Jun
17

Process of Buying

For many years our family rented a house in Vallarta for vacations.
In 2001 the house we rented was sold, which caused us to explore the idea of constructing our own at Punta del Burro on Banderas Bay – North of Vallarta.
We have always constructed our own houses in the US and we did not see any reason why we could not do the same in Mexico. Unfortunately, the conventional wisdom among many Americans about doing business
in Mexico is negative. We heard all the stories. You can’t get good title to real estate in Mexico; the contractors build shoddy houses with poor quality materials; you cannot control costs;
Progress will be very slow; it will never be finished on time; the infrastructure is unreliable or non-existent; The Mexicans
will over-charge you…etc. Notwithstanding these admonitions we embarked on our project, confident that we could sort out the issues and accomplish our objectives with the help of the right people in Vallarta. Our basic approach was simple.

  • We used our common business sense to understand the risks and the situation.
  • We attempted to adjust our expectations to the realities of the Mexican culture and business environment.
  • And, most important, we were careful to choose trustworthy Mexican people to help us.
    There is story that is told in Mexico about Americans who check their brains at the border and make illogical and emotional
    decisions to purchase property without taking normal steps to make sure that the transaction is completed in a business like
    manner. The ocean is beautiful, you are on vacation in paradise, you are away from home and emotions tell you that you cannot
    lose if you buy this place now. This is probably a true story for some people. Anyone venturing in to a foreign country without
    understanding the culture and the legal system may fail to evaluate the risk of making an investment. The key to any adventure is
    under-standing the process and the risks and most of all, picking the right people to help you.
    At home you would never buy property without the advice of your attorney or a real estate advisor. You would insure or thoroughly
    investigate your title. You would interview a number of qualified contractors and architects. You would check references. You
    would visit other houses designed or built by the people you were interviewing for your project to see them first hand. You
    would look at many houses or condominiums before forming your own opinion about what is a fair value for a house that meets
    your requirements. You would then establish a reasonable time schedule and a thorough budget. And, you would enter in to appropriate
    contracts that protect your legal interests. Thereafter, you would “;Trust”; your local professionals to help you
    complete or close on your project according to your plan.At home or abroad the same pitfalls await you. Picking the wrong
    people to help you with your project; making the mistake of choosing to do business with the unscrupulous; underestimating
    the costs or misjudging the schedule can all get you in trouble. Our experience was truly a pleasure. Our professionals have become
    our friends. Enrique Garcia and Ruben Alverez combined their design and administrative talent to create a superior design
    for our difficult sloping site. Juan Pablo Stone and his crew finished our high quality project on time and within our budget.
    Our Casa is a haven for our family…and we are happy with most every aspect of our project. Here is a list of things we think
    a Foreigner should do to insure that your experience building a house in Mexico will turn out to be fun and satisfying.

Establish a Business Like Process:

  • Remember that things generally will take somewhat longer than you expect in the USA, particularly if you are operating
    “;long distance”; and travel – bridging the communication gap is necessary.
  • Buy your land from a reputable seller or developer who can provide proper evidence of title.
  • Hire a bi-lingual, reputable Mexican attorney to represent your interests and to review your purchase and construction
    documents. Use your Attorney to work with the seller of the land and the Notario at the time of closing on your purchase.
  • Acquaint yourself with the Fideicomiso (“;Trust”;) system applicable to foreigners in Mexico for holding land.
    This system is well established now in Mexico and is similar to setting up a Trust in the US (which many US citizens do) to hold title to a homestead.
  • Make sure you understand the risks related to the availability of sewer, water, roads, electricity and infrastructure where
    you plan to build. Many developments in Mexico are being completed
    piecemeal and you could end up with unexpected problems if you do not understand the risks.
  • Select a large reputable Mexican bank as the trustee for your Fideicomiso (suggestions would be Banamex which is owned
    by Citibank of New York, Bancomer, Lloyds or a similar international institution)
  • Stay away from building on Ejido land since your ability to be sure of your title is questionable.
  • Interview at least 3 Architects and assure yourself that they have up to date computer technology to communicate documents
    and drawings over the Internet. If they do not have a an English speaking member of their firm, determine up front how comfortable
    you are with the language barrier since you will need to answer and ask many questions during the design and construction process.
  • Tour at least 5 houses designed by each Architect, and make sure they have designed houses that meet your expectations for
    quality and aesthetics. Ask for references from owners of houses that are complete and actually call the customers to find out
    how they think their project turned out.
  • When selecting a contractor, follow the same process. Interview at least 3, tour at least 5 houses each has built, ask for references
    and actually call the owners of the completed houses to get their perspectives.
  • If any architect or contractor you interview cannot show a track record (projects and references) it is best not to take the risk.
  • Do not pay large sums of money in advance without knowing precisely how to track the money as it is being spent. Have
    your Attorney advise you on how to transfer funds and make sure you are getting a fair exchange rate and know what you are paying
    for. We set up a weekly system with a US bank for transferring US dollars in to Pesos and Juan Pablo Stone had a bank account
    at Banamex to receive and disburse the funds. We received a weekly summary of every check written and obtained copies of all invoices every month or so.
  • 13. Realize that construction means and methods in Mexico are very labor intensive. Machines and technology are less common,
    Vendors do not always show up on a tight schedule. Plan for this in your own schedule and you will not be disappointed.
  • Take in to account Mexican holidays and national days off, they are different than the USA.

Good design and systems create “;value”; in the PV tropical Oceanside environment:

  • You are in an earthquake and hurricane area, so make sure your architect develops good structural plans that are certified by a qualified engineer.
  • Make sure you have a good balance of shady and sunny places for guests to sit.
  • Try to have your indoor spaces flow easily to outdoor terraces and pools.
  • Create gardens and pots that integrate with the living spaces flowers and palms add immeasurably to the feeling of a Mexican Casa.
  • Study the sight lines from your land and make sure you maximize the view from every room possible.
  • Air conditioning is expensive, so try to design your Casa with good cross-ventilation and use ceiling fans to circulate air.
  • Make sure you can close windows and air-condition in the rainy season.
  • If you plan to use your casa year-round, design your windows and doors to include screens for the unusual times that insects
    are prevalent. 9. Gas is very expensive and solar energy is a cost effective way to heat a swimming pool.
  • Put electric voltage regulators on your major appliances and computers.

The sun, tropical climate and salt water in the PV area raise durability issues that you need to consider:

  • Termites eat soft woods…so make sure your Architect specifies hard woods that resist them and buy furniture (not pine) that will also resist bugs.
  • Iron rusts quickly so try to use products that are resistant such as stainless steel and aluminum for hardware. Count on
    regularly repainting iron with rust resistant paints.
  • Use stainless steel and granite in your kitchen.
  • Make sure your casa has a large cistern to store water and a good water purification system.
  • Water is expensive so try to use your “grey water” to irrigate your garden and install toilet fixtures that conserve water.
  • Furniture coverings fade in the Sun (try to choose sun-resistant fabrics).
  • Custom made wood doors and windows are beautiful, but the sun and rainy season will cause the need for yearly maintenance to keep them looking fresh.
  • Select your tile or stone floor surfaces carefully to be durable and to resist stains. If you follow our suggestions,
    you are likely to have a fun and interesting time building in Mexico.

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