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 Frequently Asked QuestionsLast updated September 23, 2009 We have tried to anticipate the information you might want to know related to purchasing property at Ocean Star Estates, and invite you to peruse our detailed Frequently Asked Questions and Answers below. Presented first is a "table of contents" of all the questions. You can click on any of the headers to go right to that section. Whenever a new question is posted, you will see new appear next to it in the table of contents, until the next update (the date of which appears at the top of this page). If you have a question that is not answered below, please send your question to us by clicking on the following link: dino@rogueinvestor.com. We will make every effort to post an answer on this page in a timely manner. Table of Contents:Reasons to invest Location Description of Property
Purchase
Price Choosing a Lot Reserving a Lot Changing a Reservation Cancelling a Reservation
Closing Title Insurance and Taxes Infrastructure Construction Property Rental
Selling
Your
Property Is English spoken in the country? Is it safe to travel in the Dominican Republic? Is it safe to drink the water? Frequently Asked Questions: QUESTION: Why should I purchase a lot in Ocean Star Estates? ANSWER: Rogue Investor, LLC spent 6 months researching the entire coast of the Dominican Republic, and believes this property is the most undervalued and beautiful you could find in any market. Here are some reasons to invest in Ocean Star Estates:
QUESTION:
What
is the
Dominican
Republic
government
doing to
promote
investment
in the
country? The Foreign Investment Law provides foreign investors the same rights to own property as are guaranteed by the Dominican Constitution to Dominican investors. In 2004, the Dominican Republic joined the Central America Free Trade Agreement (CAFTA), which includes the United States. The agreement is now called CAFTA-DR. The American Chamber of Commerce in the Dominican Republic called this "a start when investors will have more certainty and confidence when making long-term investments...a start where increased transparency will contribute to the strengthening of institutions and the rule of law." The Dominican Republic government recently passed a bill offering further incentives to foreign retirees and investors such as are available in Costa Rica and Panama. That bill offers:
The Dominican Republic government has been a stable democracy since approximately 1966. QUESTION: Who is the owner of the property? ANSWER: Title to the property comprising Phase I (Blocks A - K) is in the name of Inversiones Dimerca, S.A., the Dominican Republic company formed by Ocean Star Estates, LLC to buy and sell real estate for it. Title to the property comprising Phase II (Blocks L - R) is owned by Ocean Star Estates, LLC. Rogue Investor, LLC is the manager and one of the owners of Ocean Star Estates, LLC, and will be responsible for developing the property. QUESTION: Can I see a copy of the title certificate for Ocean Star Estates? ANSWER: A copy of the certificate of title for Phase I is available by clicking here: parcel 912 and parcel 985. A copy of the certificate of title for Phase II is available by clicking here: titles. Documentation showing the registration of both of these companies in the Dominican Republic are available by clicking here: QUESTION: What is the developer's experience? ANSWER: As the Manager of the Ocean Star Estates development, Rogue Investor, LLC is responsible for land acquisition, marketing and sales, lot closings, and infrastructure, among other things. Its business is run with a staff of five full-time and two part-time employees in the United States, and four full-time employees in the Dominican Republic (see Who We Are). Rogue Investor is a mature enterprise with a solid reputation in real estate education and investing - most notably, tax liens and deeds, foreclosures, and international ocean-view property. It was founded in 2004 by the same owners who founded Mind Like Water, Inc. in 1999, with the purpose of focusing on the company's real estate investing business model. Rogue Investor, LLC is one of the owners of Ocean Star Estates, LLC. Michael Williams is a co-founder of Rogue Investor, LLC. As President and CEO, he ensures that the project goals and milestones for the Ocean Star Estates development