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Poco a poco, my Gosh it's only been a week?!

This is exhusting, this project I took on - but I'm going to keep moving forward. In my last post I mentioned having to go back to Mexico..again..unexpected to pay the 2 annual payments plus the unexpected "Acceptence fee" from the bank (US $600) for a total of $1740. So I returned to the US on Sunday May 28th, then by Friday June 2cd I was back in the car headed to Baja. The last delimima was I needed to bring more money but it seemed cash wasn't an option nor a US check. Logically I decided if I am in Mexico with Peso's I can find a way to pay a Mexican bank. So I hit the casa de cambio, and had to get through a screening because lately I brought too much money into Mexico and that triggers *something* in the casa de cambios, so after proving my source of funds (is not drug money) they gave me peso's and I was on my way in as always. Friday I was able to do a little shopping and socializing. Saturday I bought more more matieral...all the roofing, all the siding. The Windows rough openings were framed and I set in brick sills then boarded up the holes. I had some sheathing to complete on an upper side outside wall. Also I framed in 2 small bedrooms. I wanted these walls in place to carry some of the roofing load though from an engineering perspective I shouldn't need them. Anyway, I also wrapped part of the house nn Tyvek. Even got a shower sunday night and was ready for the banking and bueracracy Monday morning. I found out from the Notaria I could print a reference number, a couple papers she emailed, and take cash to ScociaBank. Wow this is too easy. They accept cash, I have the papers and thankfully I got my pesos on Friday to make the payment.. all set. Of course when I arrived at Scotiabank they told me I had to pay in US Dollars. Ironic. The reason is the Notaria assumed I would have US Dollars and requested the total/paperwork in US Dollars. So I went to a local casa de cambio and paid again to convert my pesos back into dollars. This money sure cost me a lot of money! Viva Mexico. ..then back to the bank and making the payment was rather easy from there. I took the bank reciept to get copies then to the notaria so she could notify the contact at (the same bank where I paid) that the payment is made. She of course has still not confirmed with me that she actually did it, nor has she replied to my emails asking. Also seems to be normal. All this said, in theory.. I'm done. Supposably the bank processes everything and in 30 days I'll have my fideicomiso papers. Remember, I paid to apply, I paid for them to accept, the notary vetted the property legalities, got the sellers papers in orders so she could sell, I can't imagine what comes next. Certainly I'll not feel like it's mine until I have those papers but I did see the registration in the Notarias offical books. Of course that is not the bank carrying the deed. I feel like there is still both time and probability for more problems. But what i have learned is poco a poco and everything manana. So - I am offically US $5600 into the legal paperwork. If this were the US obviously that would not be a lot of money for this type of legal work but for me thats a lot of cash all things considered (the many thousands for the property and the thousands for Materials and hours and days of manual labor and stress). I left Mexico (again Tuersday June 6th) and will not be returning for a couple weeks. The next blog / updates will be on how the construction is progressing and I'll put some updates on the next surprise, signature or fee that pops up to finish the fideicomiso. Even though I am basically now broke, I have a lot of material so there is a lot I can do buying minimally more lumber. The guy that did my floor is coming to seeme there in a couple weeks. I think I want him to do my plumbing. I need a quote and it's gotta be cheap. Oh the 4 vinyl double paned windows I ordered arrived so I am excited to bring those down. Of course I'll be stopping at aduana to pay that 16% duty tax. Also I got the paint. Its not what really what I wanted but its basically a burnt red/orange - if you have seen a BJ's brewery here in the US - its that color. I'm just going to go for it. There is a door for sale for $400 in Rosarito. I want it, so hope to find some money for that. I'm super duper tired from all this but seeing light at the end of the tunnel. I just need those fideicomiso papers in my hands before I can feel secure. Oh, and one guy barrowed 1000 pesos from me then another guy barrowed 500 pesos from me. It will be *fun* to see if I ever see that money again. Wish me luck.

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Update, end of May Goal - FIDEICOMISO

In my last post I stated a few goals for my construction project and anticipated status of the FIDEICOMISO.

Trying to remind myself of my own words about needing to have a sense of humor and grit to get through the process.

After several emails to the notary that went ignored telling them I am in the area and would like to pay/sign and finish the process I finally received a reply back, after hours on a Friday evening the weekend I was leaving telling me I need to pay the last bit to the notary for the process to move forward. So in frustration I arrived the next morning as they are open a couple hours on Saturday.  I was able to sign my part of the supposed final paperwork. I tried to pay but they would only take cash and I did not have $2400 US in my pocket so I paid $300. Also I mentioned before my friend was a surrogate signer for the seller and she agreed to come in Monday to sign for the seller and I agreed to come back to Mexico to pay the final $2100 in cash.  On a closing handshake with the Notaria, I learned they needed a copy of the electric bill from the seller. We already gave one but now that one is out of date. So just when I thought the seller was free from the process, I had to ask them for yet another document. Note I already paid them so I wonder what would have happened if they simply said NO.  Everything stops, they have my money and I have nothing? Hence my warning previous blog not to pay the seller until the process is 100% complete.

