There is a news report out about some investors losing their money in the area known as Rocky Point in Sonora, Mexico near Puerto Penasco. Whether this could have been avoided is arguable, or make that probable. Read the story and you get the sense that some of those who feel duped maybe didn’t thoroughly investigate the situation before handing over their considerable amount of cash to the developers before verifying that the developers had a clear title in place for the land that they were to develop, and the funds to follow through.

Mexico has long been littered with projects that were never completed. However, the foreign investment laws enacted in 1993 that allowed for gringo ownership via a fideicomiso (bank trust) have paved the way for tens of thousands of land transfers with no significant problems. If you follow the best advice and adhere to the laws, Mexico is a safe investment (nothing is 100% anywhere). But one thing is clear to me: you should be extra diligent when investing in any multiple unit, new project. It is imperative to ensure that the developers have all of their financing in place, and clear title in hand. And then there will still be some risk involved. That is the nature of investment and is pretty universal advice no matter the country. There are some flake developers out there…always have been. If it smells at all fishy, or too great, for that matter, take your money off the table and think about it for a while. Do more homework.

There are many reasons that I prefer single-family residences to condo, townhouse or planned community developments.  High on the list is that they are much cleaner deals with the risk factor hugely diminshed. You are dealing with one seller for a property where you can verify the ownership fairly easily. From there the steps required to purchase are very clear with the inclusion of a notario (a special real esate lawyer), as required by Mexican law.

I’ll be following this Rocky Point situation as it develops and let you know what I find.

Having your own transportation while traveling in Mexico has many advantages. You’re not spending hours in airports and bus stations, you can go wherever a road takes you, no time schedule and no annoying people (other than your travel partner who sings the same Led

Zeppelin song hour after endless hour). Of course, there is a downside of having the responsibility of knowing how to drive in Mexico, auto insurance, fuel costs, plowing into farm animals…and getting lost.

I’ll cover driving in Mexico in more detail another time, but for now I just want to encourage you to give it a try and to get a good road map. There used to be limited resources for maps, but now most of the major book stores and the better guide books carry them, or you can use the web. These web sites: www.mexicoroadlogs.com and www.maps-of-mexico.com/mexico_states.shtml do a good job covering most of the roads, and you can buy and download just certain regions or the entire country.

I like traveling between towns in a car, but it is also nice to have even if you have one destination where you are staying and want to see the nearby areas. A compact car can usually be rented for $20 - 30 per day. You can get the best deal by going to the major car rentals’ web sites and doing your booking online or by calling their 800 number. Many times the cost of the car for two days will equal the cab ride to and from your hotel. Just make sure you know where you’re going…and carry a good map.

For years, many of us have wondered why Mexico, with so many natural resources and hard working people, remains largely in poverty. Since volumes of analysis by people smarter than I have attempted to answer this, I’ll just add a couple of opinions based on my observations over a lifetime of Mexico study and travels.Many expats are drawn to purchase and live in Mexico because of the low cost of living, day-to- day. Whereas property taxes in the U.S. are used to fund multiple social services (schools, etc), in Mexico the taxes are so low that they fund very little. Property taxes on a $200,000 house are only about $200 per year. In fact, tax collection (corporate, income, etc) on a whole is very low in Mexico, totally about 14% of the country’s GDP, compared to about 28% in the U.S. So, you end up with a situation where people love moving to Mexico for the low taxes, but then bitch about not having paved roads, a well-paid police force, and crooked politicians…well, I guess those are everywhere you go.

Mexico has some very wealthy families, with Carlos Slim now the richest person in the world. At least ten others in Mexico are billionaires. They have the highest GDP in Latin America, including Brazil. This in a country that has an average daily wage of about $11.00. Mexico has a majority of its wealth concentrated in a very small upper-class, with a small and shrinking middle-class. The majority are poor and sinking lower every year . Why, you ask? Well, it’s the same old story. The rich don’t want to invest, to pay taxes, to fund the programs that help to build a middle-class….good schools, health care, transportation corridors, a living minimum wage…the list is long. The wealthy control the politicians who write the laws and they don’t want to tax themselves. That’s the simple story.

There is much to like about Mexico. It’s my favorite place in the world. But they, as a country, need to enact reforms that will benefit the majority. In the long run, everyone would gain.

When I first started traveling to Mexico, carrying money was an issue. Dollars were accepted in the border areas, but deeper in Mexico you had to have pesos. These days you can spend gringo dollars in the tourist towns throughout the country, but it is best to convert your money to Mexican money. You won’t be perceived as a rookie Mexico traveler (which increases the chance that you might get fleeced) and you don’t have to do mental math calculations when they give you change in pesos (not recommended while slamming margaritas in a cantina). When a six-pack of beer at a market is marked at 39 pesos you pay that amount in the local currency just like a local. If you pay with a $20 US bill, the clerk, if he accepts your $20, will give you change in pesos using a conversion scale to his liking. Most likely you will pay more for the brew that way.

I always save a wad of pesos from a trip so that I have will them available for the next time…usually around $50 - $100. That way, if I am flying in, I have pesos as soon as I land. The airport may have a bank window or a casa de cambio (money exchange), but they aren’t always open when you need them. The large airports (i.e.,Mexico City) now have ATM’s, but many do not. I also carry a couple of $100 US bills in a safe place (not my wallet) for emergencies at odd hours. Years ago everyone used travelers checks, requiring waiting in bank lines in order to cash them, which was a huge hassle. In the last seven years or so ATM’s have become very common all over Mexico, at least in any town large enough to have a bank. An ATM will offer you the best conversion rate and will leave you a legitimate paper trail. A case de cambio is the second best option, but that is for converting your US dollars into pesos, which requires that you carry cash. Why carry cash that you might lose when you can use plastic, getting enough cash every day for that day’s needs? The ATM’s also handle cash advances for Visa and Mastercard.

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