Assessing a Neighborhood

[Jason Merchey]

I am trying to invest in a rental property. We would like it to cash flow at a certain rate, stand a decent chance of appreciation, be in a good location, be a good value, and so on.
We put a contract in on one last week and then began to think on a whole new level.... it happened because I asked a neighbor in the neighborhood when I was driving by a second time what she thought of the neighborhood. I believe the whole neighborhood was built by Ryland in 2005. She said she had minor X or Y problem with her house, nothing big, and nothing that would probably be 90% likely to be discovered during the home inspection. However, she noted that the neighbor was quite disgruntled with her house, involved in a lawsuit, etc. etc. She gave me her number. I also did a little digging online and of course you find evidence of Ryland making some lemons - which I think is probably par for the course with a home builder of this size (and who was building during the boom times and then during the recession). However, you also find a number of lawsuits that are either in process, or dismissed. There is also one lawsuit involving a fall that the plaintiff attributes to construction defects on a wooden walking path through the common area. Maybe she is a quack, or maybe the HOA is about to lose a lawsuit...
So you have a 10% change that you won't find everything about a home's condition (well, if you don't have an infrared camera and don't remove drywall). And then you have the usual concerns about the neighborhood HOA and its health and functionality, I am wondering, how can I trust a home builder or how can I come to believe that the neighborhood is safe to invest in? New homes are obviously a risk because builders do all kinds of things to cut corners, and you are going to be the new owner, and so you get to test out their customer service, their warranty, their product. But in something six or eight years old, if problems are apparently creeping up, how do you know how to assess and come to feel comfortable with the builder of the neighborhood in general - considering you can't inspect everyone's home or interview everyone or get access to every lawsuit's complaint? Is there an authoritative list of homebuilder quality or satisfaction one can trust (JD Power is not doing them in 2011 or 2013, and the BBB is questionable when everyone is getting an A+, etc)...

Sorry so long, but I couldn't shortchange this question because it is of such high importance to my investing career (young as it is).