Image by jess hickman via FlickrYou can buy an entry level ocean front condo near Tijuana and/or Rosarito for about $150,000 with as little as 3% down payment. You will pay higher interest rates down south, so it is preferable to cash out a US property than to get a mortgage in Mexico.
Non citizens cannot technically own Mexican property. This requirement is circumvented by holding the property in a trust, with a Mexican bank or other trusted entity as the owner, with yourself as the beneficiary. Obtaining your Mexican citizenship can take a minimum of 5 years, but may be worth it for serious investors.
You probably do not want to buy a single family home unless you plan on living there or having it occupied full time. This is because the high crime rate and lack of law enforcement in most areas. You could put up a big gate, heavy locks, and bars on the windows. But this is really not necessary. You can buy 3,000 or 5,000 square foot penthouses that are larger than many single family homes anyways. And the view from the 10th or 15th floor is incredible! You can see for 20 or 40 miles down the coast from such a height.
With all that said, it is unlikely that you will want to live permanently in any city along the Baja peninsula, with the exception of Cabo San Lucas. Most condo associations are almost empty (maybe 10% occupied) at any one time.
Starting and maintaining a successful a business is fraught with problems, as corruption, reactionary and emotional government officials, crime lords, petty police, and any number of uneducated fools will get in your way.
My brother owns and operates Picante Blue Water Sports Fishing.
This is one of the most successful fishing boat sales and charter businesses in Baja. He is full of stories about the problems I listed above. It takes a special type of person to deal with these added problems of running a business.
Until the government stamps out the rampant corruption, makes education a top priority, enforces private property laws without prejudice, encourages foreign investment more fully, steps back from the socialist populist lawmaking, becomes concerned with the safety of its citizens and visitors, and generally gets its economic act together, Mexico will be relegated to be the location for second homes, vacation homes, or any other type of home where you don't want to live full time.
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