are met through managing the U.S. and Dominican Republic staff and the project budgets. Prior to Rogue Investor, Mr. Williams worked for Black & Veatch, Jacob's Engineering Group, and Environmental Advisors & Engineers. Specific management accomplishments included managing two multi-million dollar cleanups of Marley Cooling Towers and Pueblo Army Depot. He also oversaw the development of several residential real estate developments. Mr. Williams has a B.S. in Geology and an M.S. in Environmental Science. Further information about the rest of the development team is available by clicking on Who We Are. LOCATION OF OCEAN STAR ESTATES QUESTION: Where is the development located? ANSWER: Ocean Star Estates is located near the town of Luperon on the beautiful North Shore of the Dominican Republic, in the Caribbean just south of Cuba. The Dominican Republic makes up approximately two-thirds of the island of Hispaniola. The remainder of the island is Haiti. For maps of the Dominican Republic, Dominican Republic provinces, and the north coast, click on More Maps. QUESTION: What is the nearest town and how far away is it? ANSWER: The closest town to the development is Luperon, which is approximately 5 miles (8.05 kilometers) away. For a map of the Dominican Republic north coast, click on More Maps. QUESTION: What is the nearest airport, how far away is it, and is there local transportation to the development? ANSWER: The nearest airport is the Gregorio Luperon Puerto Plata International Airport in Puerta Plata (airport code: POP). The airport is a 15-minute drive from Puerto Plata, a 5-minute drive from Sosua, and a 1-hour drive from the Ocean Star Estates development in Luperon. The airport is serviced locally by bus and taxi. Rental vehicles also are available at the airport. QUESTION: Is there a hospital nearby? ANSWER: The nearest hospital is in Puerta Plata, about one hour's drive to the east. QUESTION: What is the weather like in this area, are there hurricanes, and what about global warming? ANSWER: Average temperatures range from 75 to 85 degrees Fahrenheit (23 to 29 Celsius) in the winter and from 85 to 95 degrees Fahrenheit (29 to 35 Celsius) in the summer. The ocean breezes help moderate temperatures year round. The most common forecast is partly cloudy with a chance of short showers. The north coast of the Dominican Republic rarely has hurricanes. There have been only two mild hurricanes in the last 100 years. Global warming is expected to raise sea levels between 1 and 23 centimeters (9 inches). The most dire predictions say 89 centimeters (approximately 3 feet). The elevation at Ocean Star Estates ranges from about 50 meters (approximately 150 feet) at the back of the development to about 13 meters (approximately 40 feet) above sea level at the front of the development. Most of the lots are at elevations from 20 meters to 50 meters. QUESTION: What is the size of the development? ANSWER: The entire development comprising Phase I is 170,322 meters squared (m2), or 43 acres. Of this, 66% of the land will be used for residences; the remaining 34% will be parks, roads and other common areas. Phase II is 138,000 meters squared, or 34 acres. QUESTION: Has the development been surveyed and approved? ANSWER: The entire development comprising Phase I has been surveyed and approved by the Dominican Republic government. A survey map of Ocean Star Estates Phase I is available on our website by clicking here. In addition, all of the lots in Phase I have been surveyed and a deslinde approved. A survey map of the individual lots is available by clicking here. The entire development comprising Phase II has been surveyed and approved by the Dominican Republic government. A survey map of Ocean Star Estates Phase II is available on our website by clicking here. In addition, all of the lots in Phase II have been surveyed and the documentation submitted as the first phase of getting deslinde approval. QUESTION: How many lots are in the development? ANSWER: There are 116 lots in Phase I and 83 lots in Phase II. See the Plat Map and Lots for Sale. QUESTION: Do the lots have an ocean view? ANSWER: All of the lots have a spectacular view of the Atlantic Ocean. View our Virtual Walking Tour of Ocean Star Estates. During the infrastructure phase, all of the scrubs that are primarily responsible for impeding the view will be removed. The larger trees will be