Pre-construction investments in Cabo San Lucas (or any market) can offer great opportunities but also come with risks. Here are some potential dangers to be aware of:

1. Developer Reliability
Risk: If the developer has a poor track record or lacks sufficient funding, the project may be delayed, or worse, never completed.
Mitigation: Research the developer's history and financial backing, checking for completed and successful projects.
2. Delayed Timelines
Risk: Construction delays due to labor shortages, supply chain issues, legal disputes, or other unforeseen events can significantly impact completion dates.
Mitigation: Ensure contracts have clear timelines and penalty clauses for delays.
3. Legal Risks
Risk: Pre-construction projects in Mexico may face legal complications, such as disputes over land ownership, permits, or environmental regulations.
Mitigation: Hire a qualified local real estate attorney to review all contracts, titles, and permits.
4. Financial Risk
Risk: Early buyers in pre-construction projects often pay a significant portion upfront. If the project fails, retrieving this investment can be difficult.
Mitigation: Opt for projects offering escrow accounts that protect the buyer's investment until the project is delivered.
5. Quality Control
Risk: Pre-construction buyers often rely on brochures and floor plans without seeing a finished product. The final result may not match expectations.
Mitigation: Visit other completed developments by the same builder to gauge quality or request specific materials and finishes in your contract.
6. Market Fluctuations
Risk: The value of the property may decrease by the time construction is completed, especially if market conditions change, impacting resale or rental potential.
Mitigation: Evaluate long-term market trends and avoid overleveraging your investment.
7. Currency Exchange Risks
Risk: Since many pre-construction payments are made in US dollars, fluctuations in exchange rates between USD and the Mexican peso can increase overall costs.
Mitigation: Consider locking in exchange rates early through financial instruments or factoring this risk into your budget.
Being aware of these risks and doing thorough due diligence can help protect your investment in Cabo’s pre-construction market.

Fletcher Wheaton cabokey.com