Series #4 Remodel or New Construction?
In my last article I stated that the single most important decision you’ll need to make is whether to choose a “fixed price bid” or “time and materials contract” with your builder in Mexico. That decision will often be influenced by the kind of property you buy? Are you looking to remodel, simply interested in land you can develop or seeking a new home that offers a builder’s warranty? There are arguments—and temperaments—for all three. Even though my husband survived and now loves our home, which is a combination of renovation and new construction, he vows he would never do it again. Instead he would purchase a new home with a warranty like our neighbors, where he can actually see the finished product first. He admits he doesn’t have the temperament to make all the decisions required to build another custom home. I on the other hand feel I’ve learned a lot and could do an even better job next time. But there are benefits to purchasing a new home in Mexico, mainly the builder’s warrantee.
When problems occur during the first year, the builder pays for all repairs. In our case, we purchased a remodel and agreed to a “time and materials” contract which puts us on the hook for all repairs for the life of the property, with the exception of sub contractors like the plumber, electrician, window and door man. In the case of new construction, if you negotiate a fixed price bid, be sure to ask the builder whether a warranty is included and, if so, get it in writing.
Due to the size of our property and the cost, we chose to build in phases. Phase I involved remodeling the existing three bedroom home. Phase II renovated the ruins or outbuildings into two casitas or guest rooms, a bathroom and fountain, and phase III constructed a new 600 square foot professional teaching kitchen, master bedroom, terrace, center courtyard and main entrance. The entire project took three years to build because we paid cash for each phase of construction. Mortgages at that time were unavailable. Ultimately we sold an investment property in California to finance phases I and II and moved to SMA the third year to supervise phase III with the proceeds from the sale of our Napa Valley home.
There were some decided advantages and disadvantages with this strategy. On the positive side, we now own our Mexico property free and clear and sold our Napa Valley real estate when it was most valuable. We also built our home when the US Dollar-Mexican Pesos exchange rate was much higher. But on the downside, we no longer own CA real estate, construction materials rose during that three year period due to hurricane Katrina and for each year you are under construction here the government requires owners to pay their Mexican workers a Christmas bonus, or aguinal equilivant to 2 weeks pay, and host a party…..so the longer you take to build the higher the costs.
Nevertheless during those three years of construction, we saw our property miraculously transformed from a diamond in the rough to an architectural wonder. I witnessed our entire compound being built with only two power tools: a drill and tile cutter, the rest crafted from a chisel, hammer, trough, iron cutter, level, plumb bob, paint brush and bucket. 15 men lifting a 700 pound, 12 x 9 feet piece of glass to the third floor of our home to form the ceiling, using only a combination of ladders, scaffold and brute strength. Sinks being made from hollowed out dirt in our center courtyard. And an army of workers humping nearly one ton of professional freezers, refrigerators, ovens and cookers manufactured by the Viking Range Corporation with nothing more than ropes and their backs.
Our 12 hombres were some of the strongest, most honest and hard working laborers I’ve ever seen. We recognized and rewarded them weekly for their devotion by preparing lunch, here called comeda, every Wednesday–hump day…something no one had ever done for them before. They eagerly enjoyed arrancherra, spaghetti… tacos, chili, grilled chicken, carnitas, puerco con tomatillo and anything else I put before them.
And they rewarded us by being unconditionally hardworking and concerned for our home, returning late one night when the rains came flooding a casita which housed many books and furnishings being stored until project completion; diligently carrying the basura to the trash man every Monday, Wednesday and Friday; and putting pressure on the hierro, our iron man, to finish the railings throughout our home when he had been prepaid but slow to deliver. It seemed the more we did for them, the more they wanted to please us. They became in the process more than laborers, they became friends… Guadalupe, Antonio, Pablo, Patricio, Gustavo, Gerardo, Lauro, Ramon, Moises and Carlos…….. we began to think of them as members of our family.
And as the project drew to a close, there was reluctance on their part—and ours—to finish, Listo….in English. But not having an unlimited budget, we declared Friday, May 3, 2008 finito and said adios to our crew. Much to my surprise the following Monday, they all returned in force as I was departing for a much needed vacation. As my cab pulled away from the curb, they appeared lost—much worse, homeless………but not for long. We only thought we were finished!