Does pre-construction investment equal money in the bank?

**Invest_Pre_Construction** · 04-06-2007, 10:14 AM

When I would play Monopoly (the fabulous board game) growing up, I had a strategy of complete ingenuity. I would buy every property I landed on until, inevitably, I would hit bankruptcy as fast as I had built my glorious empire. But my sister (always the top hat) did things differently.

[FONT=Arial][SIZE=3]Older and infinitely wiser than me, she would only buy certain properties. After she

**TJ2007** · 04-06-2007, 11:01 AM

Rule #1 - 'Make Your Money When You Buy, Not When You Sell'

Well obviously nice if you can get it on both ends. but at least if you're goin in with equity you have a little cushion...

**REbuyersgroup** · 04-07-2007, 10:01 AM

The pre-construction investment model has changed and if you are not involved with a bulk pre-construction investment group like ours, you are going to loose money.

The days of buy pre-construction, wait till it's done, close and sell are over.

Unless you have a solid exit strategy you are going to get creamed.

1. Our bulk investors ALWAYS get at least a 15% discount from the lowest price EVERY offered. We make the developer open his books and show us EVERY sale prior to ours if there are any.

2. The developer must immediately increase their day 1 pricing 6% which gives us a 21% spread. $400,000 day1 price, our contract price $340,000
New day1 price $424,000, spread $84,000

3. We always get a dollar for dollar discount if the builder ever has to sell for less than $424,000 our price is reduced equally. Example: Developer sells for $400,000 instead of $424,000, our contract price automatically is reduced $24,000 to $316,000

4. You only have to put up 10% deposit, not 20% like everyone else, and the developer cannot touch your deposit. You even get interest on your money.

5. Contract is assignable without restriction. Either we or the builder will re-contract to a second buyer who puts down 20%. When the second buyer puts up the deposit, you get your opriginal deposit back for another project, and wait for closing. On closing by the second buyer, is when the profits are disbursed.

Do the math. 10% desposit on $340,000 = $34,000 The spread is $84,000 what is the gross profit? To avoid SEC regulations I cannot tell you.

Our buyers rarely want to OWN the property, but you could if you wanted to. We do not deal in 1 or 2 units at a time. In order to get these terms, we contract for a substantial portion of a project.

That is how the NEW investors purchase pre-construction without the typical risks as an individual. That is why the teacher who re-financed their home to take equity out to buy a pre-construction condo in Miami is now bankrupt.

Work with people who know what they are doing!