0:02 [music] Who are you and where are you [music] going? What do you want? Hello and welcome to Trust and Estates Weekly. I'm your host, Kevin Bemmel, and I'm here every Monday at 10:00 a.m. Pacific time to talk about estate planning and trust and probate administration primarily from the standpoint of professionals like myself who deal with this, you know, for our
0:37 business or in our professional lives, but but also for those of you who maybe you got appointed as the executive in your parents' will. this is not what you do for a living and now you're trying to navigate this opaque process. So hopefully you'll get some education and information here and you'll be able to talk to your advisors uh more in a more uh comprehensive way. So today I'm very pleased to introduce my guest Greg Gunter. And those of you who are regular watchers of the show, you know I always
1:13 love it when we go international. And uh Greg is is joining us uh from Mexico uh specifically from San Miguel de Aende and uh he is a real estate broker down there. Greg and I met uh I think it's a few months ago now. Um, we we had a a pretty lengthy conversation about what Greg does. And it it really struck me that this is an opportunity to kind of expand a little bit in in the uh subject matter that I cover in this show. Um because I I think what what what Greg
1:49 where Greg helps people uh in terms of their planning their retirement and and planning the life that they want, it fits square into the three pillars of attainment you see over my uh shoulder here, but it also dovtales very well with the topic of estate planning. And so Greg, thank you so much for for coming on Trust and Estates Weekly today. I really appreciate it.
2:14 >> You bet Kevin. Thanks for having me. It's great to join you today. I love the intro there that said, "What do you want? Where are you going?" That's exactly uh exactly what I'd love to talk with your uh your your viewers about.
2:26 >> Fantastic. So So Greg, I always like to start off by having my guests tell a little bit about themselves so that viewers get a sense of who they are, what their what their background is, and and and kind of get uh get a little bit familiar with them. So share share with us if you would um some of that background. Yeah, you bet. I could make this the whole novel, but I think we only have an hour, so I'll condense it down. [laughter] I'm I'm an American if you can't tell. I'm an American. I just happen to be living in a central Mexico uh v UNESCO village called San Miguel de Yende. It's
3:01 an expat destination in central Mexico where it's 6,400 feet in altitude. So when people go, "Do you go to the beach every day?" I'm like, "No, I'm five hours from the closest beach." So we're in the middle of Mexico. It's like the Denver of Mexico, basically.
3:14 >> Okay. It's a big expat destination. We've been named the number one small city in the world six different years by KNS Traveler and also by Travel and Leisure magazine.
3:26 >> So that's not just me touting how wonderful this place is that I I live. It's been actually voted that way by the readers of both those magazines. And team, I've lived here for 17 years full-time. So you can tell I love it. I've lived here longer than anywhere else. So in the states I was a primarily a commercial real estate developer. A little a little bit of a background I guess especially since a lot of your viewers are a little more finance and investment oriented. My undergrad is in architecture but my MBA is in finance finance and real estate. So after a bit of a short spin as a residential architect, I went back and got my MBA and got into commercial real estate
4:02 development.
4:03 >> So I did that most of my career and then this little thing called the great recession happened in 2008. Most of us remember that. Not too fondly most of us I suppose me being one of those my entire company went belly up. I was a in the commercial retail development industry and for instance we had three billion dollar projects that shut down within 72 hours of each other.
4:26 >> Wow.
4:26 >> So it was devastating. It took us about four months and we were under the rug. We were you know by March of 2009 we were done. And I uh you know my my my goal prior to this I I'm I'm guessing many of your viewers are kind of a little more goal oriented like we are and a little more focused on meeting those goals and kind of having an incremental incremental uh you know timeline toward making those goals and my goal had been to semi-retire in Mexico at the age of 50. Well, this great recession happened and I was suddenly uh devastated of my entire net
5:02 worth, my entire I lost every home, my personal homes, my investment homes, my business. I had no career left, no income left. I had been working on that semi-retirement goal in Mexico though prior to that happening.
5:15 >> So, I had a home waiting for me here in San Miguel that I had just recently finished about a year prior to that. So March of 2009, here I am flat broke and having no clue what I was going to do. But I said, "Hey, I got a home waiting for me in this marvelous destination called Semigandi. I guess I'm going to just move down there and see what happens." So I tell my clients, I kind of did that zen thing, you know, leap and the net will appear. That's what I did. I had no clue what I was going to do when I came down here. It took a bit for me to figure out that becoming a uh real estate broker was the best avenue for me
5:51 to pick up a new career. I mean, as I mentioned, I I had been a residential real estate architect earlier in my career. I've been building homes with my own two hands since I was 15. I've been in sales since I was the age of eight. Um, you look like you're younger than me, Kevin. So, you probably don't remember Grit newspaper from back in the what was that, the 60s, I guess it was. But I was selling Grit newspapers door to door on a weekly basis at the age of eight, if you can imagine. Lord,
6:22 >> I was selling I was selling, you know, stuff for the Boy Scouts door to door. So, around that same time. Yeah.
6:27 >> It's amazing what our generation did. I know eight-y olds now, they can't put a sentence together, and I can't imagine them trying to go door to door selling at the age of eight. So anyway, that's kind of my background, a condensed set of my background. I came down here and got into uh residential real estate and uh turns out I'm apparently pretty good at that because I was the uh you know top producer for my local office. I was the number two realtor in the entire country of Mexico for the largest franchise.
6:56 >> Wow.