left; but you will only see the trunk, and the leafy part is well above the viewable area. Some trees will be trimmed as well. Views will be maximized while still preserving most of the native hard wood trees. For the most part, all palm trees will be preserved or in a few cases moved to allow for building. The palm trees do not block the views. Some locations have cacti that can impede views. These cacti will be evaluated on a case by case basis. Some that don't impede views will be preserved and some will be removed. QUESTION: How far is the ocean from the development? Is there a beach and will I have access? ANSWER: Ocean Star Estates has a private footpath that accesses a secluded beach. Every lot in the development (Phases I and II) has deeded access to the beach. No lot is more than approximately a 15-minute walk to the beach. Lots in Block J, for example, are only a 5-minute walk away. QUESTION: How big are the lots? ANSWER: Lots range in size from approximately 500 meters squared (m2) to 2,500 m2 (condominium lots are generally larger). One acre is approximately 4,000 m2, so most of the lots within Ocean Star Estates are a generous 1/8 to 1/2 acre. See the Lots for Sale Table for individual lot sizes. QUESTION: What is the elevation/topography of the development? ANSWER: The lots at the back of the development are about 150 feet (approximately 50 meters) above sea level, while the lots at the front of the development are about 40 feet (approximately 13 meters) above sea level. The terrain is a gently sloping hill towards the ocean. There are intermittent palm trees and some shrubbery. A topographical map is available by clicking on More Maps. QUESTION: What is an "Inst. Area," as designed on the plat map (e.g., Block H lot 19)? ANSWER: The Dominican Republic government requires that an area be set aside for medical aid, or basically a first aid station for residents of Ocean Star Estates. There may also be a convenience store and business center added in this area. QUESTION: What surrounds the development? ANSWER: Open farm land surrounds the development. QUESTION: How much do lots cost? ANSWER: Lots range in price from $49,900 to $109,900 for residential lots, and up to $249,900 for condo lots. Prices are based on lot sizes and views. See the Lots for Sale Table for lot sizes and prices. QUESTION: What is the deposit to reserve a lot? ANSWER: A deposit of US$5,000 PER LOT is required to reserve a lot. This deposit will be applied to the purchase price. If you are purchasing a lot using your self-directed IRA, no deposit is required. Personal funds cannot be used to reserve a lot because this will be construed as a self-dealing transaction and thus a prohibited transaction under IRS section 4975. The total purchase price is to be paid from the self-directed IRA. Click on Self-Directed IRA after mousing over "Purchase a Lot" for more information. QUESTION: What if I want to pay for the property using my self-directed IRA? ANSWER: You may purchase a lot using your self-directed IRA. For more details, click on Self-Directed IRA after mousing over "Purchase a Lot" for more information. QUESTION: What if I want to finance the purchase of my lot? ANSWER: Owner financing for the purchase of lots is available through Ocean Star Estates, LLC. The terms of the financing are as follows: (1) interest rate = 8.75% (2) amortization = 20 years (3) balloon = 4 years (4) a 5% finance fee on the amount being financed for down payments less than 40%. For more information, click on Owner Financing after mousing over "Purchase a Lot." QUESTION: What information is available to me to choose a lot without actually visiting the property? ANSWER: You can use the following resources to help in your decision making:
QUESTION: What if I want to view the development before reserving a lot? ANSWER: Our staff in the Dominican Republic is available to spend the day with you touring this beautiful development at a minimal charge. If you have reserved a lot already, our Luperon Tour is free for you and a guest. We also offer more expansive tours that allow for sightseeing of the area. For more information, click on Tour Packages after mousing over "Visit OSE." QUESTION: What is the process for reserving a lot? ANSWER: Detailed information on the process for reserving a lot is available on our Reserve a Lot web page (mouse over "Purchase a Lot" for the link).
