Hi All,

I'm curious to know if anyone here is investor who invests in Pre-Construction Real Estate. I heard it is very rewarding and not much hassle of tenants. Please, share your experience and guide me as I might be investing in this niche.

Thanks!

I've heard alot about it... seems pretty profitable

Great and safe way to invest but you may run into a snag with builders. Many builders will no longer sell to an investor because of compitition and the possibility of degrading the neighborhood with rentals! One way around this would be to live in the property for a year and get around the clause in the sales contract!

New condo construction or conversions are a common venue to invest in. Developers will gain better interest on construction loans if they can reach a certain pre-construction solds by discounting the prices on units.

Seeing Sacramento mentioned in another post about this topic... Most builders in Sacramento have strict rules about sellign to investors. Basically, they don't, won't and shall not do it. This comes from a couple of very good clients of mine who are Representatives for Beazer and Tim Lewis homes. Get caught as an investor on new construction in the area and you will forfeit all your rental income, appreciation upon sale in the first year. Fully enforceable in your purchase contract. And yes, they do monitor and investigate.

We have a couple of huge developments coming in, approximately 20 year planned build. Approximately 20,000 units in all. The rule of thumb is "if you want to invest in these areas, look for someone reselling soon after they bought new construction but don't buy if you're not going to occupy."

I have specialized in new construction investing for several years. Some builders won't sell to investors, but lots here will. In fact our 3 most reputable builders all sell to investors. The sales people know this is my niche and they keep me updated. My investors get in phase one filing one in certain areas of town. They have made great profits. I just got a contract on one yesterday. The owners bought it through me 2 1/2 years ago for $163,000. It is now under contract for $219,900. This is very typical. I hate to mess with rehabs or foreclosures- this is the way to go. If you have a client that really doesn't want any hassle- try doing model lease backs with builders.