6:56 >> And uh decided that it was time to go out on my own and open my own office. So, I called Warren Buffett's office and said, "Hey, Warren." Of course, I didn't get to talk directly to Warren himself. [laughter] I said, "Hey, Warren's team, aren't you ready to open an office in uh in central Mexico?" And they said, "Your timing is perfect. We just got our license to operate there three months ago. Let's go."
7:18 >> Wow.
7:18 >> So, I opened the first Berkshire Hathaway home services office in all of Mexico, right here in San Miguel de Yende. And as I said, we're a big expat destination. So all of my businesses toward Americans and Canadians that move down looking for second homes, retirement homes, investment homes in some cases. We'll get into that a little bit later in the show, but a lot of my clients appreciate the fact that my market, the best parts of my market can appreciate 20 to 30% a year. A year. I used to live in San Diego, California,
7:54 team. So for those of you viewers that are from Southern California, when I owned and I had I don't know a dozen or so properties in San Diego, they would appreciate 30 to 35% a year. I'm like, "Oh, this is cra this is insane. This is just like, you know, and I moved down here and we weren't appreciating like that when I first got in the business, but postcoid, you know, our demand has is risen so much that we now uh have proven to be an excellent investment opportunity for people that aren't even ready to retire yet. I get a lot of clients that are in their 50s. Go, hey, we can't retire for 15 more years, but we're going to buy now and just rent it as a property, bank on the appreciation.
8:31 So, it's a it's a it's a phenomenal lifestyle that I could go on about two hours about, but it's also a great investment opportunity for those of you listeners that are interested in learning about the investment perspective of San Miguel deande. So, so before we we get into more about the real estate side, I I do have to ask you because we it turns out we have a pretty similar background. I went to architecture school as well. I'm just curious where you studied architecture.
8:58 >> I got my my architecture undergrad from the University of Arkansas. I studied with FA Jones who was a disciple of Franklidd Wright. And at the time I graduated, we were the number one architecture school uh that had grads that passed the uh architectural licensing exam. So it was a a great background.
9:17 >> Yeah. So I went to the USC School of Architecture and fortunately for anybody who cares about urban beauty, I never did get licensed and practiced because [laughter] my designs were pretty horrendous. Um, but I ended up getting in in like you uh later in your career anyway, I got into the real estate business, real estate syndicator and then started my own uh company here in Los Angeles. So, uh I mean there is a there is a close marrying I think between architecture and the broader real estate business. And I'm I'm curious
9:52 uh how have you seen your architectural education and involvement as a practicing architect? How has that impacted what you do now?
10:06 >> Let me let me throw out two answers to that since you're in LA and for those Los Angeles uh listeners that might be curious about that. Have you ever heard of a project called Hollywood and Highland?
10:16 >> The one that's over, you know, where the Academy Award Theater is. the uh it used to be it's now the Dolby Theater. I helped build that. That was one of my projects I did in my earlier career.
10:25 >> Oh wow.
10:26 >> Those are the kind of we spent $685 million building that project. That was one of the bigger projects. So there was a lot of creativity in that. It was not your typical retail mall. You know, there was the storytelling of the history of of uh film making and Hollywood and so it was really a fantastic project to be involved in from a creative perspective. Very very unusual.
10:46 >> [clears throat]
10:46 >> My architectural background has served really helpful because I'm, you know, I'm I'm a real estate realtor and broker now. So, I'm working with clients that are number one coming down to a different country and and looking at homes that are built differently. So, it's a different construction technique, a different architectural style. We don't have the uh you know cookie cutter homes where you're choosing facade A, B or C, but it's the same basic floor plan. Everything here is oneoff. Everything here is unique. Everything here is built very differently. So that architectural background of mine comes in really helpful because I can brainstorm with clients on what they can do to, you know, rearrange a home. So,
11:22 you know, that's kind of where my dual background, my, you know, I told you my I've got the creative undergrad kind of like you in the NBA and finance and and real estate, too, where I I can walk clients through the creative changes that they might look at at a home from a an architectural and design perspective, but those that are a little bit more numbersoriented, I can walk through the ROI on a particular property or or even more appropriate for my market, and this is the same for Southern California, your IRR is really more critical down here. properties. You know, Southern California, all my none of my properties cash flowed. I was making an appreciation in San Diego. That's all I did. Right
11:57 >> here, they might cash flow, but you're not getting a great ROI, but your IR is phenomenal. So, you I can kind of walk clients through, not to tout my own horn here, but you know, I can walk clients through both sides, the creative side as well as the financial side. That's really helpful.
12:11 >> Yeah. So, before we move on, I do I do have to note I saw the Nutcracker Ballet at the Dolby uh in December. I I I I I think it was the first time I'd been in there or maybe just the first time in many many years. It is an amazing uh performance venue. I it was just
12:30 >> it it really was just a wonderful wonderful experience. So
12:33 >> yeah, that was a fun project to work on.
12:35 >> Yeah. Wow. I mean what what a what a great what a great thing. And and it is there is it is just steeped in Hollywood history when you walk around just through the the passageways and such of that project. It's it really is a fantastic project. So
12:50 >> So um talk to us if you would I just got want to track my time here. Talk to us if we if you would about um what how it works or well let me take a step forward. Why do people um consider becoming expats uh you know in in Mexico or or having you know a second home down there? What what are kind of the motivating factors lifestyle or or financial or otherwise
13:26 uh that that you know sparks people's interest?