QUESTION: What if I want to change my reservation
to a
different
lot? QUESTION: How do I cancel my reservation?ANSWER: Detailed information on the process for cancelling a reservation is available on our Reserve a Lot web page (mouse over "Purchase a Lot" for the link). QUESTION: What is the closing process? ANSWER: Detailed information on the process for closing, along with an example contract, is available on our Closing Process web page (mouse over "Purchase a Lot" for the link). QUESTION: How long do I have to close? ANSWER: For cash sales, your full payment, closing costs, and signed contracts are due no later than 45 days following the signature date on your reservation agreement. If you are owner financing your lot purchase (through Ocean Star Estates, LLC), then the non-financed portion of your payment, closing costs, signed mortgage note, and signed contracts are due no later than 45 days following the signature date on your reservation agreement. Payments made by credit card will incur an additional 4% transaction fee. The first month's mortgage payment and any finance fee are due on the first day of the first month after the 75th day following the signature date on your reservation agreement. A penalty of 1 percent of the amount due (full payment or down payment) will be assessed for each 30 days the payment is late. We reserve the right to cancel your reservation, with no refund of the deposit, if said payment is late more than 90 days. QUESTION: Are there closing costs? ANSWER: Closing costs apply to both cash sales and owner financed sales. The closing cost fee is 2.5 percent of the purchase price. This covers the property registry tax, the document stamp tax, attorney's fees, surveying of the lot, and government recording and documentation fees for the deed. In addition to the closing costs, buyer will be responsible for paying the property transfer tax fee. Under Law No. 288-04, the transfer tax is set at 3 percent of the government-appraised/set value of the property or of the purchase price, whichever is higher, and must be paid to the Tax Authority. Most of the land in the Dominican Republic already has a set value and does not need to be appraised. More information about the taxes to be paid by the buyer upon conveyance of the property is at Title Transfer. QUESTION: Does Ocean Star Estates have title insurance? ANSWER: Yes, both phases of Ocean Star Estates have been insured by Stewart Title Dominicana, S.A. A copy of the title guarantee can be viewed by clicking on the following links: QUESTION: Is title insurance available for my lot? ANSWER: Yes, title insurance is available through Stewart Title Insurance, a U.S. company which has offices in the Dominican Republic. The price for title insurance is approximately 1 percent of the purchase price of the lot. QUESTION: What is the property transfer tax fee? ANSWER: In addition to the closing costs, buyer will be responsible for paying the property transfer tax fee. Under Law No. 288-04, the transfer tax is set at 3 percent of the government-appraised/set value of the property or of the purchase price, whichever is higher, and must be paid to the Tax Authority. Most of the land in the Dominican Republic already has a set value and does not need to be appraised. QUESTION: What are the annual property taxes? ANSWER: Properties held in the name of an individual are subject to an annual property tax (IPI) of 1 percent of the government-appraised value in excess of RD$5 million pesos (about US$150,000), except for unbuilt lots or farms outside city limits; and properties whose owner is 65 years old or older, who has registered it in his or her name for more than 15 years and has no other property. If the property is held by a corporation, no property tax is due. Instead, the corporation must pay a 1 percent tax on corporate assets. However, any income tax paid by the corporation will constitute a credit toward the tax on assets, so that if corporate income taxes are equal to or higher than the taxes on assets due, the corporation will have no obligation to pay taxes on the assets. QUESTION: What infrastructure is planned for the development and when will it be completed? ANSWER: Lots will be serviced by electricity and roads. In conjunction with home construction, property owners will install a septic tank. The community will be serviced by two groundwater monitoring wells. Utilities will primarily be underground so as not to obstruct ocean views. Besides this basic infrastructure, Ocean Star Estates Phase I will feature a clubhouse, tennis courts, swimming pool, convenience store, business center, institutional area and green space. Phase II will feature an institutional area, horse stables, a bike rental facility, an "adventure" trail that leads to the beach for non-motorized use (horses, bikes, walking), and green space. QUESTION: What infrastructure is completed? ANSWER: Initial roads were cut in Phase I iand currently plans required for permitting have been submitted. The required permitting is currently being obtained to finish the roads to a hard gravel surface, and we have obtained a temporary work permit to enable us to continue to work until the final permit arrives. The roads in Phase I will be finalized as soon as the water and electricity is installed (which will be installed simultaneously). Final paving will consist of asphalt. The main government road leading to the Ocean Star Estates development has been improved. This is a major accomplishment because previously the road was