I have heard a lot on investing in homes and/or residential condos before they are built (i.e when they are still in the marketing phase). After the project is completed(in a year time), one is supposed to sell it to make a profit due to the appreciated value of the property.
I am absolutely novice in any king of real estate investing, therefore, looking for some help with regards to the following:
Is this a viable invesment option?
If yes ,then what to look for in such kind of project and what are the
potential problems one could face by such kind of invesment.
This worked in markets that were experiencing high appreciation. For me, this is a huge gamble because if the market turns, as it did in phoenix and some other cities, you are screwed.
Why invest and wait a year to make a profit when you can buy today and sell in a month and two yet make the same profit?
Of course this strategy works. Its called pre-construction. I know a couple of people who have done well, and others who have lost alot doing it.
A hot area for pre-construction is Florida - Cape Coral, Ft. Meyers and other high appreciating areas.
I know some who were in before the market slowed down. Others I know where in the middle of the construction and are now trying to sell the homes with the market slowdown and its not looking to well.
Pre-construction can be a huge payday but whenever there is big money involved there can be risks.
Sorry I cant help you anymore than this because I have not gone through with it myself.
Just becareful what you are investing in.
If I could advise you with anything it would be not to start investing in pre-construction if you know nothing about real estate. Start somewhere as a bird dog or wholesaler to learn the ins and out first. Learn how to study and understand a market before you invest alot of your money into it.