13:31 >> You know mama taught me never to talk politics or religion. [laughter] We don't talk about you don't talk about those on this show by the way. [laughter] So,
13:40 >> exactly. So, I won't get into the political aspects of it, but you know, many people are not terribly comfortable with what's going on in the United States and are looking for a little change of pace. And so, uh, you know, that that's been a huge trend. I I don't know if you follow those kind of numbers, expats moving to really all over the world. Mexico is one of the biggest expat destinations simply because of our proximity to the US. you know, I could be back. I mean, when I first made the decision to move down there, I thought I was still going to be running my old business, which meant I I needed to be close. I needed to be, you know, two hours away from, you know, an American airport where I can get up to my clients quickly. So, Mexico was kind
14:17 of an obvious choice for a lot of people because it was so close. Um, you know, easy to get back to family and friends, business appointments if you still have business, you know, that kind of thing. Then within the country of Mexico, that's where you need to kind of decide what's your lifestyle. what you know what what what suits your lifestyle. Well, I grew up my last couple years of high school in a very humid environment in the south and I said, I'm never living in the humidity ever again. [laughter] That's what I loved about San Diego. No, no humidity to speak of at least.
14:47 >> Um, you know, so I quickly rolled I was I knew I was going to live there full-time. I'm one of the rarities, you know, I've lived here full-time for 17 years. Probably 17 70% of my clients, this is a second home for them. So they're going back and forth.
15:03 >> So even even those 70% though they still like the climate here and that's was one of the ruling factors for me. I knew I couldn't live on the coast in Cabo San Lucas or Portoarta or you know Aapokco or you know especially any of those kind of places [clears throat] way too hot and humid. So Samiguel deende and a little place called Chapala Lake Aihi Lake Chapala and the little town of Aihik those are the only two inland destinations where expats tend to congregate. um they both have a larger English language infrastructure. However, Lake Chapala and I'm one of those analytical guys. Remember, I've
15:38 got an NBA in finance for God's sake. I had to, you know, rule out all the all the aspects of both of those. So, I I did have to go check out Chapala. I'd already been to San Miguel once to visit and fell in love to be honest with you and said, you know, I spent the whole week looking for a lot to build my first home to be honest with you. But, you know, I was still in the depths of my career and you know, busy busy all that kind of stuff. It took a while before I could make the decision. So in the meantime, I had gone to Chapala to kind of check. Chapala doesn't have any kind of history. It doesn't have the architectural preservation that we have. It doesn't have the I tell my buyers we my clients that are coming down here, we have the largest
16:13 English language, social and cultural infrastructure of anywhere in Mexico and that is lacking in the Chapala area as well. So here, you know, yes, back to your question, why do they come down? lifestyle is is a lot of the reason I can stay disconnected from the news as much as I want. I never have the TV on, for instance, you know, so I'm living in my own little slice of paradise down here. I don't care what the cost of gas is. I walk everywhere. Who cares what the cost of gas is because I walk everywhere. My little village is 175,000 people. I can cross the entire city on foot in about 25 minutes. But I'm about
16:50 a 12minute radius from the center of town. What we would think of as the town square,
16:55 >> if you remember old little towns that had a town square, my mama grew up in one of those, you know, so I remember having a town square. Well, we have that here. And uh everything radiates out from that town square. So the closer into that walking distance to the town square is, the more walkable your lifestyle is. And that's exactly the case. A lot of people love that. You know, in the United States, they have walkability indexes that rate uh, you know, neighborhoods for their walkability to shops and restaurants and, you know, lifestyle factors. We would rate 110% on that 100% scale, you
17:30 know, because everything is walkable here. So, that walkability is part of the lifestyle. Our little town of 175,000 people have 650 restaurants. We have more restaurants per capita than anywhere in Mexico. We have become the culinary capital of Mexico. We're the equestrian capital of Mexico. We're the second largest wine district in all of Mexico. For those of you Southern California, you know that Baja is the biggest, but we are now the second largest wine district.
18:01 >> Wow.
18:01 >> So lifestyle is a really big factor here. And then affordability is uh you know kind of a secondary factor. It's not something to poo poo. I mean it is you know people do move here for the affordability aspect of it. I tell my clients because of the demand you know a lot of people love moving here.
18:20 >> I mean once you've been named the number one city in the world six different years people start paying attention and going wow I got to look into this place. I I I might want to move there.
18:28 >> And that demand has caused us to start going through what I call the aspenization process. You know we are kind of becoming a bit of the aspen of Mexico. So that that raises prices of course and um we are becoming one of the more expensive cities in Mexico but still on a relative basis to the coast. Our real estate here can run onethird to one or in my case I had a client that moved here from Monteito. the home that he bought here is one nth the cost of this home in Monteito,
18:59 >> right?
19:00 >> Um so real estate is you know roughly 1/3 to 1/5 but the cost of living can be even less. So the cost of living is very affordable for people once you get your home here. Our price is you know really the median price home price here runs about the same as the rush belt or final belt but the cost of living is what really makes things much more affordable. And when you buy a million dollar home here, it's easily a5 to7 million home in Southern California, just as a comparison.
19:28 >> Wow. Let's take a quick break and we'll come back for some more.
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20:13 or visit magnumprops.com. So you you you mentioned that there's about 175,000 people there as I recall that at least at the time I was living in Santa Barbara which as you probably know is about an hour north of Los Angeles. It was about that size. So and I mean Santa Barbara was an amazing place to grow up in because of the size. Uh you know as a kid I could ride my bicycle anywhere. Um uh maybe in terms of you know land area it's larger than
20:48 San Miguel but uh um population it sounds very similar. So uh it it it really is a a different lifestyle growing up or or living I should say in a in a community of that size versus versus you know a me megalopouloolis like Los Angeles or San Diego or you know other large cities. I I presumably, you know, Mexico City as well.