difficult to travel on, especially during the rainy season. Rogue Investor negotiated an agreement with the government of Puerto Plata that allowed this three-mile stretch of road from the town of Luperon to the entrance of our development to be upgraded, making it easier to get to the site. The government has made tremendous progress in the improvement of this road, and is currently approaching the finalization stages. What was once a 30-minute drive now takes approximately 10 to 15 minutes. This alone will result in significant price appreciations for all property owners. IThe road leading to nearby Cambiazo has been cleared and leveled, making it easier to drive from the development to this town. Cambiazo's beautiful crescent-shaped beach is next to Ocean Star Estates' secluded beach, to the east. For more details on the infrastructure, including updates and photos, click on Infrastructure Updates after mousing over "Home Building." QUESTION: Will the roads be paved? ANSWER: Final roads will be paved with asphalt; however, roads will remain hard compacted gravel until the basic infrastructure is completed to avoid tearing up the roads with heavy equipment. QUESTION: What is the road in Block J like? ANSWER: The smaller path in front of the Block J lots, bordering the green space, will be a wide foot path without vehicle access. QUESTION: Are there costs to the buyer related to the infrastructure? ANSWER: Every property owner will be granted 12 months of no maintenance fees. After this first year, the fee will be determined by the homeowners association. QUESTION: Will there be sewer service or septic tanks? ANSWER: Septic tanks will be installed by homeowners as part of home construction. These systems, which are common throughout the Dominican Republic and many other islands in the Caribbean, are closed duel tank systems and require little maintenance. This construction practice protects potable groundwater quality, especially in coastal areas. Usually the system is cleaned every two to three years, depending upon use. QUESTION: Will there be a water treatment facility for the development? ANSWER: Phase I will be serviced by three groundwater monitoring wells. One well currently exists, and the other two will be installed according to the engineer's water drawings. A well survey was conducted throughout the area and groundwater is plentiful beneath the site, recent test proved the water to be potable. Several rivers are located close to the site, and the alluvial deposits are saturated. All land owners in the area use groundwater for potable water and several wells already exist onsite. To supply water to homeowners, production wells will be drilled and an onsite tank will be installed for water storage. Water lines will be installed in Phase I at the same time as electric lines. Ocean Star Estates has received the water drawings from the engineer and is currently receiving water installation quotes. QUESTION: Will there be phone lines and Internet access? ANSWER: There are no plans to install telephone lines - most people use cellular phones. As building progresses, we will look into requesting that another cell phone tower be installed in the area. Wireless Internet access is planned for at least one, and possible two, locations at Ocean Star Estates. Initially, we will probably use satellite. As the development matures, cable or phone Internet access may be considered. QUESTION: Will there be a backup generator for the electricity? ANSWER: The electrical infrastructure will be installed along with the water infrastructure after final road preparation has been completed. We will use our own source of electrical power with a backup generator. As more properties are built and the development proceeds, the benefit of tapping into the local power grid will be analyzed. QUESTION: Can I build on my lot immediately, once I have closed? ANSWER: You may begin building on your lot once there is sufficient infrastructure in place. All building plans must be approved by Ocean Star Estates, LLC prior to construction. More information about the home building process is available on our website. QUESTION: Are there architectural floorplans available? ANSWER: Architectural floorplans and renderings are available for small, medium and large houses, and two duplexes. There also are two home packages. Mouse over "Home Building" for the link to the floorplans. QUESTION: Is there a time frame within which I have to begin building on my lot? ANSWER: Upon receipt of a title, the lot owner has a maximum of up to two years to submit a set of construction documents and specifications to the ACC for approval. Upon approval by the ACC, construction must be initiated within a maximum of six months. Construction must be completed within one year of construction initiation, including landscaping. Lot owners who do not intend to build must list their property for sale within a maximum of three years from receipt of their title. QUESTION: Is there a minimum building size? ANSWER: The building must be at least 1000 square feet. QUESTION: Is there a limit on the number of stories? ANSWER: The following height restrictions apply to any approved structure on a lot:
