The idea of ??investment pre-construction when it comes to real estate is actually quite clever way that many have made millions. The theory is simple, really. Investing in a property before, when it is in the planning phase. Those who want to build these buildings need money and investors to obtain the construction of the road. By investing (in many cases essentially buying call options) in the condo units usually in high demand areas, before floor is broken investors often have the option of investing for pennies on the dollar expected when the building is completed and may re sell the property to the total market value once construction is completed pocketing the difference of the initial investment and the asking price.
It?s a win-win situation for many builders or ?owners? of the property in question as ?pre-sale? units allows loan officers to have confidence in the viability of the project as a source of money by selling many units of the invisible. The advantage for investors is that they are able to purchase at a price much lower than pre-construction as a result and can then sell to total market value (or above a high demand and saturated areas of real estate) .
This investment style is not as glamorous as some flipping houses. There is beauty in the beast restructuring. E ?, however, some things that should be kept in mind when doing this type of operation.
Source: http://www.updatersarea3.com/pre-construction-real-estate-investing.html
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