21:13 >> Yeah. Yeah. Clearly a lot of people our age, you know, remember those smaller we remember our childhood in smaller areas and how how comforting it was. And and that's the wonderful thing about San Miguel de Andy, we are like a European village. We're very dense. And so when I tell my clients, if you're walking to town and you think it's going to be a 10-minute walk, you better almost double that because you're going to run into three people that at least three people that you know. You know what I'm saying,
21:38 >> right? Yeah. I love that fact. I've never been fond of small towns. I I grew up living in small towns. I was a military kid and we always lived in small towns and I hated that. There's nothing to do and you know it was a down here we call ourselves little Manhattan because there's so much to do. You can exhaust yourself, but it's a small town environment from the standpoint that you know everybody. You always run into people you know. You know, you don't dare go to the grocery store in your bathroom row because you're going to run into five people you don't know that in the grocery store, you know. [laughter] you know, that's that's a fun environment. And I wanted to pick up on your your ad a little bit about the the
22:14 you know, if you've if people have uh inherited properties from family, you know, we've been an expat destination since the late 30s, especially post World War II.
22:25 >> Um there was an art uh institute down here that catered to the GI bill. And you know, the GIS post World War II would get a $500 stipen that they could spend on education. And so a an art institute was formed down here. The wife was American, the husband was Mexican, and she was intelligent enough to market to the GI community. So the GI started coming down here and, you know, doing art, taking art classes on their $500 stipen when rent was 15 bucks a month and, you know, it was a nickel a beer and they could live like kings on 500 bucks a month, right?
22:56 >> And many of them would stay for the rest of their lives. And, you know, they were buying properties back then for $5,000 that are now worth, you know, $2 million. So, I've had a number of clients that have come to me and go, "Hey, you know, mom passed away and she had this property down at Samuel. I don't even know the first thing about it. What am I what am I going to do?" So, we take care of a lot of that, too. You know, people that have had their parents or grandparents that had homes down here for, you know, decades. [clears throat]
23:19 >> And it's an entirely different market. It's like those, you know, GIS that settled back in San Diego and bought a home in 1952 for, you know, $45,000. It's worth three million today.
23:30 >> Right. Right.
23:31 >> Similar.
23:32 >> Yeah. Yeah. For sure. So talk about the process of uh buying a home either, you know, an already improved property or maybe buying a lot and building a home. I I can imagine it's it's significantly different than it would be, you know, here in the United States or than it would be in Canada.
23:52 >> Well, here's an interesting point about us, Kevin, here in central Mexico. Mexico has a prohibition of owning property near the coast or the border. So when you want to buy a condo in Cabo that you're going to be going to, you don't actually own it. You hold it in what's called a bank trust. The Mexican Spanish term is called a coniso, but you don't really own it. It's held in a bank trust versus in central Mexico in my town, you own the property here with a the simple deed just like in the United States. So ironically, much of the real estate process here in San Miguel is very westernized, very Americanized.
24:28 >> You know, we use escro companies. There are lots of places in Mexico that still don't use escrow companies. And we use, for instance, my company. We use an American escro company that's licensed and bonded and insured. Our process is the paperwork is very much like in the US. You own a fee simple with a deed in your name. So, ironically, a lot of the process at least in San Miguel deende is very similar to the United States. That's another reason why a lot of investors like coming down here because it's a product and a process that they're more comfortable with and familiar with. So that's the good thing about here versus along the coast which is where you know way more people own
25:05 homes along the coast but they think they own it and they don't really it's a commiso. So, you know, that's another one of those kind of political things. You know, uh, our presidents don't always see eye to eye and people go, "Oh, what if something changes?" And, you know, I'm like, "Yeah, that's the nice thing about here. You got a deed in your name. Nothing's going to change here. I don't care how much the presidents don't like each other. Nothing's going to change. You're always going to own it. Be simple. Nothing's going to change that."
25:27 >> Right. Right. And and what about other issues like um insurance, property taxes, how do those kinds of um you know expenses and and you know issues of maintenance of title and all of that uh title insurance. How do those how do those things work in in Mexico?
25:47 >> As a Los Angeles, you're going to want to sit down for this, Kevin. Okay, I'm going to talk about property taxes first. [laughter] Remember I lived in San Diego. I at one point I had I think eight properties, you know, in San Diego. I was my property tax bill is like almost six figures. It's crazy. Property taxes down here will run $250 for every $100,000 of value. Do the math real quick. I'm sure you're mathematical, you know. I mean, you can own a million dollar property is going to run you about 1300 bucks a year. A year. You know, my client goes per week or per month. And I'm like, no, no, that's really the
26:22 whole year. [laughter]
26:23 >> Wow. fraction of a percent.
26:27 >> I mean, we think we're good here in California where it's limited to 1%, right? But [laughter] wow.
26:32 >> Yeah. No, it it's amazing. The property taxes are super low. Utilities are super low. You know, water is going to run you about 25 bucks a month. Electricity is a buck a day. Internet's a buck and a quarter a day. Your cell phone's a buck 30 a day. Uh, I mean the over I was telling you before we got online here with our listeners that I have a maid. She cooks, cleans, does my laundry, buys my groceries, buys my flowers, and then arranges them. Uh, does basically everything. Runs my household, and she's the equivalent of six bucks an hour.
