Latin America from Argentina to Mexico.

Under the modern version of Roman Law legal matters are decided by judges, and attorney's rarely appear in person before the judge.

Under Roman Law there are no public hearings; parties rarely have to be at the same time in court at the same time; and most of the process -- including evidence -- is presented in writing.

Under Roman Law the role of the Notario is different, and carries a wide spectrum of responsibilities beyond the simple certification of documents. If there is tax to be paid on a transaction, Notarios both calculate and collect the tax and, in fact, are often held liable (i.e. they pay) in cases where the tax was mis-calculated. Notarios also certify the validity of various formalities required by law, and their participation (mandatory) in real estate transactions is informed by the concept of Public Faith, which means that what a Notario states in a document has the presumption of truth.

Judges are mandated to analyze a case based on arguments and facts only, and resolve it  based solely on the applicable legal statutes enacted by government. Generally only in cases where there is doubt -- or conflict in interpretation or applicability of enacted law -- do judges consult the record of jurisprudence (that is not very different to the Common Law precedent system) to inform their decisions.

It is intended that every aspect of human life be included in the laws approved by Congress, and judges must rule in accordance with those laws and consult jurisprudence only when needed to interpret the application of a law -- without changing the spirit and mandates of  the law.

It is argued that the modern Roman legal system has the advantage that it produces more consistent rulings because cases are tried before judges -- who are legal experts, unlike citizen-juries -- and that it is fairer because judges are not influenced by the litigants feelings,  dramatic acting, or attorneys expressive or persuasive skills (the extreme variation of awards in tobacco industry lawsuits in the United States -- whatever a person thinks about the underlying issues -- clearly illustrates the variability of outcomes for identical claims  under the United States' Common Law / Jury system).

On the other hand, every time technology or society evolve, Roman Law has to be amended by Congress. As a result, there is a greater lag between the need for a new law and it's enactment, and a good number of dead or superseded laws!

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My business partner Raúl O'Farrill is one of the best real estate lawyers in Mexico with training in both US and Mexico law and in this article we will discuss your ownership options for the bank trust that will hold deed to your coastal real estate. These options are: ownership through a United States LLC; ownership as an individual; or ownership through a Mexican corporation. Each of these mechanisms has advantages and disadvantages:

OWNERSHIP THROUGH A UNITED STATES LLC: Forming a United States LLC for the purpose of acquiring Mexican coastal real estate is the most widely used mechanism, and for a number of good reasons. At our firm we have processed numerous LLC's for this purpose.

Advantages:

1) Properly structured, the rules and covenants within a United States LLC are highly adaptable to the specific needs of the purchaser or purchasers.

2) As an estate planning instrument, a LLC has great desirability because the LLC is a United States entity and United States law governs it.

3) For fractional ownership -- when the fractional owners are United States residents -- a LLC is the most desirable and cost-effective instrument, as the LLC operating agreement will work as the internal rules for the members of the LLC.

4) For all owners - single, or fractional -- the most useful part of forming an LLC is that by selling the membership of the LLC the interest in the Mexican Bank Trust is transferred to the new member (or members), which is very cost effective and takes very little time compared with the assignment of rights on an existing bank trust, or the organization of a new one.

Disadvantages:

1) This scenario does not work for people looking for financing at this time, unless the lender is willing to take as collateral the LLC membership, something which is very unusual unless you are dealing with a private lender.

2) On the tax side a LLC does not offer specific benefits anymore, because now the member who sells his/her membership will need to pay capital gain taxes to Hacienda, Mexico's taxation authority. The good news is that -- having obtained proper documentation of your tax payment in Mexico -- you will receive credit for that payment on your United States tax filing because of a United States-Mexico treaty that prohibits double taxation.

OWNERSHIP AS AN INDIVIDUAL: An option that suits a number of buyers, especially those seeking financing for their Mexican property.

Advantages:

1) The first possible advantage is that as individual some United States banks - as well as at least one Mexican bank -- are lending money for purchasing, refinancing, and in some instances building a house. If the opportunity to finance the acquisition of your Mexican property is important, there are good reasons to consider setting up your bank trust to reflect ownership simply as an individual. We are processing several of our "Guarantee Trusts" with this exact objective, and are also securing fractional ownership financed by a Mexican bank with very competitive terms using this approach.

2) As an estate planning instrument this scenario works well for people who already have a last will, or retired people for whom their primary asset is the property in the bank trust.

3) When the property will be primarily a rental property, there are tax advantages, because -- with individual ownership -- the tax payer who will be the beneficiary of the trust can often have his tax obligation structured so that the tax obligations are very small.

Disadvantage:

The primary disadvantage of ownership as an individual is that when the property is sold there is high tax withholding in Mexico that the notary must calculate and pay to Hacienda, Mexico's taxation authority. There are few deductions allowed. Once again, the good news is that -- having obtained proper documentation of your tax payment in Mexico -- you will receive credit for that payment on your United States tax filing because the United States-Mexico treaty prohibits double taxation.

OWNERSHIP THROUGH A MEXICAN CORPORATION: An option that should be reserved for business, commercial, or development purposes.

A corporation is desirable only when the intent of your real estate purchase is business, commercial, or development. It is an illusion to imagine that buying property under a Mexican corporation for residential purposes will save you money. Why?

Because Mexican corporations are highly regulated and the maintenance of the corporation is much more than the simple annual fiduciary fee assessed on your bank trust. For example; fiduciary fees for bank trusts owned by LLC's or individuals average $500 USD per year and require zero reports to the Mexican government, or any other kind of maintenance expenses.

In contrast, a Mexican corporation must report taxes monthly: the average cost of a CPA to perform this service will be $1,800 USD annually. If monthly tax reports are not submitted on time there will be monthly fines. A Mexican corporation must file an annual report before the foreign investment registry. If not filed on time there are additional fines. A Mexican corporation must submit a report of properties purchased in the restricted zone if not another fine...and, frankly, on and on!

There ARE good reasons to form a Mexican corporation, but they only pertain to sophisticated investors making fairly large-scale investments where the maintenance costs associated make economic sense: not residential ownership, even of the grandest Gold Coast estate! At our firm we have had the pleasure of forming numerous Mexican corporations for commercial investors and real estate developers, and always welcome the opportunity to discuss investment and development goals with new clients.

As a residential purchaser your rational choices are ownership through a LLC or ownership as an individual. Making this choice is an area where you're United States accredited attorney and experienced real estate broker can be very helpful to you, and we strongly suggest that you take full advantage of the knowledge, experience, and experience that informs their suggestions.

Always remember that Mexico wants its non-Mexican real estate owners to feel perfectly secure that their investment in Mexico is as safe as their other holdings in their home countries. For over 35 years bank trusts have proved themselves a secure mechanism for the more than a million and a half Americans and Canadians who are now enjoying the lifestyle and financial benefits of Mexican property ownership. The mechanisms and procedures that we have described -- and will continue to outline in future articles -- have been carefully designed to serve that end. With just a small amount of prudent effort at the start of your journey into Mexican real estate, your ownership of part of Mexico's magnificent coast will be simple and safe!

By Raúl O'Farrill, St. James Gate

Contact us at www.stjamesgate,ws or email us at info@stjamesgate.ws