I am starting to get involved with flipping new construction. I have my first condo under contract. The building dosen’t start until the end of 2006. My unit will not be complete until 2007. This area is growing rapidly so I am assuming my return will be great.
A few questions:
Would I need to sell this unit before I close?
I have a pre approval, can I use the same pre approval to put another unit under contract somewhere eles?
Also,
Does anyone know how do you find out about pre construction deals like this in Florida? I just happen to stumble across this project/deal unintentionally.
You probably won’t get too much response to flipping new construction questions on this site. Unless you are buying the new construction below market value it is purely a speculative purchase, and most people on this site deal with safer investments with immediate equity. I have bought some new construction homes and done well, but it is risky especially if you plan to quick flip. You should be aware of the tax problems and loan issues you may have if you do too many quick flips. You also need to make sure your loan doesn’t have any penalties for quick payoffs. I have always bought and held my pre-constructions so I haven’t had to worry about these issues.
Regarding your questions though, you can’t technically sell your property until it closes because that is when it becomes yours. If you find a buyer before you close you can do a simultaneous close where it transfers from the builder to you then to your buyer. This would be good if you build up enough equity to overcome your costs and want to avoid any holding costs.
Regarding the pre-approval, since your closing is so far away I assume it is a generic letter from your lender or mortgage broker that says they would be willing to give you a loan based on how your credit looked when you talked to them. If this is the case then you can probably use that letter again because it doesn’t really guarantee anything.
Thanks Bargain!