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Hi there
Just wondering what others thought about buying pre construction unit for resale?
Just wondering what others thought about buying pre construction unit for resale?
Pre-built construction
- Thread starter muskokalandlord
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You should read Don Campbells books
Or if too time consuming do a search for this topic discussed every few weeks at length for the last few years
Or if too time consuming do a search for this topic discussed every few weeks at length for the last few years
It can be good if you find a desperate seller who can qualify for a mortgage and drop his asking price. Its all about which angle you are coming from. Even better if you actually plan on moving into it.
QUOTE (JoeRagona @ Feb 20 2010, 10:06 AM) I`ll add to Adams post -
Bad.
QUOTE (JoeRagona @ Feb 20 2010, 10:06 AM) I`ll add to Adams post -
Bad.
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You`ve added clarity that my original post might have lacked.
Thank you.
QUOTE (JoeRagona @ Feb 20 2010, 01:06 PM) I`ll add to Adams post -
Bad.
Thank you.
QUOTE (JoeRagona @ Feb 20 2010, 01:06 PM) I`ll add to Adams post -
Bad.
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QUOTE (muskokalandlord @ Feb 19 2010, 11:56 PM) Hi there
Just wondering what others thought about buying pre construction unit for resale?
in the right market that may make sense .. if the spread is wide enough.
Consider that it is harder to finance and can back-fire if re-sale market tanks or the envisioned gap is lower.
Also consider holding costs between taking possession and selling: taxes, condo fees, mortgage interest .. plus sales cost i.e. marketing + realtor fees
The risk / reward has to be adequate.
If you can buy "pre-sale" for $300,000 and the market allows $400,000 then even after those fees it may make sense.
Highly speculative .. high risk .. but worth it in the right circumstances.
Also consider that most developers will not only keep your deposit if you don`t close but also might sue you for damages if the re-sale market is weaker than expected.
What specific market and specific price point do you have in mind ?? .. as most strategies work "in principle" but fail "on specifics" !
Just wondering what others thought about buying pre construction unit for resale?
in the right market that may make sense .. if the spread is wide enough.
Consider that it is harder to finance and can back-fire if re-sale market tanks or the envisioned gap is lower.
Also consider holding costs between taking possession and selling: taxes, condo fees, mortgage interest .. plus sales cost i.e. marketing + realtor fees
The risk / reward has to be adequate.
If you can buy "pre-sale" for $300,000 and the market allows $400,000 then even after those fees it may make sense.
Highly speculative .. high risk .. but worth it in the right circumstances.
Also consider that most developers will not only keep your deposit if you don`t close but also might sue you for damages if the re-sale market is weaker than expected.
What specific market and specific price point do you have in mind ?? .. as most strategies work "in principle" but fail "on specifics" !
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It will under the $200,000.00 mark for my area there aren`t many condo`s here the one that is being constructed is the 3rd of 5
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QUOTE (muskokalandlord @ Feb 22 2010, 09:08 PM) It will under the $200,000.00 mark for my area there aren`t many condo`s here the one that is being constructed is the 3rd of 5
what`s your going-in price ? What is market ? spread needs to be 40K or more I`d reckon for a 200K condo !
"my area" is where ?
what`s your going-in price ? What is market ? spread needs to be 40K or more I`d reckon for a 200K condo !
"my area" is where ?
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QUOTE (ThomasBeyer @ Feb 22 2010, 02:09 PM) in the right market that may make sense .. if the spread is wide enough.
Consider that it is harder to finance and can back-fire if re-sale market tanks or the envisioned gap is lower.
Also consider holding costs between taking possession and selling: taxes, condo fees, mortgage interest .. plus sales cost i.e. marketing + realtor fees
The risk / reward has to be adequate.
If you can buy "pre-sale" for $300,000 and the market allows $400,000 then even after those fees it may make sense.
Highly speculative .. high risk .. but worth it in the right circumstances.
Also consider that most developers will not only keep your deposit if you don`t close but also might sue you for damages if the re-sale market is weaker than expected.
What specific market and specific price point do you have in mind ?? .. as most strategies work "in principle" but fail "on specifics" !
Also builder contracts are heavily weighted in their favour. You can pay up to 8% in closing costs that would erode all your equity Bob Aaron, a lawyer in toronto, wrote a column that a developer put in their contract that the had the right to collect money on fictitious fees
see here
Consider that it is harder to finance and can back-fire if re-sale market tanks or the envisioned gap is lower.
Also consider holding costs between taking possession and selling: taxes, condo fees, mortgage interest .. plus sales cost i.e. marketing + realtor fees
The risk / reward has to be adequate.
If you can buy "pre-sale" for $300,000 and the market allows $400,000 then even after those fees it may make sense.
Highly speculative .. high risk .. but worth it in the right circumstances.
Also consider that most developers will not only keep your deposit if you don`t close but also might sue you for damages if the re-sale market is weaker than expected.
What specific market and specific price point do you have in mind ?? .. as most strategies work "in principle" but fail "on specifics" !
Also builder contracts are heavily weighted in their favour. You can pay up to 8% in closing costs that would erode all your equity Bob Aaron, a lawyer in toronto, wrote a column that a developer put in their contract that the had the right to collect money on fictitious fees
see here
Two answer threads here.
So the question is why? Your personal situation MAY suggest there is a reason, including sufficient wealth and income, to do this (tax sheltering perhaps, or you want to live there but will be paid to live outside the area and just until it is finished) or portfolio to put it in. If so you should have the experience and/or advisors to better answer the question for you, because it is not about incrementing your income or wealth.
If you aren`t in that boat then I would jump clearing into the nay team`s.
From the sounds of it, the property is in cottage country. Whole different set of dynamics going on there, and a lot of it actually based on Toronto. Small markets with little room for error. I know there are income properties in most of the larger towns, why not investigate these more thoroughly, or place your money in a stronger locale.
So the question is why? Your personal situation MAY suggest there is a reason, including sufficient wealth and income, to do this (tax sheltering perhaps, or you want to live there but will be paid to live outside the area and just until it is finished) or portfolio to put it in. If so you should have the experience and/or advisors to better answer the question for you, because it is not about incrementing your income or wealth.
If you aren`t in that boat then I would jump clearing into the nay team`s.
From the sounds of it, the property is in cottage country. Whole different set of dynamics going on there, and a lot of it actually based on Toronto. Small markets with little room for error. I know there are income properties in most of the larger towns, why not investigate these more thoroughly, or place your money in a stronger locale.