The height shall be measured from the highest point of the lot in which the structure meets the land to the highest point of the roof. Measurements are subject to approval by the ACC. QUESTION: How many houses can I put on a lot? ANSWER: One house per lot is allowed. QUESTION: Can I combine lots and build just one house/structure on that? ANSWER: Yes. QUESTION: What else can I build on my lot besides a house? ANSWER: A duplex, multi-family, or condo may be allowed in some areas (see Lots for Sale). QUESTION: Can I build a pool on my lot, and what does that cost? ANSWER: Yes. The cost of a pool ranges from $8,000 to $12,000. QUESTION: What are the building costs? ANSWER: Costs will vary by builder (US$50 to US$100 per square foot), with an average of approximately US$75 per square foot. This is very low compared to building costs in America.QUESTION: What are houses like in the Dominican Republic? ANSWER: Houses are typically built out of cinder blocks and covered in stucco. They do not usually have basements. QUESTION: Have soil stability tests been done on the site? ANSWER: Soil testing has not been done because the results are highly variable depending upon each location. Therefore, it will be necessary for each home owner in coordination with his/her architect or engineer to do his/her own soil testing. These tests are not expensive and may not be needed in all cases. QUESTION: What is the typical time to build a house? ANSWER: On average, 5-7 months. Building normally cannot proceed during the rainy season (approximately December 15 through March 15). QUESTION: Do you have the name of a builder in the Dominican Republic that I could contact? ANSWER: Click here for information about the building team. QUESTION: What are the other covenant restrictions related to building? ANSWER: Click here for the covenant restrictions. QUESTION: Is construction financing available? ANSWER: At this time we are not offering construction financing. That may change in the future. QUESTION: How do I maintain my property if I don't live in the Dominican Republic? ANSWER: You can arrange to have the grass cut for approximately $25 per cutting (once per week during the rainy season and every other week during the rest of the year). A full-time gardener charges approximately $50 per week. QUESTION: Can I rent my property? ANSWER: Yes. Click on Renting Your Property (mouse over "Home Building" for the link) for more information. QUESTION: What is the high season for rentals? ANSWER: There is year-round rental, with the high season being December 1 through May 15. QUESTION: How much are properties being rented for in the area? ANSWER: $1000 - $1500 per week during the high season for a 2-bedroom, 2-bath property; the same amount per month during the low season. QUESTION: Are there rental management companies in the Dominican Republic? ANSWER: Yes. In addition, Rogue Investor, LLC can provide rental management services for properties at Ocean Star Estates. For more information, please contact us. QUESTION: What is the typical rental management fee? ANSWER: The fees are approximately 10 to 20 percent of the rental amount. QUESTION: What is the tourism industry like in the Dominican Republic? ANSWER: Travel to the Dominican Republic is up from 1,925,565 tourists in 1996 to 3,965,055 in 2006, according to statistics the Ministry of Tourism has at hand. The number of hotel rooms has increased from 36,273 in 1996 to 63,206 in 2006, representing a 31.5% increase. In the past three years the government has spent RD$1.6 billion on tourism infrastructure and from August 2004 to July 2007, the Ministry of Tourism has invested US$60,640,000 on advertising abroad. For more information about the tourism industry, click on Renting Your Property (mouse over "Home Building" for the link). A strengthening Canadian dollar and economy is boosting Canadian travel. Canadian travel increased from 427,074 travelers to the Dominican Republic in 2005 to 509,323 for 2006. Better yet, the first six months of the year are showing 395,612 arrivals, compared to 286,975 for January to June 2006, representing a significant increase of 37%. QUESTION: What if I want to sell my property after closing on it? ANSWER: Once you have received a title to your property, you may resell it if you wish. You can contact any local real estate agent, or we can help. Our sales commision fee is 12% for land and 7% for completed homes. For more information, please contact us.QUESTION: Can I take the profits from the sale of my property out of the Dominican Republic? I understand that this is not allowed in Costa Rica. ANSWER: Yes you can. According to our attorney in the Dominican Republic, Carmen Jaquez, no impediments exist to taking out of the country the benefits from any commercial activity that is made. There is no Dominican Republic law prohibiting this, and neither is there any law specifying it, but what the law does not prohibit is allowed. QUESTION: When is the best time of year to visit? ANSWER: The peak travel seasons are July through August, and December through March, which reflect the vacation periods of Europeans and North Americans. According to the Dominican Republic tourism minister, in the past year or so most tourists have been from Canada, United States, England and Italy. QUESTION: Is English spoken in the Dominican Republic? ANSWER: Although Spanish is the native language, most resorts will have individuals who speak English. QUESTION: Is it safe to travel in the Dominican Republic? ANSWER: The violent crime rate is relatively low, and Rogue Investor's experience traveling in the country is that people are genuinely friendly and helpful. QUESTION: Is it safe to drink the water? ANSWER: Tap water should be avoided unless it has been boiled. Almost all resorts provide purified water, and bottled water can be purchased almost anywhere. |
