What's a Bank Trust?
Legal ownership of properties in Mexico for foreigners is backed up by the Foreign Investment Law which was approved by President Luis Echeverria in 1971 and became a law in 1973.
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This law exists because notaries and other businessmen in Mexico recognized the huge asset Mexico has at its coastlines. These people noticed there was an opportunity to attract foreign investment. To have funds for economic development in the 70s was of unprecedented importance as US dollars were highly desired. How to make this asset available to foreigners and not violate the Mexican constitution was the dilemma. The key became the fideicomiso or trust.
In Mexico, there is a legal requirement for foreigners who wish to purchase property in certain areas of the country. This is known as a restricted zone, and refers to the 100 kilometers (62 miles) along the borders and 50 kilometers (31 miles) along the coasts.
​Puerto Peñasco is located in Mexico’s “restricted zone” .
What do I need as a foreigner?
-Driver's License
-Passport
-Birth certificate
-SSN
-Marriage license (if married)
-Proof of residence
-BENEFICIARY INFORMATION (same as above)
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How does financing work?
In Puerto Peñasco, you can purchase properties with owner-provided financing.
They usually require a 40% or 50% down payment, with a 6.5% or 7% interest rate over 3 or 4 years with a balloon payment.
Other financing options include direct financing from developers (condominiums or residential complexes under construction). They usually require a 35% or 40% down payment, and the remaining money upon delivery of the property (usually 6 months or more), depending on the developer.
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Purchase/sale options
1. Cash Payment: The buyer covers the total amount of the property plus closing costs.
2. Bank Financing (Mexico or U.S.):
* A 40% down payment is required
* The bank finances 60% of the property value
* The buyer is responsible for covering all closing costs (This process can take 30 to 60 days depending on the bank and documentation)
3. Direct Owner Financing:
* This is a short-term financing, typically 1 to 5 years maximum
* A 40% down payment is required
* The balance is financed with a fixed interest rate of 6% per year
* The buyer also covers closing costs
What's the difference between buying as a mexican national or as a foreigner?
Mexican nationals can purchase property outright under their name and only pay the standard closing costs, which vary depending on the price of the property.
Foreigners, on the other hand, are required to buy through a bank trust (fideicomiso) and become a trustee (fideicomisario).
This involves:
• A one-time setup cost of about $4,000 USD
• An annual renewal fee of approximately $500 USD
• Plus the same regular closing costs nationals pay
What's a trustee? This is you, the foreign buyer. Although the bank is the legal owner, you have all rights to use, enjoy, and dispose of the property. This means you can live in it, rent it, remodel it, sell it, or even inherit it.
The benefit of mexican citizenship
Being a dual citizen or purchasing as a Mexican national saves you thousands of dollars
Are you thinking about investing in our beautiful fishing town?
Let me show you why so many are choosing to make the move!
13 Reasons to Invest & Live Here
1-. Small-town charm — peaceful & safe.
2-. Only 1 hour from the Arizona border.
3-. Truly live and enjoy your life!
4-. Say goodbye to the stress of big cities.
5-. Wake up to the sound of the ocean every morning.
6-. No lack of Vitamin D here — sun all year!
7-. Mentally recharge with the stunning Sea of Cortez!
8-. Cost of living? Unbeatable compared to the U.S.
9-. Property taxes? Just a fraction of what you’re used to!
10-. Fresh, local food always at your table!
11-. Spend real quality time with your family!
12-. Friendly neighbors that feel like lifelong friends.
13-. Yes... you’ll actually know your neighbors!