27:07 Love it. I tell my my clients I haven't done dishes or laundry in 17 years, and I love that the lifestyle is extremely affordable, you know. Same thing with meals, going out, uh, you know, going, you know, I I I have a massage therapist that brings the massage table to the house and does, you know, massages for me here in the home or up on my roof terrace. And, uh, what would be a $350 massage in uh, Southern California, if you can even get them to come to the house, right? I mean, I bet you've never had one come to the house. You know, it's 350 bucks and you got to go there.
27:41 >> She'll come to my house and she'll do a 90-minute massage for about 70 bucks. It's just wow.
27:45 >> You know, that's just an example of the affordability of the lifestyle down here. So, we can treat ourselves, we can spoil ourselves, actually is kind of a good way to put it quite comfortably down here without having to have a huge network or you know, that that's the wonderful thing. And again, I don't live here because of the affordability, but that's a nice side factor. You know, it makes it gives me more more uh of a budget to travel. I travel extensively from here. And you know, we can I'm two and a half hours away from Mexico City and you can get anywhere in the world, of course, from Mexico City. I can fly directly to Europe and South America. And so that that allows me a lot more of
28:20 a budget for travel, which I love to do.
28:24 >> So here in California, when when uh you know, when when one owns real estate, aside from property taxes, the biggest issue is insurance. I I'll just give you an example. I just recently insured a commercial property um in in you know a small city in San Bernardino County and the insurance premium was $40,000. Okay. This was not some big huge property. It's a it's a you know modestiz property. So I'm I'm wonder and and insurance in California just in general is it's a very difficult issue
29:01 as it is in many other places in the United States. What is the insurance market for real estate like in uh in Mexico?
29:10 >> And in your market, Kevin, god forbid you should want earthquake insurance. Earthquake rider. I mean, well, that would triple that, right? If you had an earthquake rider,
29:17 >> I think so. Yeah. I don't have an earth I could, you know, the property couldn't afford it.
29:22 >> Exactly. Exactly. So, the nice thing about us in San Miguel de Yendi is we have no natural disasters here. No, a lot of people heard earthquakes in Mexico City, but that's that's four hours away, you We don't have any earthquake uh faults here. We have no tornadoes, no hurricanes, no floods. Everything is made from masonry, so nothing can burn.
29:42 >> You know, you'll have those wood beams up in the ceiling, but they're fake. They're there for decoration. I mean, they're real wood, but they're decoration. They're not they're not structural,
29:50 >> so [clears throat] nothing can burn. So many of my homeowners do not even have homeowners insurance. You know, if the window breaks, it's 20 bucks to fix the window, you So, why would you pay for a homeowner's premium when it's so cheap to fix things?
30:03 >> So, many of my homeowners do not even have homeowners insurance, at least not for repairs. If you're like me and you have a house full of antiques, of course, I have and I I do have homeowners insurance because I I actually downscale to a penthouse condo. I have to have a more extensive policy for the condo. But for single family homes, many people do not. Or they might have just contents coverage for their antiques and goods like that. So insurance, even if you do have it like I do, it's a very affordable uh difference. And I mean, you can get chub insurance down here. You can get any of the big names that you can imagine. You can get that uh level of coverage down
30:39 here, but it's exponentially more affordable in in Mexico. Same with car insurance, by the way.
30:46 >> Oh, wow. I mean, that's it's it's the the the cost differentials really are astonishing is really the only way to to to put it. So,
30:59 >> yeah. Yeah. I I tell clients, you know, the real estate, you know, a lot of people, a lot of people that aren't that educated or still learning about Mexico, they hear about, oh, I can buy a house for $100,000. Not in San Miguel deande. You can't even buy a condo for $100,000. You know, that doesn't exist in San Miguel deande. just to give listeners a little bit of a view. Uh you really can't get a a a condo for less than about a 250. And even then that's going to be uh you know not not that great of a condo and that's going to be way out on the edge of town. It's not going to be walking distance. And that walking distance equation is really what people are looking for down here.
31:34 >> So to get a home that's in a safe area and walking distance is going to start at about 400 and go up from there. So, you know, but that 400 home that I'm talking about would easily be a million two, a million and a quarter in, you know, in LA. Uh, so, so the the the carrying cost or nothing, you know, a million- dollar home, the carrying cost for a million dollar home, and when I say carrying cost, property taxes, insurance, staff, utilities, the whole thing. A million dollar home, your carrying cost might run three to $4,000 a year. People, by the way, have no mortgages down here. Typically, this is
32:09 typically an allcash market. That is one caveat to be aware of for your listeners. You know, especially if you're wanting to leverage your money. Obviously, you cannot use American financing in Mexico. You can't collateral an American bank. You can't collateralize a property in Mexico. So, um we do have an American company now that does uh property loans in Mexico, but because we're Mexico, there's always that risk premium tacked on. So mortgages down here will run 300 to 350 basis points more than a mortgage in the United States.
32:43 >> That means they're running about nine and a half or so percent now. And most people go, "Oh my god, I I don't want to pay nine and a half% now."
32:49 >> Right. Yeah.
32:49 >> A lot of my clients will do, they'll take out a heliloc or you know, a second mortgage on a an equity rich property. Especially you guys in Southern California, you know, if you've owned a property for 10 years or 20 years, you know, you got a ton of equity in it, right? right?
33:02 >> You can take out a heliloc or a second mortgage on that or a margin loan on an investment account. Those are much cheaper sources of funds to buy down here,
33:10 >> but you know, we are tend to be I mean, I've sold over 350 homes in this market in my 15 year career here and I've only done two deals with mortgages.
33:20 >> Yeah.
33:20 >> Yeah.
