Another day, another story about a Donald Trump venture that turns out to be full of it. Proof that while you may not be able to fool all of the people all of time, it is possible to fool some of the people all of the time.
But this particular property scam is in Rosario, and while Baja California does have the word “California” in the title, it most assuredly is in Mexico. And it begs the question – why on earth would any non-Mexican get involved with buying waterfront property in Mexico? Are there no Nigerian princes needing help securing their long-lost fortunes?
Article 27 of the Mexican constitution is crystal-clear:
Foreign citizens cannot own land within 100 km of the borders or 50 km of the sea.
The Clinton Administration should have insisted on the repeal of this article as a condition of NAFTA. The Obama Administration should abrogate NAFTA unless Article 27 (among other things) is changed. But Clinton didn’t and Obama hasn’t, and this is where we are.
It is really this simple: foreigners cannot buy coastal property in Mexico. So don’t do it. Foreigners can buy a fidecomiso, a trust agreement with a Mexican bank, but instead of owning land, the purchaser owns a claim against an investment vehicle that, if properly documented, will offer the possibility of a leisurely trip through the Mexican court system should something go wrong.
Huge amounts of money have been lost in the past six months, and it is hard not to be sympathetic to people who did not understand finance well enough to grasp the intricacies of the mortgages they were sold. But plenty of people seem to have gone off the rails on some basic questions – do I have enough money to pay this obligation, am I able to enter into it legally, etc. Something to keep in mind as we look at all of the plans being proposed to transfer wealth from savers to borrowers.