I digress..

So, the great news is by the end of the following week my friend did in fact sign for the seller, the seller provided an updated electric bill for proof of residency and I paid the last $2100 to the notary.

This was to be *almost* the last step. I knew all this would go back to Scotiabank and within 30 days they would charge my credit card 2 years of service fees (About $580 a year) and then I would get an email from the notary telling me to pick up my copies of the completed FIDEICOMISO.  Of course this is Mexico.. so it didn't happen that way.

Today (5/31/2017).. I got a new email saying because the FIDEICOMISO is not yet in place they can not charge my credit card. Instead I have to present a check to Scotiabank. As you would learn to expect.. I was not told the amount of the check, who to make it out to, or where to present it.  So after asking I learned the amount would be 2 years of fees (as expected) but also this new unexpected fee of $600 US. This is the "Acceptance" fee. So I paid a cool Grand up front to the bank to apply, now I am paying $600 more for them to accept?  WTF?

Also, the Notary said the bank won't take cash (dollars nor pesos) nor does she believe they will take a US check.  So how do I pay? Viva Mexico. The one time I *want* to pay, and they make it impossible.

Fortunately I have friends to call and they are getting this conversation out of email and onto the phone for clarification. When I have some answers I'll post how that went.  Bottom-line, I'm looking at $1700 in some sort of check that I get to drive back to Mexico. Fortunately the tacos almost make the drive worth it.

CONSTRUCTION

Well I met parts of my end-of-may goal. I have 4 load bearing walls glued and nailed to my floor. The building is externally sheathed with 3/8 plywood. The pitched roof is sheath in CDX rejected (due to debonding) 5/8 ply and the flat roof (later to have a 2cd floor) is sheathed in 7/8th OSB. The building is very ridged. I feel good about what's been completed. I installed hurricane straps to all the truss and wall contact points on the pitched roof. On the flat roof I used Truss clips, basically L brackets. They seemed to be the best option as the flat roof is all iJoists sitting on top of the perimeter walls. I also used straps where you might normally use joist hangers to keep the iJoists from pulling away. Hard to explain this part, just trust it was needed. I blocked in all the studs in my last visit then tarped the roof since I had no more time.  Also cut out the front door.  None of the windows are cut out as I want the building as secure as it could be for now.  My friend found a cool gothic rustic front door in solid wood, cost me 1000 pesos, $60.

NEW GOALS

By July 4th I'd like the roof 100% complete, shingles on the pitched roof, Facia board and then rolled roofing on the flat roof - drip edge all around. Also, the Front door installed, 4 Windows installed with bars (there will be more but my goal is 4) and the siding installed.  If any plumbing gets done, interiors walls framed or anything painted that will be a miracle at this point. I hope to have the outside of the building trimmed out as well. The front door is about 3 feet off the ground so I need steps. for now it'll be a big plastic box.

I have to admit I'm starting to lose confidence, where's that grit I keep talking about?  Did I mention I can not get an internet line?  The area is saturated. And what I mean by saturated is 1 neighbor has it, none of the others do. Rolling eyes. At least there is 4g on my phone.. sort of.

#tryingtokeppmychinup

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Where am I in the process buying and building process?

For the moment, I have a piece dirt with a chain link fence and a pad lock in Wine country of Baja. It's about 375 sq meters or 4000 sq ft.  It's in an older rural community close to the main road up the hill from the ocean about 15 minutes. I have fulltime and parttime neighbors. Most don't speak English, but a few do and I don't. This area is mostly Mexican but also a lot of duel citizenship Mexicans and a few Americans.  Since padlocking the property, I built a secure shed for tools and to sleep in (glamping). Within a week a neighbor helped me connect with the commission for electricity. I paid a friend to install a power pole and electrical box (they come preassembled for $100). The commission connected the box to the power line giving me electricity. I ran a really long extension cord to my shed to charge tools. Also bought a car battery and solar panel from Harbor freight ($140) for DC lights and an inverter to charge tools prior to the electrical.  At this moment I also have completed a fosa (septic), 3 stage concrete and block. On top I made a platform and have a 290 gallon (1100 lt) Rotoplas for water.  When digging the fosa, they hit a vein of water at 8 feet. So later I will tap in and make a pozo (a well). Also at this moment I have a 30 by 30 stem wall foundation with iJoists and 7/8" plywood foundation. So I am about ready to connect my ceptic and drains.  The beauty of stemwall and iJoists is I can modify my house layout as I build it depending on time and money. My goal is to have 4 sheathed walls fully enclosed and my peaked truss roof done by end of May and a fully functioning bathroom with shower and the house fully wired electrically, and windows with bars by end of June 2017. Drywall, floor, kitchen, etc will all come later in baby steps as my budget will be gone at that point.  