33:21 >> Really interesting, huh?
33:22 >> Yeah. So, that is a very different aspect. Let's take a quick break and I want to follow up on that issue because I think that's an important one for us to talk about. You bet.
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34:12 searching. So, you know, when when one is thinking about uh buying real estate for investment, usually here in the United States anyway, we're thinking about some kind of leverage, you know, leverage investment, right? Because that typically will, assuming it's positive leverage, right? It's going to it's going to enhance the cash on cash return. So how are how are people looking given the the um you know the the the fact that you know almost 100%
34:48 of transactions are all cash transactions. So how does that impact the you know investment side of of the market? you know, my clients that are looking for uh that are not moving down here full-time. In fact, you know, literally the majority of my clients, probably about 70 or so percent of them are not here full-time. And and what they want to do is they they tend to, hey, as long as I can cover my carrying cost. I'm like, you could rent your property for a month and it would cover the carrying cost for the entire year. But some of them are looking for more of a natural investment. They go, yeah, you know, I'd like to get a a good ROI.
35:24 Generally, you can get a an upper or a high singledigit ROI and in some cases up to maybe 13 or maybe even 14% ROI on a property down here. That's not high enough for most of us. That's still pretty low for a lot of us. But again, that's why I say most of you, my intelligent clients, I'm talking about IRRa, internal rate of return, because you're taking into account the appreciation, and that's really more of the uh financial equation for people down here. Now, of course, just like in LA, that can vary widely from, you know, Beverly Hills is going to appreciate a little different than East LA, right?
36:00 So, it's a little different here as well, but you know, well properties in Centro within that walking distance that have a truly authentic Spanish colonial design aesthetic to them. They can postco at least, they've been appreciating 20 to 30% a year. So, that's really the numbers that you want to look at. That means you want to work with a really uh experienced uh realtor down here that has a lot of history and experience to steer you in the right direction. They, you know, we don't have an MLS down here, by the way, Kevin. That's another interesting thing. We don't really have a real MLS. We do have
36:35 >> what's basically a depository, a repository of listings. Does not provide any history. It does not provide any statistics. And because of that, we have no Zillow or Red Fin or Trullia. So, it's really critical for um buyers that are coming down here. Even if you're not an investor, you're just buying a home on your own, it's still good to work with a very experienced realtor who can provide the history of that particular home or that particular neighborhood and go, "Hey, you know, properties in this neighborhood are only appreciating three to 4% a year versus down here in this pocket of centro, they'll appreciate 20 to 25% and over here maybe 30% and you
37:12 know, down over here maybe only 12%." So, you know, that's really critical who you work with when you're coming down because that can vary dramatically and you can't look it up online. You know, we got so much limited exposure online. I've got people that go on on chat GPT and look something up and they'll say, "Well, AI told me this." I'm like, "Oh, that is so far off base. I've lived there 17 years. Trust me, I know that that's not accurate." You know,
37:37 >> right. Right. [laughter]
37:38 >> You have to work with a few more human experiences down here to get more accurate information. And that's really critical to work with someone that's got a lot of history.
37:47 >> So that again, that's another interesting aspect of that that there isn't that kind of data infrastructure. Um, you know, you can't go down, I guess, to the county recorder's office and, you know, look up a deed and find out what the transfer tax was and, you know, back into what somebody paid. So,
38:05 >> right. How how does one track um you know property prices and property values? Uh h I mean how do you how do you do so? I mean
38:17 >> even even for realtors like me I mean the the limited information that we have we don't have a you know like in the MLS you could say okay Brentwood I'm going to pull up you know the stats for Brentwood and you can say it's appreciated x amount you know last year and x amount over the last five years and you know that kind of we can't pull up those. So, in all honesty, they're kind of anecdotal. So, you work with a guy like me that's sold more homes than anybody else in the entire city of San Miguel deende and I've been here for doing this for 15 years. I can go, hey, I've seen that property sell three times in my tenure here and each time it's appreciated this. And I kind of do the math on I go, okay, that one located
38:52 there is appreciated this much versus this one over here has appreciated that much. So, honestly, it's more anecdotal history. And that's why I say working with someone that has a long history and a lot of experience. I mean, you know, also the fact that I've sold 350 homes, not, you know, here's another little interesting statistic, Kevin. We have 275 licensed realtors in our little town. More realtors per capita than any other town in the entire city. I mean, in the entire country of Mexico.
39:21 >> Wow.
39:22 >> 275 realtors and only about 350 to 400 sales a year. So, do the math on that. There's a lot of realtors that don't sell anything. I typically sell 25 to 30 homes a year. Me, me alone,
39:33 >> right?
39:34 >> Carrying about eight to 10 percent of the market sales here for the entire city. So, there's a lot of people go, "Yeah, I'm a realtor. Come work with me." And they haven't sold anything for the last three years.
39:42 >> Wow.
39:43 >> So, that's say, you know, working with somebody that's got that history is really critical. And there it's more anecdotal. They go, "Yeah, I know, you know, this home." In many cases, when you're looking at a home, they'll go, "Yeah, I know the sellers, you know, they bought it for this reason. They're selling for that reason. and they bought it for this,
39:57 >> you know. So, working with someone that has that uh market knowledge because you can't find it online is is really, you know, really helpful.
40:06 >> So, so this may not be applicable, but what about uh you know, families maybe who have children who were schoolaged. uh h you know, how does that or I guess does it and if so, how does that fit into uh you know the the market and and the lifestyle of of of San Miguel?
