Real Estate Without Borders: Investing in Tulum – Insights from a Developer

Episode Released: May 2, 2025

Introduction

In this episode of Real Estate Without Borders, host Dave engages in an enlightening conversation with Sam Gordon, a seasoned developer deeply entrenched in Tulum's burgeoning real estate landscape. Sam shares his extensive experience, insights into the Tulum market, investment strategies, and future projects, providing invaluable guidance for investors eyeing international opportunities.

Sam Gordon's Background

Sam Gordon, the developer and founder of Khan Tulum, has been a pivotal figure in Tulum's real estate development for nearly a decade. With a portfolio that includes the renowned 42-unit wellness condo hotel, Sam has witnessed the city's explosive growth from a modest 6,000 to an anticipated 300,000 residents by 2030.

"I've been in Tulum around nine years. Feels like it's been nine years for a long time." [00:40]

Sam emphasizes his commitment to community development and sustainability, positioning himself as an "OG" who has remained steadfast amidst Tulum's rapid evolution.

Investing in Tulum: Risks and Due Diligence

A significant portion of the discussion centers on the inherent risks associated with investing in Tulum, particularly in pre-sale properties. Sam addresses concerns raised by a Bloomberg video highlighting unfinished projects and declining ROI in short-term rentals.

"There is great opportunity here if it's managed correctly, period." [17:58]

Key Takeaways for Investors:

1. Ownership Verification: Ensure the developer owns the land.
2. Funding Assurance: Confirm the availability of full or backup funding to complete the project.
3. Legal Representation: Engage a competent lawyer to perform due diligence.
4. Community Feedback: Leverage the local community to assess developer reputation.

"If I'm an investor, I'd be asking those questions. Do you own the land? Do you have funding?" [06:05]

Sam underscores the importance of exhaustive personal and legal due diligence to mitigate investment risks, highlighting that unfortunate financial losses are not unique to Tulum but a global reality.

ROI and Market Trends

The conversation delves into the fluctuating Return on Investment (ROI) in Tulum's real estate market. Sam explains that the surge in construction led to market saturation, impacting rental yields. However, he remains optimistic about a market correction.

"We're going to go through this new stage again when there's not enough on the market." [09:07]

Current Market Dynamics:

• Overbuilding: Excessive development has led to a temporary dip in ROI.
• Expectation Management: Investors should align expectations with market realities.
• Future Prospects: Anticipation of infrastructure improvements and increased tourist influx may rejuvenate ROI.

Sam advises patience, suggesting that the market is cyclical and poised for a rebound as infrastructure projects like the airport and train network enhance Tulum's appeal.

"I believe we're going to see those ROIs again." [09:07]

Future Outlook for Tulum

Looking ahead, both Dave and Sam express bullish sentiments about Tulum's trajectory over the next three to five years. They foresee Tulum evolving into a unique hybrid destination, balancing its wellness-centric identity with increasing infrastructure and international appeal.

"Tulum's at crossroads. There's no getting away from that. It's going to evolve into something uniquely its own." [10:20]

Projected Developments:

• Hybrid Identity: Combining Miami-style growth with Tulum's inherent charm.
• Infrastructure Enhancements: Completion of major projects will attract a more diverse population.
• Community-Centric Growth: Emphasis on sustainable and wellness-focused developments to preserve Tulum's unique atmosphere.

Who is Buying in Tulum

Sam outlines the diverse demographic currently investing in Tulum, highlighting a shift from digital nomads and short-term flippers to families and wellness entrepreneurs. The primary markets include:

• Americans: Dominant due to volume and investment opportunities.
• Canadians: Attracted by proximity and ease of travel.
• Europeans and Asians: Emerging interest, particularly from India, Dubai, and Japan.

"Americans... are always still going to be our number one market. And then Canadians second to that because of proximity and ease of travel." [19:38]

Sam notes an increasing trend of individuals seeking full-time residency, driven by lifestyle preferences and Tulum's expanding infrastructure.

