Buying Pre-Construction

It seems that everyone is purchasing a new condo from the builder, pre construction, and making tons of dough on that purchase, doesn't it? Truth be told, yes, many people have made a very good return on their investment by purchasing a brand new condo from the builder and then selling it. However, to assume that it's a guarantee and a no-brainer would be wrong. Here's what you should know, and what you should watch out for.

The first opportunity to purchase in a brand new building, for the general public, comes at the broker's release. It's important to understand what the builder is after. The builder wants to generate as much cash flow as possible, as quickly as possible, with as little effort as possible, as is good business sense. The best way to do this, rather than market to the general public directly, is to market through brokers (real estate agents) who can than act as the middleman between builder and buyer. The broker will spend their time, their energy, and their efforts, in return for a fee from the builder, of course, and will then sell to their friends/investors/clients.

Builders are not in the business of penny-pinching, they are in the business of making money as quickly and efficiently as possible. They release through brokers because it is the fastest way for them to sell out their development, and it works. The past three releases I've been to have sold out within hours of the doors opening. This means that not only is the broker's release the first opportunity to buy, but when the release is as good as you want it to be, it's the only opportunity.

Some incentives offered by the builder can include prices that are literally thousands of dollars lower than what they will be a week later. Other incentives can include any combination of included parking, free locker, free assignment (allowing you to ‘flip' your unit before it closes), free appliances, and so on.

The point being made is that if you are planning on delving into this business of buying a new unit and then selling it, you're best-sometimes only-opportunity to purchase is at the broker's release, and you should do your homework to get in to a position where you can give yourself that opportunity. Work with a realtor that is educated and aware of new projects in the area of interest. This is how you would be notified of broker VIP release events.

Buying from the builder and selling resale can be a very fine investment, but no investment is so fine that it can be done with a blind eye. Please feel free to contact me for more information on all new projects.

Contact us today to discuss your real estate goals and buying pre-construction.