40:29 >> Yeah, we have a a good educational system here, a really good educational system here. A lot of bilingual schools, a lot of international bilingual schools here, you know, the Waldorf schools and you know, a number of different ones. Um, so the educational system here in San Madel proper is very good, especially through the 10th grade. I do have some clients that have sent their kids to Carthro, which is a Let's talk about that a little bit, Kevin. Caretro is a city of two and a half million people that's only 45 minutes away.
41:00 >> So, a lot of the higher education systems are, you know, people that that want their kid to be a little bit better educated for the last couple years of high school might send into Carthro, which is 45 minutes away. I mean, for some of you in Southern California, 45 minutes is a day to commute or worse, you know, to get to school. So, we think of that as a whole different city and that's, oh my god, that's so far away. But, you know, yeah, when I can walk everywhere, 45 minute drive seems crazy. But for you guys, that's nothing. You know, that's not any kind of a challenge. So, educational is there. Well, I'm talking about it just a little bit, Kevin. Cthro, the city of Kettor has again fastest growing city in Latin
41:36 America. Two and a half million people. anything that you might need, any kind of specialty medical care, any kind of all of our big boxes. You know, that's what we love about our little village here. We don't have Home Depot and Costco and Sam's Club. You have to drive 45 minutes away to Penro to get that. That's wonderful. We don't mind driving 45 minutes to keep it out of our town. And, you know, we have a more of a small town village feel. That said, however, we have I'm getting into the lifestyle there a little bit, Kevin. But, you know, that said, we have a marvelous, we have three huge grocery stores here. One
42:11 of them is a supertore that you need roller skates to get around on. The other is a gourmet market. Like I I used to tell clients, you know, I've lived here 17 years, so I've kind of lost track. I bought Whole Foods has become back in my heyday when I lived in San Diego, Whole Foods was paradise. And I understand it's not quite that anymore.
42:29 >> We have the equivalent of a Whole Foods on steroids down there. I could buy live mean lobster in my local grocery store here. [laughter] Despite the fact that we don't have a Home Depot or or a Costco here, I do have a grocery store where I can buy a can of caviar and a live lobster next to my stack of tortillas. [laughter]
42:49 >> Wow. So, you can you can have lobster uh you know, tacos or something, right? [laughter]
42:55 >> Exactly. We do. Yeah. So, just a follow-up question on the the education issue because um while we've been talking about about this primarily as, you know, kind of a a second home or a retirement home market, it it strikes me that, you know, part of an expat market is is family. So, uh how what experience do you have with children? And when I say children, I mean, you know, teenagers and younger. Um, integrating into the community
43:31 there. Um, you know, be, you know, living a life there that, you know, I guess doesn't leave them pining for, you know, [laughter] being for for all the things that go on here in the United States. Uh, because it seems like, you know, the classic thing is kids growing up in small towns, all they want to do is leave, right? So,
43:50 >> yeah, that that that tends to be true. And you know, in all honesty, Kevin, my average demographic here is probably I used to say 80. I I would I would say now my average demographic is about 72 because I've got more and more younger buyers in their 50s that are coming down and buying even in their 50s. Most of them have grown kids at that point.
44:06 >> Got it.
44:06 >> So, I've got fewer clients. We've got a lot fewer clients that do move down here with their kids. I mean, that said, I sold a home um two years ago to a couple that moved here, a Dutch couple that moved here from Europe with with seven year olds. And um you know so there are more and more families moving here and um you know there are smaller organizations. It's not quite like you've got the Boy Scouts down here but there are smaller expat groups that get together and create activities and clubs for the kids to kind of keep entertained. We have two golf course communities and one in particular has a very active social program. So you
44:43 you're taking the kids to go trick-or-treating or Halloweening or, you know, Easter egg hunting or things like that over at the country club and the golf course. So they kind of make up for a lot of the uh children's activity and infrastructure. I mean, we have a big sports facility, for instance, where the kids can go play, you know, tennis, basketball, run the track, you know, pickle ball for the older generation, you know, that sort of thing. But in all honesty, it's probably uh you know, not as geared toward the younger families. As if for instance, I'm selling a client's home. He moved here with uh
45:19 with his his partner who is Mexican. That's part of why they moved here and they heard the lifestyle there was so great, but they have a 15-month-old. He goes,
45:27 >> "Just not a good city for a 15-month-old. We just we can't push the stroller down the cobblestone streets. [laughter] Not without waking up the baby.
45:38 >> Exactly. Exactly. Yeah. Yeah. So, there are challenges for younger families moving here and that's truly why we are more of an expat retirement destination. You know, most of my demographic are older. Um, you know, it's it's tougher to work down here. I mean, I do it obviously, but it's tougher to work down here unless you're working, you know, remotely on the internet for your client your your company up in the US. So most of my clients are older and you know the kids are grown and you know when the when the grandkids come down it's just for a week. Well we can certainly keep grandkids and kids that age occupied for
46:13 a week or two.
46:14 >> Sure.
