Questions to ask when choosing a Custom Home Builder

When choosing a custom home builder, asking these questions to each builder you interview will provide an apples to apples comparison.

 

  • How many years have you been in business? How many homes have you  built?
  • Are you licensed (where required) and insured?
  • How do you compare yourself to other builders? What are the most important benefits of the homes you build?
  • What type of warranty do you offer?
  • Can you give me references from prior home buyers? Do you build model homes I can tour? If not, can you help me make an appointment to see a home you built for another customer?
  • What are the major energy-saving features of homes you build?
  • Do you build only from home plans you supply? Or can I provide my own  set of plans?
  • What standard features do your homes include? What options and upgrades can I  select?
  • Who will oversee the construction of my home? Who should I contact with any  questions I may have?
  • How and when can I make changes or upgrades before and during  construction?
  • How and when will the final price for my home be determined?
  • How often (and when) will I have access to the home during the building  process?
  • How long will my home take to complete?
  • Does the community have a Home Owners Association and/or an Architectural  Review Committee? If so, may I get a copy of their rules and the amount of any fees?
  • What’s your process for inspection at key points of construction, at final  walk-through, and to address any matters that need to be corrected or  finalized?

Of course, there are many more questions that one could ask, feel free to add any you’d like. Following a framework for the builder selection process will provide confidence down the road when you are frustrated, and wondering, did I make the right choice?

How you can use IRA money to invest in Real Estate

Direct your IRA $$$

San Diego 2nd Home — Part of Your IRA?

Some San Diego Retirement Portfolios Include Second Homes

San Diego Second Homes: Legitimate IRA Investments?

Investors are still shaking off the memory of watching what happened to their IRA stock portfolios during the nightmarish global financial crisis. Even the groggy recovery that’s been under way ever since has featured the kind of stomach-churning drops that drive investors to the Pepto-Bismol.

So it’s not surprising that some have been searching for alternative assets that could grow tax-free within their retirement accounts. And lately I’ve been hearing from more clients who are asking about the possibilities in real estate, including San Diego second homes and even vacant acreage.

You read that right: real estate is a little-publicized yet entirely legal vehicle for IRAs! Right now, when prices are at bargain-basement levels, investing for the long run in what many see as the most ‘real’ of all holdings certainly is an opportunity worth looking into. Nevertheless, there are some big cautions.

First off, let me emphasize that my area of expertise is real estate — not financial advice. Anyone who is serious about placing real estate in their IRA will absolutely need expert financial and tax advice. Yet, if what you read below makes sense, you should call me about rental property opportunities in San Diego.

They will explain that traditional IRAs can not include real estate; only ‘self-directed’ IRAs are eligible (although they are fairly easy to open or steer existing IRA assets into). Despite the fact that some extra freedom is granted such accounts, when you ‘self-direct’ an IRA, you are subject to some very firm prohibitions. In the case of a real estate investment, just one of those is that you can’t use the investment (for instance, if you purchased one of our San Diego second homes) for your own benefit until you retire. In other words, your pretty little cabin by the lake can be rented out, but you or your family can’t spend the weekend there. You also can’t hire yourself (or a company you own) to manage it. And if brother Fred wants to vacation in it (even if he would pay rent for the privilege), you have to tell him no.

The general idea is the same as with any IRA: you or family members cannot benefit from account assets until you retire. That makes perfect sense, because the funds used in it have been contributed tax-free, and any gains are appreciating tax-free. Still, if you can secure a non-recourse loan, that might allow you to effectively double your investment dollars.

The penalties for not following the rules make that not worth even thinking about. That means that most everyone will probably want to use an administrator or custodial firm with real estate experience. But for those who find second homes or other income-producing San Diego properties, the prospect of building a tax-free revenue stream within a self-directed IRA is certainly intriguing. It could mean the Pepto-Bismol stays on the medicine shelf.

I hope you will think of me whenever you decide to discuss the current prospects for any San Diego real estate investment. I’m standing by!