Ontario couple loses $280K in a Mexico condo scam — how to avoid the same real estate trap

Cindy Thompson and Glenn Brown of Curve Lake, ON, thought they had found the real estate deal of a lifetime — a condo-flip transaction on a property in the tourist hotspot Playa del Carmen, Mexico. But after sending $280,000 to a real estate investment company to launch the deal, the couple never saw the money again.

According to CBC News, Thompson began eyeing investment properties in Mexico in 2024 and came across the site for XMEX Investments, a real estate investment company owned by Harry Robinson, a self-touted licensed expert.

Thompson noticed some details that piqued her interest: a number of properties listed on the site had been repossessed by banks and were priced 30% below market value, and the business was registered in the state of Florida — leading her to believe it had some credibility.

“So when I started to look at the individual properties, I thought, hey, this sounds like a really good opportunity, and I wonder who this guy is,” she told CBC.

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After multiple conversations with Robinson, Thompson flew to Playa del Carmen with her sister in October, 2024, to discuss opportunities. At that time, they were introduced to Robinson’s partner, Jacqueline Herrera Herrera, an allegedly well-known lawyer and realtor in the area.

CBC News confirmed that Herrera and Robinson were co-owners of another company called Xen Investments, registered in Mexico.

Over the course of their meeting, Herrera proposed Thompson purchase a one-bedroom condo for sale in a Playa del Carmen complex called Taak Maya. Thompson agreed, and while she saw the building, she never had access to the unit, as Robinson stated he did not have the key.

Despite not seeing the unit herself, Thompson sent two payment instalments in November and December of 2024, totalling C$170,000 to an HSBC bank account in Mexico affiliated with Xen Investments, CBC reported. She also signed a purchase agreement signed by Robinson.

After jumping through all the necessary hoops, Thompson never saw the inside of her unit.

A string of deceit

Thompson waited for keys to her new unit from late 2024 to early last year, and chose to return to Playa del Carmen to take possession. But Robinson and Herrera said they could not give her the keys yet, as they were still waiting on final pieces to come together.

Springboarding off the delay, Robinson chose to pitch a different deal to Thompson, alleging that Herrera had found an even better place for their C$170,000 investment: a large seven-condo purchase in the same building.

According to a WhatsApp voice message, Thompson was told the couple could purchase the seven units for US$100,000 (~C$141,000) each and then flip them for US$250,000 (~C$351,837.50) — a profit margin of 100%.

To fund the deal, Thompson’s partner, Brown, invested C$110,000 of his retirement savings to an HSBC account owned by Xen Investments and entered into a “share purchase agreement” with the company.

But the couple hit a supposed snag. Robinson passed along a message from Herrera that one of the investors in the condo-flipping project had died and that more funds were needed for the deal to go ahead.

However, nothing came of the deal to date — the couple has not seen a dime of their investment money. In a WhatsApp message to Thompson, Robinson alleged that his partner was in complete control of the couple’s funds and she took the funds out herself. CBC News could not reach her for comment.

“I’m just overwhelmed by it all,” Thompson told CBC.

“We’ll have to work until we die,” added Brown.

Where the case stands now

The couple hired a local lawyer that filed a criminal complaint. However, the case seemed to be in limbo until CBC News brought the issue up with Mexican President Claudia Sheinbaum during a morning press conference in June.

“We’ll look at this particular case that’s [been] raised, but we can say that there is legal certainty, and when there is a problem, for sure, we deal with it,” Sheinbaum told the outlet.

On the heels of that meeting, Quintana Roo Governor Mara Lezama’s administration moved forward with the case. The investigation is currently led by Rogelio Estrada Heleria, who is a state deputy prosecutor for the central district.

CBC News reached out to Robinson for an interview, but he turned down the request.

In addition to the claim against Robinson and Herrera from Thompson and Brown, Robinson also has a criminal complaint against Herrera, as he claimed he was “duped” as well.

