Hi all
Recently I bought a brand new townhouse and within the first year of me buying it the base price has already gone up 0ver 60K. I got in pretty early before a model was up and it seems that it just keeps going up and the development is still not even 50% done. My parents also just bought pretty early in some new construction and are seeing similar results.
I was wondering if this kind of investment is a good one. Meaning if I have enough to put the down payment and cover the closing costs is this normally a good deal? I was thinking of getting a home equity loan off my current house to cover the mortgage once the new house was built till I was ready to sell. Also I live in Maryland so closing costs are high. Any thoughts?
Pre Construction REI is a great way to make some good money. The mortgage dosn’t start till the day the house is done. In the mean time your trying to sell the house.
When I lived in California I use to do these all the time. They are hard to find where I am at now, But We use to go around an buy 2-3 houses in new tracks that were always in the first or second phases. Turn around and sell them around the day the house was finished. Making 50-60k on the sell… Not bad for tieing up a property for a few months for that big of a return huH?
I just have a few questions. Did you sell the houses or did you have an agent sell them for you? And how much cheaper did you sell them for vs the asking price for the brand new ones the builder was sellling?
What we use to do is get involved in the project about a month before they even break ground. We would buy the location, Typically in a Cul-de-sac, because most families love those locations the most. then for example if the house was 150k before they break ground. by the time the property was ready for move in, it would be around 175-200 depending on location. The builder at that point would be selling phase 3 at around 180-200 so i’d sell it in the middle. say 190. I sell it myself, “REALTOR” and make the com. on it. typically half. Just be for warned. Builders don’t like Investors purchasing their properties up. They feel they are getting screwed in the long run. But if you can keep a low key and try not to flaunt yourself as an investor at closing with the builder, you should be alright!!!
Hope this helped out A-Little!!!
MONEY!!!
PS. Trying going to www.propertybuyingtours.com . I have’t gone on one of their tours yet, but you will get alittle insite on what pre-construction is all about!!!
this is not true investing. its called speculation [ or gambling]
you need to make sure you understand real estate cycles so you know precisely when to buy and when to get out. if you’re house is ready at the top of the market you could be left holding it. also if the area is over built, the builders will discount their houses and leave you upside down.
All pre-construction is a gamble. BUT… if you do it right and know what your doing before you do it! its a great gamble!!! Investment or gamble, whatever you want to call it!!!
and make the com. on it. typically half. Just be for warned. Builders don’t like Investors purchasing their properties up. They feel they are getting screwed in the long run. But if you can keep a low key and try not to flaunt yourself as an investor at closing with the builder, you should be alright!!!