Valley company investing in Mexico

The real estate market in Mexico is booming — and it’s about to explode. That’s the message three Valley entrepreneurs are sending to potential investors in Arizona, across the nation and around the world.

“Buying property in Mexico is a wonderful opportunity,” said Tim Kelley, chief operating officer of the IMI Group, a Phoenix-based investment and mortgage company at 2398 E. Camelback Road with offices in Austin, Texas, New York and business links in Germany and throughout Mexico.

“And it’s going to get even better,” Kelley added.

He cited the growing number of baby boomers in the United States who have a combined estimated spending power of more than $2 trillion dollars as the future group of investors.

Recent changes in Mexico’s property-ownership laws make it easier — and more secure — for U.S. investors.

Last year, three major money lenders, or financial groups, were offering loans for properties in Mexico. Today, the number has increased to nine, according to IMI Group.

The firm estimates U.S. citizens own $30 billion in residential real estate in Mexico, and another $5 billion is expected to be developed during the next two years.

Roy Nelson, associate professor of international studies at Thunderbird School of Global Management in Glendale, said Mexico’s economy is growing, helping fuel rapid development of real estate.

However, he believes the overall growth is not as rapid as most international — and Mexican investors — would like it.

“There are a lot of people, including Mexico’s President Felipe Calderón, who would like to see the country’s economy growing a lot faster, but there are political forces that are holding it back somewhat,” said Nelson, who also teaches at several Mexican universities.

Nelson echoes IMI Group’s opinion about real estate expansion, particularly in areas like Monterrey, Mexico, a magnet for foreign companies and growing real estate.

“Monterrey’s real estate prices are skyrocketing,” Nelson said. “A lot of people from the United States and Canada are buying property in Monterrey as well as other areas that attract tourists.”

The IMI Group — International Mortgage & Investment Company — was created two years ago by Kelley, a finance, real estate and construction expert who lived in Mexico for 10 years; Kevin Hardin, chief executive officer and veteran mortgage lender; and Tracy Smith, chief marketing officer and real estate entrepreneur who has been tracing Mexico’s economic expansion since he was a child.

“My family owned a home in Rocky Point, and we regularly vacationed there,” Smith said. Smith, a Valley native, said when IMI Group first started he tried to contact as many potential investors as possible. He and Hardin teamed up, then asked Kelley, who had sold real estate not only in Mexico but also in Chile, Portugal, Spain, Venezuela, Brazil, Colombia and Israel, to join them as well. The IMI Group was born.

The principals of IMI Group so far have sold more than $10 billion in mortgage loans and coordinated more than $200 million in construction projects, mostly commercial and residential, including condos. The company deals primarily with U.S. and Canadian investors buying second homes in Mexico and developers in Mexico.

The solid security of putting dollars in Mexican property was not always the case, however, Kelley said, but times are changing.

“In most of Mexico, Americans — or any other foreigner — can now own land outright with what’s called fee simple title, the same kind we have in the United States,” Kelley explained. He said there is a restricted zone — 31 miles from the ocean and 62 miles from the borders — where foreigners can’t hold fee simple titles.

Titles must be held in a trust that is perpetually renewable in 50-year terms. Kelley said this is virtually identical to a Deed of Trust, similar to what is available in Arizona.

There are also areas in Mexico that are set aside by the Mexican government for homesteaders in communal properties (Ejidos) which, in the past, have created legal disputes between Mexicans and foreign investors. “The fact remains that Mexico and the United States have fundamentally distinct legal systems, different politics, different languages and different customs,” Kelley said.