Read more: 3 essential money moves to make once you’ve saved $50,000

Common real estate frauds facing Canadian buyers in Mexico

Thompson and Brown’s experience with real estate fraud in Mexico isn’t unique. According to estimates from the Mexican Association of Real Estate Professionals, the nation’s real estate sector loses approximately 600 million pesos (~$48 million CDN) annually to scams.

While each fraudster may have their own playbook, there are some common scams that Canadians seeking to invest should be cognizant of.

One of the most common is a duplicate property sale, when the same property is sold to multiple buyers. This occurs when a bad actor advertises a property they do not legally own — or attempts to sell a property whose ownership is disputed — and the buyers only find out they have been duped after their money is gone.

Other ways scams can occur with property transfers are through fraudulent documents being presented. Fake purchase agreements or even forged signatures can give the illusion of credibility, and leverage that illusion for large cash deposits upfront. Foreign buyers not familiar with Spanish can also be particularly susceptible to this kind of ploy when documents are presented in Spanish only — and when scammers apply pressure to sign.

Alternatives to real estate ownership

Real estate can be an alluring alternative investment to stocks and bonds, especially during periods of market turbulence. But holding property comes with its own share of risk, not including the possibility of getting caught in a fraudulent real estate scheme. For investors that feel unsure about buying a property themselves but still want to invest in real estate, there are a number of options to choose from.

Real Estate Investment Trusts (REITs)

REITs are publicly traded companies that own, operate and/or finance real estate. They fund these operations by pooling funds from investors to build a portfolio of real estate investments. By investing in a REIT, Canadians can purchase a share of a real estate portfolio that suits their risk tolerance and a property sector of their choice. Those who want a broad-based approach can also purchase REIT exchange-traded funds (ETFs) that track a real estate index by investing in multiple REITs. Some of the largest REITs in Canada include:

• Choice Properties REIT (TSX: CHP.UN) – a Loblaw-property focused REIT with a market cap of C$11.6 billion

• RioCan REIT (TSX: REI.UN) – RioCan focuses on major retail and mixed-use urban locations and has a C$6.6 billion market cap

• Canadian Apartment Properties REIT (TSX: CAR.UN) – CAP REIT focuses on multi-family housing across Canada, and the company has a market cap of C$5.3 billion

Real estate limited partnerships (RELPs)

Canadians wanting a real estate investment that is off the public market can find a viable approach through RELPs. RELPs are private groups of real estate investors that pool funds to invest in larger projects such as apartment buildings or shopping centres to generate rental income. RELPs are typically run by a property manager or real estate development firm with extensive experience.

Real estate crowdfunding

Rather than buy a property on their own, Canadians can crowdfund a real estate purchase with similarly minded investors. Real estate crowdfunding platforms act as intermediaries between investors and property investment opportunities such as apartment complex purchases or retail centre developments. Generally, individual investors are limited to investing C$2,500 per offering, allowing Canadians from multiple walks of life to find a property deal that suits their budgets. That said, these platforms may not be available to all investors in any province. Some of the most common real estate crowdfunding platforms include:

• Willow

• Fundscraper

• BuyProperly

• Addy Invest

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Buying Mexican real estate means doing proper due diligence

Sure, Canadians have a veritable slew of options that sidestep the liabilities of holding physical property. But for some investors that want a piece of property in tourist hotspot locations like Mexico, alternative investments might not cut it.

Before making any real estate deal in a foreign country, including Mexico, remember to take your time in performing due diligence. Hire a reputable third-party real estate lawyer that is separate from the seller, inspect the property thoroughly and chat with a Canadian tax expert regarding reporting requirements and tax consequences.

Jason Waller, CEO of Christie’s International Real Estate Mexico Luxury Properties, hails from Winnipeg, MB, and he’s been working in Mexico for the last two decades. His advice? Work with someone you can trust: an established real estate brand.

“You need someone on the ground that you can trust, that can hold your hand and help you through it,” Waller told CBC News in an interview.

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This article originally appeared on Money.ca under the title: Ontario couple loses $280K in a Mexico condo scam — how to avoid the same real estate trap

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.