FORECLOSURES

Mexico 2017 | CONSTRUCTION & REAL ESTATE | B2B

Pioneers are entering the Mexican real estate market with solutions to further develop foreclosure opportunities.

Coral Quintero
CORAL QUINTERO
Director General
UpTown Remates Hipotecarios
Omar González
OMAR GONZÁLEZ
Director General
Portafolios Hipotecarios

How has your company filled a gap in the real estate market?

CORAL QUINTERO In the past, it was difficult for someone to have access to a pre-foreclosure opportunity. Therefore, we decided to offer all the people who are interested in the investment opportunity and product a follow up tailor-made procedure with the main focus and final goal being the property. In the past, a pre-foreclosure was not available to the public Mexican market. Individuals interested had to have an internal contact with banks, take the risk, and deal with their own process.

OMAR GONZÁLEZ There is no regulation that standardizes this market; therefore, we created Portafolios Hipotecarios to give credibility to this line of business and its investors. Unfortunately, there have been many companies that take advantage of investors. We do not do this, and we strive to make them feel confident about where they invest. In the past, there were no solid companies in this business and many had a bad reputation for committing fraud. Portafolios Hipotecarios is today the leading company in the market. We have a transparent and clean image and are pioneers in the market. This clarity has helped us grow exponentially. Our company was created with capital from investors. With that capital we made a portfolio of properties before purchasing and reselling them. We acquire properties at a low cost before reselling them at a much higher price. The advantage for investors is that with us their money is guaranteed with a property that has an attractive profit margin.

What is the profile of investors you work with?

CQ There are two types of clients. The first is investors who invest in our services by buying assets with legal deeds at the beginning stage and resell at a future stage, obtaining a monetary benefit since there is an increase in the legal deed's price from one stage to the other. As time passes and the procedure advances, there is an increase in the cost of the assets' legal deeds and that gives our clients a good resale profit. The other type of client we have is one whose final goal is to obtain at the end the property title in order to live there, rent out, or resell with a real estate agent at a normal price. In Mexico, there are different types of pre-foreclosure deeds with different budget range, giving our interested clients a diverse world of possibilities in which to invest.

OG There are two main profiles. First, people that want to purchase cheap property, for which we find foreclosed properties at cheap prices. The profile of a person who is looking for a house is middle- to high-income and is normally looking for an inexpensive property. If it is for leasing, that property may function as an additional income or pension. Our second type of investor is someone that has savings they do not want to put in banks because of the small margin. Hence, they would rather invest in a property portfolio, where there is no risk of losing, but a guaranteed profit. There is a great potential in this kind of investor. People that are looking to invest want to make use of their money quickly. We find a property portfolio and we sell it. As properties sell, they recuperate their investment. Investors compose about 60% of our business. With the depreciation of the Mexican peso, we have seen a boom in property investments. As a company, we see bigger opportunities when there are economic difficulties.

Are foreigners interested in this business?

CQ Most of our clients are Mexican, but we also have clients from many different nationalities. The difference between buying real estate and investing in a pre-foreclosure is that our clients do not have to be Mexican to invest since they are not initially buying a property, but getting assets with legal deeds. For foreigners, there are no restrictions for buying a legal deed, unlike buying real estate.

OG We are looking to expand our business to the US, because there are huge opportunities there. We are also pitching Mexican investors to the US, where there are good opportunities, too. Laws are not similar in Mexico and the US, so we are in the process of understanding the American legal framework to enter that market. Nevertheless, most of our investors are Mexican. We sell in all kinds of cities in Mexico, but are focused in Mexico City and the surrounding states.