Wednesday, October 29, 2014
I wrote a few weeks back about an exciting opportunity. In a top-notch community, you could buy a finished or almost-finished condo—yet pay a pre-construction price.
The upside of buying pre-construction is the price discount you get, as much as 30% off the price of a finished home. That's the reward for taking a risk on a pre-construction property where you may wait some years for delivery.
So it's a win-win where you pay a pre-construction price on a completed or almost-completed unit. You get the reward of a lower price. But you're cutting out the risk that you won't get your unit.
The icing on the cake is you can still get developer financing on the condos over five years.
My alert caught the attention of lots of readers. Some have already made an offer on the available units. That's why I'm writing today. If you're interested in this deal, you can't sit on the fence.
I think the remaining couple of units will sell quickly. This is your last chance to grab a slice of the action. You can contact the developer here to get details of the units, including price, size and layout, and the finance on offer.
Pre-Construction Price on a Move-In Ready Condo
We often write about pre-construction property. This is where you buy a property that a developer plans to build. You need to wait a period of time, sometimes several years, for delivery. That's several years before you can move into the home or start renting it out.
For some folks it's hard to get a handle on pre-construction property. If a project's in its early stages, there's usually nothing to see to give you an idea of what you'll get. You can't check the quality of the finishes or the standard of construction.
You're buying a set of plans. My husband, with an engineering background, gets to grips quickly and easily with floor plans. I'm terrible. I can see where the doors and windows are and the square feet in each room. But I just can't visualize it. I have no idea what the finished home will look like.
That's the risk with pre-construction. You have no idea what you're going to get—or even if you'll ever get it. The project may never get started if sales are slow or the developer can't get financing. You might end up with plain tile floors instead of the marble you were promised. The Olympic-size swimming pool and Jacuzzi tubs in the fancy master plan may never materialize.
But it's a risk that can pay off. The upside with pre-construction is the pricing, sometimes as much as 30% below current market values. Get in early, sell on completion and you can pocket a nice fat profit.
One developer we work with definitely rates a gold star. Readers started buying pre-construction units from him in spring of 2009. In August 2010, he delivered the first units. Put a photo of the finished units alongside the pre-construction renders and there's no difference. The developer delivered exactly what he promised.
He's carried on doing that since then. He's got happy buyers. So much so, that many went on to buy in his second project in the same area.
Buyers are seeing added value in their finished homes, too. In the second project, one buyer paid $359,000 for a residence. They sold three years later for $480,000 (that is the net price, minus commissions).
Most buyers who purchase pre-construction make a down payment and then monthly payments until completion. On completion, they pay the pending balance. If they back out, they lose what they have paid to date. They have skin in the game so don't want to back out. And they don't want to back out if they can see the prospect of making a profit by selling the unit on.
But sometimes buyers simply can't close a sale. They may have lost their job or the stocks they bought didn't pan out. They may have needed another property back home to sell to pull together the funds needed to close. It's a tricky situation for a developer.
They've now got a brand-new resale on their hands. But they specialize in selling pre-construction. They can't sell this unit at the same price as their current pre-construction units. That doesn't make sense. So what can they do with it?
One option is to offer it discreetly to buyers who agree not to disclose what they pay for the unit. And that's the special situation we have today.
The gold-star developer we work with has a handful of units where buyers couldn't close. They're finished or almost finished. He's happy to sell them on at current pre-construction pricing. But he wants the final sale price to stay confidential.
He will offer some developer financing so you won't have to pay for the unit in one hit. You pay 20% down, and then an additional 30% at delivery. Once you have paid 50%, you can pay the remaining 50% balance or take advantage of developer financing over 5 years at 5% fixed.
You get the best of both worlds. You get a finished or almost-complete unit at a pre-construction price with developer finance on offer.
Just so you know, pre-construction units with later delivery dates start from the same price as the finished units. You pay 50% of the purchase price during construction. Because you've got a delivery date that's a few years away, you get to spread your payments over a longer timeframe than with the finished unit. And you can still finance the 50% balance with the developer.
The developer wants to focus on selling and building pre-construction units. He wants the finished or almost-complete units off his hands so he can do that. He's offering a good price and financing. All he asks in return is your discretion. You can't reveal any details about the deal to third parties.
You can contact the developer here to get details on the units, including price, size and layout. He can also send you photos of finished units.
This is a rare opportunity where you can cash in on pre-construction pricing without the risk. If you want more details:
P.S. Members of Real Estate Trend Alert (RETA) get an exclusive discount of $14,070 on select pre-construction condos in this community…and first pick of units with low pre-launch pricing on any new phases released. If you're not a RETA member, you're missing out…leaving cash and potential profit on the table. Watch this video to get more details and find out how to become a member.