How to Buy a Beachfront Hotel in Mexico: The 7-Step Foreign Buyer Guide.

Step 1.

Decide: asset or entity.

The first decision in any Mexican hospitality acquisition is whether you are buying the asset (the building, land, and operating contracts) or the entity (the Mexican corporation that owns the asset).

Buying the entity is almost always better for the foreign buyer. IVA tax credits, accumulated NOL carryforwards, existing operating licenses, and brand contracts transfer with the entity automatically. In an asset deal, you reset all of those.

One important caveat: you inherit the entity liabilities too. So Step 1.5 is a forensic review of the holding company books, tax filings, and any pending litigation.

Step 2.

Set up the fideicomiso (or skip it).

Mexican law restricts foreign ownership of property within 50km of the coast or 100km of the border. To buy beachfront, you have two paths:

• Fideicomiso — a Mexican bank trust that holds title with you as the beneficiary. 50-year renewable. Setup costs $5,000-8,000 USD plus ~1% annually. Most common path for individual buyers.
• Mexican corporation — incorporate a Mexican LLC (or buy the existing holding company) that you control. Better for buyers who plan to invest in multiple properties.

If you are buying the entity in Step 1, you do not need a separate fideicomiso — the Mexican corporation already owns the property.

Step 3.

Verify title, zoning, and federal zone.

Three documents you absolutely must see before any LOI:

1. Escritura (deed) — confirms ownership chain. Pull the Folio Real from the Public Registry to verify no liens or encumbrances.
2. Uso de suelo — confirms the property is zoned for hospitality use. Do not trust the seller word; pull the document from the municipal planning office.
3. ZOFEMAT concession — if beachfront, the Federal Maritime Zone is federal property leased to the property owner via an annual concession. Verify it is current and transferable.

If the property sits on ejido land (communal land), stop. Ejido property requires a privatization process that takes 6-12 months and is not always successful.

Step 4.

Underwrite for Mexican structure, not US assumptions.

The most expensive mistakes foreign buyers make come from underwriting with US templates. Mexican hospitality math is different in five specific ways:

• IVA tax credits can be worth 8-15% of purchase price if structured correctly.
• Property tax (predial) is dramatically lower than US equivalent — often under 0.3% of assessed value annually.
• Labor costs include legally mandated 13.3% aguinaldo and severance obligations that scale with tenure.
• Peso volatility creates revenue/cost mismatches. ADR is typically denominated in USD; costs in MXN.
• Hurricane risk requires CapEx reserves of 3-5% annually vs the typical 2-3% for US Sunbelt assets.

Step 5.

Build a real comp set.

Mexican hospitality has no STR Global data, no public REIT comps to triangulate against, and no broker-published cap rate index. Comp data has to be sourced manually from local relationships.

For each prospective acquisition, build a comp set of at least 8 properties within 2km. Pull their ADR from public OTA listings over 12 months. Cross-check with what local operators are willing to tell you informally.

The Saltvale Distress Index publishes submarket-level comp data quarterly. Subscribe if you want a head start.

Step 6.

Use a Mexican notario, not just a Mexican attorney.

In Mexico, the notario público is a quasi-judicial officer who notarizes property transactions and is personally liable for their validity. You need one. Pick a notario your attorney has worked with before.

Closing costs to budget at the notario stage:

• Acquisition tax (ISAI): 2-4% of purchase price
• Notario fees: 0.5-1.5%
• Public Registry filing: ~0.5%
• Title insurance (optional but recommended): 0.3-0.7%

Total closing cost budget: 5-8% of purchase price on top of the headline number.

Step 7.

Plan the post-close operating handoff.

This is where 60% of foreign buyers blow up. The operator that ran the property for the previous owner walks at close. The brand contract may not transfer. The PMS/POS systems may have licensing tied to the seller. The booking velocity craters during the transition.

Plan for it. Either negotiate a 30-90 day transition services agreement with the seller, or have a replacement operating team contracted and onboarded BEFORE the close date.