Property Types and Management

The success of real estate investments in Tulum heavily relies on effective property management. Sam differentiates between property types, emphasizing that:

• Villas: High-end villas (around the million-dollar mark) continue to perform robustly due to limited availability and affluent clientele.

  "Villas seem to do very well... there's not enough of them on the market." [22:44]

• Studios: Overbuilt studio segments face challenges but can break even with proficient management.

  "Studios struggle... they don't necessarily struggle here because of the management." [23:00]

Management Best Practices:

• Choose Reputable Managers: Vet property managers thoroughly, assessing their track records and capabilities.
• Invest in Amenities and Services: Enhance property appeal through quality furnishings, professional photography, and effective marketing.
• Community Engagement: Implement events and communal activities to boost occupancy rates.

"It's always management and it's the most challenging thing because of the new licensing laws." [22:46]

Sam underscores that the property's performance is directly tied to how well it is managed, drawing parallels to the hospitality industry's operational standards.

Safety in Tulum

Addressing safety concerns prevalent among potential investors and residents, Sam provides a balanced perspective:

"I walk around them with my four-year-old without even thinking about it." [27:12]

Safety Insights:

• Low Crime Rates: Personal experiences of Sam and others indicate Tulum is safer than major cities like London, Toronto, or New York.
• Isolated Incidents: Rare and typically not involving tourists directly.
• Comparative Context: Crime statistics reveal higher incidents in larger cities, often overlooked in safety assessments.

Sam advocates for a rational evaluation of Tulum's safety, juxtaposing it against the violence commonly seen in more populous urban centers.

Tulum for Families

The episode highlights Tulum's growing appeal as a family-friendly destination. Sam shares his personal experience raising his daughter in Tulum, emphasizing the blend of natural environment and community-oriented living.

"It's one of the best places in the world. I'm a big advocate for it because I'm doing it and this is where I'm choosing to bring my children up." [32:30]

Family-Friendly Aspects:

• Educational Opportunities: Emerging schools, including alternative and nature-based curriculums.
• Healthcare Access: Adequate facilities catering to residents' needs.
• Lifestyle Benefits: Outdoor activities, safe neighborhoods, and community support enhance family living.

Sam envisions further development of family-centric amenities like kids' play zones, contributing to Tulum's livability for growing families.

Upcoming Projects

Sam reveals his future endeavors aimed at expanding Tulum's real estate portfolio while maintaining sustainability and community focus.

"I've just launched into a new project called Iktan... 98 Lots, great amenities, most beautiful cenote and I'll be designing and building villas in there." [35:51]

Highlighted Projects:

1. Iktan Project:

   • Location: South Tulum, near the beach.
   • Features: 98 lots, sustainable amenities, proximity to a cenote, and bespoke villa designs.
   • Website: Iktantaloom.com

2. Art and Architecture Integration:

   • Concept: Merging architecture with art through collaborations with notable artists to create unique experiential spaces.

Sam's projects emphasize sustainable development, community integration, and architectural excellence, setting new benchmarks for Tulum's real estate market.

Conclusion

The episode concludes with mutual appreciation between Dave and Sam, underscoring the significance of quality development and effective management in Tulum's real estate success. Sam's passion for sustainable living and community-driven projects, combined with his pragmatic approach to investment risks, offers a comprehensive roadmap for investors seeking to navigate Tulum's dynamic market.

"If you're thinking about relocating here... you'll find your tribe. That's a really important thing." [34:32]

For more insights and updates on Sam Gordon's projects, listeners are encouraged to connect via his social media platforms: @sustainableSAM7 and Khan Tulum.

Notable Quotes:

• "It's all about connection. The co-working spaces. There's so many wellness hubs." [13:12]
• "The ROIs are there. Just know how to manage your property." [16:22]
• "Villas seem to do very well because of the type of clientele that are coming." [22:44]

Connect with Sam Gordon:

• Instagram: @sustainableSAM7
• Khan Tulum: KhanTulum.com
• Upcoming Project: Iktantaloom.com

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