Build a Villa in Puerto Plata

Welcome to the forum!

We're currently in month 12 of our 10-month construction contract!   

Our payment schedule was as follows:
On signing           30%
+45 days              15%
+90 days              15%
+120 days            20%
+180 days            10%
On Delivery         10%

So we've paid a good chunk of the cost already. With the rising cost of materials, it's probably better to buy materials as early as possible. Our builder bought all the block, concrete, and rebar that would be needed right away to mitigate rising prices and/or material shortages.

I would also be wary of a promise to build in 4-6 months. That appears to be unrealistic; granted I don't know the extent of your build. That may account for their accelerated payment schedule, but I wouldn't accept what they are proposing.

Cudos to you for being sharp enough to ask these questions. Many simple put down the money, expect the project to be executed to their satisfaction, and when it is not they look for recourse, which simply may not exist.

Right now big issue with materials everywhere so watch timelines.

Thanks for the insight. Did you have anything in place to comfort you with a 30% payment due at closing? Besides time lines I'm very leary of giving up that kind of money. Materials are a big issue in the US as well. I order everything early for my projects to try and mitigate cost over runs and to try and stick to a time line.

Glad to hear about your project!

Definitely. Putting 30% down is definitely not a route I'd like to take.

They did use the reason of having to purchase initial materials for the 30% down. One reason we searched for a financially sound builder with a good reputation. The three partners owning the building company are very solid. We vetted our builder as much as possible, including inquiry with owners of structures they have built here in LT years ago.    In my opinion there is no other way to do it. Get out there in the community and ask about these guys, how long they have been building here, etc.

Large advance payments and a contractor positive cash flow are norms throughout the Caribbean as are prepayment of any materials imported prior to shipment to the islands.

The norm on larger contracts is that a large advance (which needs to be justified in terms of set up costs and early orders imo) is recovered bit by bit as the work in progress climbs to the full value and so the risk to the client diminishes as the building gets completed.

Unfortunately, building in a resort area is going to limit ones choice of contractors and the terms they will expect. A good example of what you will be asked is given in post #2.

I totally agree that 4/6 months build time is going to be unrealistic and any time commitment given will probably not be met as posters have confirmed in this forum in various threads - and again your contractor is not going to agree to any penalties  for late delivery especially in these times of higher construction cost inflation and variable delivery lead times.

I would note that there may be additional permits needed when building in a tourist zone to comply with MITUR (Tourism Ministry) and Medio Ambiente  (Environmental Ministry). These may delay the construction start date. Worth checking.

And because the proposed building is in Puerto Plata, a structural engineer should be engaged to ensure the designs meet the seismic code. Puerto Plata has a number of active fault lines nearby and was hit by a strong damaging earthquake in 2003. And DR is due/overdue a major event too.

If you don't like the big upfront costs and associated risks, you can either spend much more time on the ground researching and negotiating with contractors and then monitoring/managing their work and progress,  or go the Dominican way - buy all your own materials and buy labour only packages as the work progresses to your cash flow. This is a far cheaper, lower risk way to go, but needs your fuller presence and understanding of DR construction and good Spanish understanding.

^^^^ great advice on construction, as always   

Thanks, great advice!

Do you have any contractors you recommend?

Sorry, can't help with contractors for domestic construction in PP.

I suggest you do what Rocky and Denise did apparently in Las Terrenas which was to spend much time understanding and researching the real estate market and contractors before making their long term commitment building a villa.

Another poster in a recent thread has posted of his learning experiences and the challenges of building on the North Coast too.

'Less haste and more speed' is probably a useful motto to follow when thinking of moving to, buying or building in DR. It is not like one is used to back home. On the surface it seems fine, scratch the surface, peep in and you discover plenty of issues.