This article is from the October 1997 The Mexico File newsletter.
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Greenbacks, Don’t Leave Home Without Them

by David Hammer

David Hammer is an attorney who has been in private practice in Weaverville, Trinity County, California, since 1974. One of his specialities is real estate and business law. He is building a six-unit hotel in Cozumel.

As I walked through the hotel lobby, the weight of the three hundred $100 bills sewn to the waist band of my Jockey shorts pulled my underpants down over my small rear. The money was hanging at my knees. As inconspicuous as a penguin waddling through the hotel lobby at high noon, I could easily have been mistaken for an amateur drug smuggler. When I approached the front desk, the clerk asked: "¿Que le parece un caja de seguridad?" I knew my cover was blown.

It had been a long trip. Leaving my office at 3:00 p.m. the day before for the five-hour drive to San Francisco, I drove my pickup loaded with a couch and love seat destined for my oldest son’s first apartment and I had $30,000 stitched into my underwear. Cruising along at 65 mph on highway 680, I had just passed the Navy’s mothballed fleet when the love seat went flying. I stopped, ran back and saw a guy standing on the median waving a cushion in the air. By the time I backed up the truck, he and his wife had the love seat off the freeway. He helped me put it back on the truck, and drove off with my thanks. As I spent the next 15 minutes retying the love seat, I kept thinking what I would do if a car stopped behind me. I felt vulnerable with all that money on me.

After dropping off the furniture, I caught my flight from San Francisco which left at 1:35 a.m. After a two-hour layover in Houston, I arrived in Cozumel at about noon. All this hassle simply to satisfy the seller’s demand that I pay greenbacks for my Mexican real estate deal. I had learned this is not unusual in buying property in Mexico. I could have wired the money, but I would have been stuck paying a commission twice: once to convert the funds to pesos and again back to dollars. Airfare was cheaper.

One broker told me that I could not take more than $10,000 into Mexico. My research proved him wrong: there is no restriction as to amount, but you must declare any amount over $10,000, which I did. Customs did not even ask me what the money was for. An additional form may be required, but I was not asked to complete it.

It had taken me six months to find a lot in Mexico that I wanted. For several years I have wanted to develop rental units for tourists, both to generate income and for a winter vacation home. As an attorney, I had helped a client buy a duplex in San Carlos. In December of ‘96 my son and I drove the tourist corridor between Cancún and Tulum, continuing south to Chetamal and inspecting property in every town and fishing village in between. On New Year’s Day we took the ferry from Playa del

Carmen to Cozumel. I liked what I saw. Beautiful beaches, crystal clear water, friendly people, and a healthy economy recalled the same small town atmosphere of my home town in California where you can walk the streets at night in safety.

It takes patience and tenacity to purchase property in Mexico. The seller of the first lot on which I made an offer asked $22,000. I offered $18,000 and the seller came back with a counter offer of $30,000. When I asked the broker "¿que pasa?" she said: "That is real estate in Mexico." Similar experiences repeated themselves over the next five months. Each time I made offers for the asking price, only to be told the seller now wanted more. Finally I made a tentative agreement on a parcel for a price I was willing to pay. Immediately flying down to Cozumel, with the money in my shorts, I had expected to meet the seller on Friday to close the deal. Not until I arrived on Thursday afternoon, did I learn that the seller wanted me to pay the sales and capital gains tax. On Friday morning I was told she had missed her plane to Cozumel and would arrive on Saturday at noon. I said: "Fine, I’m going diving Saturday."

At 8:30 am Saturday morning, I met the dive boat and went to Columbia reef. We dove at 100 feet amid coral pinnacles towering above us in arches and caves. Huge inquisitive groupers swam up to my mask. After a break on the surface, we dove Villa Blanca reef, loaded with small tropical fish. Returning to the dock at 1:15 p.m., I was scheduled to meet the seller at 2:00 p.m. After a quick shower and change of clothing, I arrived at the broker's office on time, and the seller was there...a very nice lady who spoke much better English than my Spanish. After a few small changes to the contract, we signed and I delivered the greenbacks.

On Sunday I celebrated with two morning dives and a night dive. After meeting several architects, on Monday I signed a contract for the development of six rental units and a pool on the property. The estimated completion date is the end of January, 1998.

Having worked hundreds of real estate transactions in California, I thought I knew my way. Although some of my knowledge has been helpful, the difference in laws and culture make doing business in Mexico a completely different experience...although, truth be told, all the people I have met have been very courteous and helpful.