Construction Nightmares in Cabo

Cabo is one of the hottest real etstate markets in North America right now. There’s a lot of land, and a lot of people are looking to build. But before I share a couple of real nightmare situations that have happened recently, I want to give you some advice: You need to vet your builder.

“An ounce of prevention is worth a pound of cure.”

- Benjamin Franklin

That means talking to at least three different builders. Don’t just take their word for it. Go see the homes they’ve actually built. Be careful—sometimes a builder will walk you through a house they didn’t even construct. You should be speaking directly with past clients and, just as importantly, checking out something they’re building right now.

Good builders will have multiple projects going on—because it’s their business. But there’s a balance here. If someone has too many projects, you might be just an afterthought. The point is: don’t just pick the first person who promises you the world.  Always get three quotes regardless. I’ve seen it firsthand: people who didn’t do their due diligence got burned. And while I’m not saying it was the client’s fault in these cases, the reality is you’ve got to protect yourself. Here are two recent conversations that really highlight the risks of building in Los Cabos—and why it pays to be careful when choosing a contractor.

The first story comes from right outside of Puerto Los Cabos, where the East Cape really begins. A soon to be home owner reached out to me because his build has turned into a disaster:

The contractor is already six months past the promised delivery date, even after the grace period. They came back and demanded 8% more money, blaming the exchange rate between the dolllar and the peso. And despite all that, the project still isn’t finished. Many contractors lowball quotes just to win jobs, then stall or demand more once the project is underway.

This owner is now talking to attorneys, trying to figure out how to protect himself. Newsflash: this isn’t the U.S. judicial system. If you think hiring an attorney is going to step in and fix your problem, you’re setting yourself up for disappointment. In many of these cases, the only person who walks away winning is the attorney—because you’re still on the hook for their fees.

The honest attorneys will tell you this upfront: depending on your situation and the contract you signed, your chances of recovering anything are slim to none. The hard truth is that once you’re in a bad construction or real estate situation here, you often have zero recourse. It’s a tough situation—and unfortunately, not uncommon.

But this isn’t just a problem with lower budget builds. It happens at the high end of the market, too. I recently spoke with someone building in Diamante, one of Cabo’s most exclusive golf course communities. This is home to the PGA Tour on Tiger Woods’ first course El Cardonal, The Dunes, and the soon-to-open Legacy Club—another Tiger Woods design. The average property price here (including homes and condos) is $3.5 million USD.

And yet, despite the prestige, this client’s build has also gone sideways. He’s already involving attorneys and a notary to document everything. The builder hasn’t completed what was promised, is now asking for more money, and the owner has decided he won’t move forward with the same builder - why would he? It’s a reminder that whether you’re spending $400,000 on the East Cape or $2.5 million in Diamante, the risks are real. Problems don’t discriminate by price point.

The takeaway is simple: choose your builder carefully. Don’t get seduced by the lowest quote, and don’t assume that just because you’re building in a luxury community everything will run smoothly. Too often, reaching out for help from an attorney after things go wrong is like going to the cardiologist after a heart attack.

If you need help finding a builder—or making sure the land you’re looking at can actually support the type of home or project you have in mind—reach out to Fletcher Wheaton – fletcher@remexico.com - Every project is unique, and different areas come with their own recommendations and requirements. Having the right guidance from the start makes all the difference.