Five Mistakes I Made Buying My First Cabo Property (And How to Avoid Them)

A Broker's Confession

I have coached thousands of real estate agents. I have closed deals in a dozen states. I wrote the book — literally — on building a real estate business. And when I bought my first property in Los Cabos, I made mistakes that would have embarrassed a first-year agent.

Here are the five biggest. I share them because every buyer I work with is at risk of making the same ones, and the only inoculation is hearing them from someone who already paid the tuition.

Key Takeaways

• The listing price in Cabo is a starting position, not a market value — the sale-to-list ratio averages 93%, and many properties sell 10–20% below ask.
• An independent bilingual attorney costs $1,500–$3,000 and can save you $20,000+ in problems you never see coming.
• HOA reserve fund health is more important than the monthly fee — underfunded reserves mean a special assessment is coming.
• Carrying costs in year one are 30–50% higher than you budget because of furniture, setup, and systems you did not know you needed.
• Buying for peak season while ignoring green season economics can turn a good investment into a mediocre one.

Mistake #1: I Trusted the Listing Price

In the US, listing prices are anchored to comparable sales data that both parties can access. Appraisals exist. Market data is transparent. A listing price is generally within 5% of where the deal closes.

In Los Cabos, the listing price is an aspiration. I did not know that. I offered 5% below ask because that is what I would have done in Park City. The seller accepted immediately, and I spent the next six months learning that comparable units in the same building had closed 15–18% below where I bought.

What I should have done: asked my agent (or Ronival, if I had known them then) to pull every closed sale in that development for the last 12 months. The average sale-to-list ratio in Los Cabos hovers around 93% — meaning the average buyer pays 7% below ask. But in a market with 2,300+ active listings, many properties trade 10–20% under ask. The listing price tells you what the seller wants, not what the property is worth.

Mistake #2: I Did Not Hire an Independent Attorney

This is the one that cost me the most. I assumed the notario — the government-appointed official who handles the closing — was acting in my interest. The notario is not your advocate. The notario is a public official ensuring the transaction meets legal requirements. They work for the process, not for you.

I should have hired an independent bilingual attorney — someone whose only job was to protect my interests. A good real estate attorney in Los Cabos charges $1,500–$3,000 flat for a standard residential transaction. Mine would have caught that the property's catastro value was artificially low (which saved the seller on transfer taxes but created a problem for me when I eventually sold), that the HOA bylaws restricted short-term rentals in a way the listing did not disclose, and that the fideicomiso terms included a bank fee structure that was not competitive.

Fifteen hundred dollars. That is what standing up an independent advocate costs. I paid multiples of that fixing the problems an attorney would have flagged before closing.

Mistake #3: I Did Not Audit the HOA Reserve Fund

I looked at the monthly HOA fee — $450 — and thought it was reasonable. What I did not do was ask for the reserve fund balance, the reserve study, or the minutes from the last three annual meetings.

Six months after closing, a special assessment hit: $8,000 per unit for exterior waterproofing that the reserve fund should have covered but could not because it was underfunded. The HOA had been keeping monthly dues low to attract buyers while deferring maintenance. Classic play — and I fell for it because I was too focused on the unit price to look at the building's financial health.

Now I tell every client: the HOA monthly fee is the least important number. The reserve fund balance, the reserve study, and the maintenance history are the numbers that matter. An underfunded reserve is a ticking special assessment.

Mistake #4: I Underestimated Year-One Carrying Costs by 40%

I budgeted for the obvious: HOA, predial tax, insurance, utilities, internet, and property management. What I did not budget for:

• Furnishing: $15,000–$35,000 for a rental-ready 2-bedroom. I spent $22,000.
• Linens, kitchenware, and guest supplies: $3,000–$5,000. Nobody tells you about the $200 of towels.
• Photography and listing setup: $1,500–$2,500 for professional photos, drone footage, and platform listings.
• Lock system and smart home: $1,000–$2,000 for keyless entry, security cameras, thermostat.
• Pest treatment and salt-air maintenance: $500–$1,000 for the initial treatment cycle.
• Bank account setup and RFC registration: 2–3 trips to the bank, 1–2 to SAT, and 8–12 hours of bureaucratic patience.

My actual year-one carrying costs were 40% higher than my spreadsheet. Not because I was wrong about the recurring costs — those were accurate. Because I did not account for the one-time setup expenses that turn a purchased condo into a functional rental property.

Now I give every client a First 90 Days checklist with real line-item costs. No surprises.

Mistake #5: I Bought for Peak Season and Ignored the Green Season Math

I visited in February. The weather was flawless. The restaurants were full. The rental calendars were booked solid. I ran my rental projections based on peak-season rates and peak-season occupancy.

Then May arrived. Bookings dropped. The rates I could charge fell 40–50%. And I realized that the property's full-year economics depended not on how it performed in January (when everything in Cabo performs well) but on how it performed in July, August, and September — when the green season tests every owner's patience and cash flow.

The lesson: always run your rental projections on 12-month data, not peak-season snapshots. A property that generates $8,000/month in February and $2,500/month in August has a very different annual return than one that generates $6,000/month year-round. The second property often outperforms because consistency beats peaks in the vacation rental business — consistent properties get better reviews, better repeat guests, and better management attention.

What I Do Differently Now

Every one of these mistakes was preventable. Not by being smarter — I knew the principles. But by having local representation that understood the market's quirks and could have flagged each issue before I closed.

That is exactly what I do for my clients now. I have already paid the tuition. Every discovery call I take, every property I evaluate, every offer I write is shaped by these five lessons. My clients get the benefit of my mistakes without paying for them.