As of this moment, I am in the last step of the fideicomiso process. Scotiabank has my application (paid about $1000 us to them). It's been about a month of waiting and I assume a have a couple weeks more. I owe my Notaria about $2500 us for the paperwork which is mostly complete. They have a $1000 retainer from me.  I already paid in full the seller (don't ever do this! There is no escrow or real title insurance. The money exchange should happen with the notary present at the END of the process). The property title and seller paperwork is reviewed, researched and clear. The seller didn't have their tax id, or even Mexican ID only a birth certificate so we spent several weeks getting that in order. The Notary discovers all this, this is why you need to work with the Notaria for this process and 1 of many examples of why you should not give the seller any more money as a deposit than you are willing to lose.  

I'll talk about the seller and I went through to get this far in another post. The seller is for the most part out of the picture now.  Through the notary the seller gave supposedly (questionable) irrevocable signing authority to my friend (someone I would trust my life with).  So, in theory, once Scotiabank is ready my friend with signing authority and I will go back to the Notaria and my friend will sign as the seller, I will sign as the trustee of the property and the bank with hold the title for up-to 50 years. I will pay the bank about $580 a year to hold my title and they will charge me up front 2 years.

This is the step that needs to complete before I can really say the property is "mine".

In the US, most of us are financing our cars and homes. The deed/title is held by the bank until we pay the assets off. each year we pay taxes or on a car registration. The fideicomiso isn't much different. The bank holds the title until I decide to sell. The difference is I don't have a mortgage or monthly payment. Just an annual payment to the bank.  So the trust factor in this process comes down to

1. Do you trust the bank? Scotiabank is about as good as it gets in Mexico, so for me yes.  

2. Do you trust that the fidiecomiso as an entity will continue to be recognized in Mexico as it has the last 30+ years?  For me yes because the bank holds the title. Them holding the title is not a government thing. They hold it. It's theirs. So if you trust that bank (#1 above) then #2 is a given.

So this is my logic.. or rational anyway. There is still some risk. The bank could avoid me forever, my friend could die, something could happen to me, my 2 year prepayment of the annual fee to the bank to be declined causing delays, the notary could die. Not to be dramatic here but these are real risks but long shots so for now I feel ok.

All this just to have access to a good taco.

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So you want to buy in Mexico?

Ok so I’ve wanted to buy property in Baja Mexico a long time but because it is 30 miles from the ocean or border as an American I can not own directly (there is rumor that might change eventually but don’t wait for it because could be decades or never).

The Fideicomiso or Mexican Bank trust is the closest option to residential ownership. There are other options like putting it in the name of your Mexican friend or relative (who by the way then owns it.. not you). Another option is a land lease where you buy the structure and basically lease the land it sits on from an individual or family but in Baja that’s usually part of a larger community (i.e. Rancho Packard or Punta Banda near La Bufadora ). The Mexican owner is happy to collect a couple hundred bucks a month from dozens of Gringo’s and there are great examples of this model working successfully all over Mexico for decades.

The 99 year lease, 25 year least.. these are BS.  You can sign papers and agreements all day long but Mexican courts only recognize 9 or 10 years thus after you build your $500,000 house on someone else’s property believing you have a 99 year lease, they can pad-lock it at year 9 and there isn’t anything you can do about it.  Don’t believe me? Fact check with a real Mexican notary. Not the guy selling you property who claims to be a realtor and a lawyer.

In Mexico, the highest state appointed authority is a Notaria (way more significant than a US based Notary or lawyer). You can fact check me through them. There are only a few in each large community as they are state appointed. Working for them are Abogados, lawyers, and they know more than your personally hired Mexican lawyer or attorney who is ultimately submissive to them in the process

When you visit the Notaria (and you should), my advice is bring your most business savvy and articulate, Spanish fluent, Mexican friend with you to consult with the notaria before you do anything. Despite both civilian American and civilian Mexican people's general distrust of the government and legal process’s, you can feel pretty confident about the Notaria doing things properly. Just remember they don’t have complete control (nor does your realtor if you use one or your Abogado) over processing of the fideicomiso but they certainly can take you through all the steps properly. Patience, and a sense of humor is key.

It takes grit to get through all the process’s in Mexico.

My fideicomiso is *almost done* and I’ll talk more about my experience in a few posts.

For now, I’ll share this link.  I do not know anything about the group that wrote this paper or have any affiliation.  It’s just when I researched all this I found this document and thus far it’s proven to be mostly spot on. It covers some topics not relevant for me, but the parts related to buying a reasonable size piece of dirt to build a residential house near the coast is pretty spot on to my current experience

https://www.mdtlaw.com/images/uploads/The_Mexican_Trust_Fideicomiso1.pdf