46:14 >> On a long time basis it's a little bit of a different situation. You know it's more of a
46:19 >> you know because we've got 500 years of history and culture here. It's more of a cultural and historical destination. So your kids need to be a little bit more oriented or geared toward that orientation. You know it's not a beach community in other words. Yeah. Yeah. So, we're we're getting to toward the end of our time together um at at least for for the for this show. [laughter] So, but um any other uh issues that that you think people ought to know about um in in just maybe just in general um you know being an expatriate uh in in Mexico
46:55 or or in uh you know San Miguel de Aende specifically um that I haven't asked about until now. Well, one of the good things to know about Mexico in general and seig in particular is that it's an easy residency visa program. And by the way, when you live here, like I've lived here 17 years, you don't become a Mexican citizen, you get Mexican residency. Okay? So, I get a I've got a green card just like, you know, we talk about the green cards in the I've got a green card in Mexico. I've had one of those for 17 years. Um, it's very easy. You know, Portugal likes to tap their or they used to have their golden visa
47:31 program and gets even easier here. So, it's based on a monthly income or a savings threshold or an investment in real estate and especially for the invest for the uh savings threshold or the monthly income threshold. It's quite easy to get a residency visa here. So, that's a good thing to keep in mind. Much easier than Portugal or Spain or Italy or you know those kinds of European destinations. Mhm.
47:56 >> So that that's a good consideration is you can live here full-time with a permanent resident. I I never have to renew it. I've had it 17 years and it's good for the rest of my life. That's a
48:05 >> that's a really marvelous factor to keep in mind. And again, you're not renouncing your American citizenship. So I still pay taxes in the US, you know, pay taxes. That's because I'm working of course,
48:15 >> but you know, I'm still paying taxes. But you know, here's another interesting thing for those of you listeners that might think about still working like I am. Mhm.
48:22 >> You know, you've heard of that foreign in foreign earned income credit situation. I won't get into that. That's a whole another episode probably.
48:29 >> Yeah.
48:30 >> But I'm able to pay myself through my own uh American escorp. Uh because I'm an American living in Mexico full-time but paying American taxes, I pay a lower tax rate. So, that's another good thing for people that might want to open up their own business down here. It's tough to work for an a Mexican employer, but it's easier to open up your own business because Mexico loves that. If you're employing six or eight other Mexicans and giving them jobs, they would they love that. And so if you set up that kind of a corporation where at least for yourself personally, you can operate
49:05 under an American corporation, your tax basis is lower because of that foreign earned income credit. That's something [clears throat] to really keep in mind. It's a nice benefit. Well, you know, uh, we are going to have to have I mean, I'm going to have to have you back because that that is a an interesting aspect that unfortunately we don't have time to explore. Um, but but it's interesting because as you were talking about, I was thinking, you know, what are the the tax ramifications of of that? So, uh, so I I'll have to have you back, Greg, and and also just kind of get an update on what's happening down there. see if the,
49:40 you know, the property values are are still increasing at those pretty pretty eyepopping rates and and and you know, how how things are developing there.
49:49 >> You know, Kevin, the nice thing about owning a property is you can ride off those trips to San Miguel to check on your rental property, right? So,
49:56 >> absolutely. [laughter] Very.
50:00 >> Well, Greg, thank you so much for spending this time with me today. I really appreciate it and I I think the you know viewers are are are going to be fascinated uh by the you know this option. This is this is kind of a new concept for me to explore on the show. So I really appreciate the the kind of uh information and and and depth that you were uh you know you were you were going so that people can understand what that's all about. Happy to help, Kevin. And if I can throw this out, you're probably going to add this at the end of the video, but team, if you have questions, you know, even lifestyle questions, you know, I'm not I'm not
50:35 about selling sticks and bricks. I'm so talking about selling a lifestyle down here and potentially financial return as well, but you know, the lifestyle here. So, if you have any questions, you can reach out to me, Greg Guner. Again, you see my name on the screen there. My number is, my toll-free international number is 8778784141 or email me at gregregorygunter.com. Happy to answer any questions that you might have, even from you, Kevin.
51:05 >> Absolutely. [laughter] And and for those of you who maybe didn't quite catch that, if you look just down below where you're viewing into the show notes, uh Greg's information is is there and you can you can contact him and as he just indicated, he'll be he'll be happy to uh talk with you or or you know, email with you, answer your questions. And I, you know, I encourage you if if you've been kind of intrigued by what we've been talking about here, uh, you know, it it never hurts to learn more about it. Maybe this is, you know, the right solution for you. And if so, it it needs
51:40 to be built into your estate plan. So, this is one of the reasons why I wanted to have Greg on on this particular show is uh, you know, it's it's I talk about this all the time. It's important to have an estate plan. It's important for it to be up to-date, but it also is it's important that it be an expression of how you want to live your life and what you want to have happen after, you know, as Shakespeare said, you shuffle off this mortal coil. And so if if it is going to involve uh, you know, a multinational jurisdiction so that's
52:15 going to be a little bit different. it's going to be a little bit more complex than if you're everything is, you know, domestic or or in one state in the United States. So, it's, you know, it's something to look into to understand to make sure that you're well advised. So, I I want to thank thank you all for for joining Greg and me today. Real quickly, my schedule of shows, uh, Mondays, like today at 10 a.m. Pacific time is Trust in Estates Weekly. Tuesdays at 10 a.m. Pacific time, Business Lessons from the Military. Wednesdays at 10 p.m. Pacific, people making money. And then every other Thursday at 5:00 pm Pacific time
52:52 is my show, Jiggers' Place. We uh have a cocktail and a schmoo and talk about all the things not related to uh finances. So, lots of times for us to be be together during the week. So, Greg, again, thank you.
53:06 >> To that one.
53:07 >> What's that?
53:08 >> I'll bring margaritas to that one.
53:10 >> There you go. [laughter] I may have to come down and visit you. We'll have to do a a remote on that one.
53:17 >> Thanks again for for being my guest today. I really appreciate it. And and that just leaves me to say again, folks, thank you so much for watching. I hope you have a wonderful rest of the day. And signing off as I always do. Marie darling, you are my bell.