y this point and time, some of these resells in the
many people have heard area, we are seeing close to a
about buying $100/sqft reductions in price to
preconstruction condos and some around $500 per square foot; and
of the amazing profits that have that is asking price. Now is when
been generated by these the negotiations begin.
investments. What many people
don't understand is that there is One strategy is to AGRESSIVELY
another way to play the pursue projects where other
preconstruction investing game, investors are about to close. In
especially for those investors this case, you have a number of
with solid financial resources. original investors that are
Let's take a look at the Miami hearing that loud clock ticking
condo market as a great example. in their head. that is the clock
counting down to close where they
Right now, there is a Miami condo will 1) have to close on their
that originally sold out almost 2 Miami condo, 2) have to pay debt
years ago when the prices were service, and 3) potentially try
much lower but original investors to rent out their Miami condo.
are now interested in reselling You have to realize that these
their units. This project was one sellers are people that have
of the first high-rise projects already made (on paper) great
in the downtown Miami area. returns, then they may have a lot
Recently, similar units at ICON of motivation to just get most of
Brickell (on the opposite side of their profits and run without
the Miami river) sold out the incurring additional expenses.
first tower in 2 days at an
average of $550 a square foot. As an example, suppose you were
The second tower is now selling able to negotiate a $130/sqft
at an average of $600 sq ft. For discount on such a Miami condo
instead of only $100/sqft. Let's than what people across the river
say that results in an additional are paying for new Miami condos.
$30,000 savings on a 1,000 sqft If you do this type of
unit. From a motivated seller's investment, you need to establish
perspective, what do they care if the actual numbers for yourself
they have to drop their profit since these numbers are only
from $150,000 on a Miami condo to provided as an example.
only $120,000. For the right kind
of seller, the important thing is We have used a Miami condo as an
that if they know you, as the example here but these
buyer, can make it painless for opportunities are going to exist
them with no additional cash in many places. As projects begin
outlays. to close, especially in overbuilt
areas having lots of investors
For a resell type investor, they that are ill prepared to close,
may look at this and say well, I that provides an excellent
will rent the Miami condo out for opportunity to find EXTREMELY
a couple of years. No, their motivated sellers. One trick to
payments will not cover their this, in my opinion, is to find
mortgage and maybe they end up those early projects in an area
losing $800 per month. That is that are about to close since
only $19,200 over the course of there is tons of equity that the
two years. Compared to that seller can give up to the new
$30,000 extra discount they got, investor if that new investor
that is a small price to pay for will just pay them some profit
the right individual knowing that and not make them incur any
they purchased their condo at additional expenses.
$130 *1000 sqft = $130,000 less
About the Author:
Dr. Chris Anderson is a co-founder of http://www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Download his free, 30+ page preconstruction investing ebook today at http://www.GetPreconstructionDeals.com/ebook.html
Source: www.isnare.com
