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Understanding Pre-Construction Investing
by Tony Seruga, Yolanda Seruga and Yolanda Bishop
One type of real estate investing that is growing in popularity at a very rapid pace is pre-construction investing. This market has a variety of unique advantages for investors that no other market has to offer. The unique advantages offered are actually what have made this market a very popular one. For those who are interested in going into pre-construction investing, it is first imperative that they understand a basic definition of what pre-construction investing is. Simply defined, pre-construction investing is investing in real estate or construction before it has actually be built at all. Pre-construction investing deals with investing done when there is nothing more to a piece of real estate than a piece of vacant land, and then later it is developed and constructed to become an excellent piece of real estate.
When a piece of property is in pre-construction state, an investor can come along and "lock-in" a low price on this piece of property that will be significantly lower than what it will be worth in the future. For every phase that happens to that piece of property, the value of the property will significantly increase. Not only is there the benefit of the increase in value and price as each phase of construction is completed, but an investor also has the benefit of being able to dive into a market that will be appreciating and will not have to worry about investing in a market that will soon be depreciating.
Another great benefit of investing in pre-construction real estate is that usually no payments are required while the property is under construction. Most of the time you will not even have to take out a mortgage for the property, so you will not be making payments while it is going through this stage. You will only be required to get a mortgage if you decide to keep the property once the construction on the property has been totally completed. The developer of the property is the one paying, so investors have no money to pay out during this phase, which makes pre-construction investing so attractive to many.
Since you have already obtained this property at a low price in the beginning and the construction phase has helped the property to appreciate even more, this guarantees you success at this type of investing. By the time the property has been completed the property has increased so much in value that the investor has a great deal of equity in the property that can be used. The investor is also left with a piece of land that will be very easy to sell since new construction is one of the fastest moving markets. This makes it very easy for the investor to profit from this pre-construction deal.
One thing that is important to remember if one decides to invest in pre-construction property is that it is best to try to do your investing in markets that are emerging. An emerging market is defined as a market that is in the verge of appreciating due to a variety of different factors in the real estate market. While pre-construction investing is almost always a great choice, it can be even more successful for investors if they make sure to do their investing in an emerging market, which will bring them even more profit in the long run.
If you are going to go into pre-construction investing, when trying to find a great property to invest in it is important that you are knowledgeable about the local market. Finding an emerging market is important, but many investors tend to confuse this with a market that is already hot. Investors should avoid pre-construction investing in a market that has already been on the hot list for months, because you have no guarantee when that market is going to run its' course and go cold. It is much better to stick to a market that is emerging if you want to guarantee profit. Before you make final decisions make sure that you get an accurate assessment of the market in that particular area. This can help you make the best decision on pre-construction and the best land properties to invest in.
Those who want to get involved in pre-construction investing need to realize that this type of property is never advertised. The most common way to learn about these types of properties available for investment is through various brokerage networks. As a general rule these properties are only offered by master brokerages and they are the ones that sell these pre-construction properties to the investors. If you are not a part of these types of networks, then you need to become a part as soon as possible if pre-construction investing is something you are interested in.
Some of the best places to look for pre-construction investing deals is in southern Florida. Cities like Miami, Orlando, Panama City, and Fort Lauderdale are all cities that seem to have a great deal of pre-construction opportunities that are becoming rapidly available. Usually it is hotel properties, condo properties, and townhouse properties that are the best choices in this type of investing because they tend to have the least risk and the greatest return associated with them. Investors that are interested in a market that offers great money making potential with relatively low risk should consider getting involved in the ever growing market of pre-construction investing.
About the Author
Tony Seruga, Yolanda Seruga and Yolanda Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.
by Tony Seruga, Yolanda Seruga and Yolanda Bishop
When a piece of property is in pre-construction state, an investor can come along and "lock-in" a low price on this piece of property that will be significantly lower than what it will be worth in the future. For every phase that happens to that piece of property, the value of the property will significantly increase. Not only is there the benefit of the increase in value and price as each phase of construction is completed, but an investor also has the benefit of being able to dive into a market that will be appreciating and will not have to worry about investing in a market that will soon be depreciating.
Another great benefit of investing in pre-construction real estate is that usually no payments are required while the property is under construction. Most of the time you will not even have to take out a mortgage for the property, so you will not be making payments while it is going through this stage. You will only be required to get a mortgage if you decide to keep the property once the construction on the property has been totally completed. The developer of the property is the one paying, so investors have no money to pay out during this phase, which makes pre-construction investing so attractive to many.
Since you have already obtained this property at a low price in the beginning and the construction phase has helped the property to appreciate even more, this guarantees you success at this type of investing. By the time the property has been completed the property has increased so much in value that the investor has a great deal of equity in the property that can be used. The investor is also left with a piece of land that will be very easy to sell since new construction is one of the fastest moving markets. This makes it very easy for the investor to profit from this pre-construction deal.
One thing that is important to remember if one decides to invest in pre-construction property is that it is best to try to do your investing in markets that are emerging. An emerging market is defined as a market that is in the verge of appreciating due to a variety of different factors in the real estate market. While pre-construction investing is almost always a great choice, it can be even more successful for investors if they make sure to do their investing in an emerging market, which will bring them even more profit in the long run.
If you are going to go into pre-construction investing, when trying to find a great property to invest in it is important that you are knowledgeable about the local market. Finding an emerging market is important, but many investors tend to confuse this with a market that is already hot. Investors should avoid pre-construction investing in a market that has already been on the hot list for months, because you have no guarantee when that market is going to run its' course and go cold. It is much better to stick to a market that is emerging if you want to guarantee profit. Before you make final decisions make sure that you get an accurate assessment of the market in that particular area. This can help you make the best decision on pre-construction and the best land properties to invest in.
Those who want to get involved in pre-construction investing need to realize that this type of property is never advertised. The most common way to learn about these types of properties available for investment is through various brokerage networks. As a general rule these properties are only offered by master brokerages and they are the ones that sell these pre-construction properties to the investors. If you are not a part of these types of networks, then you need to become a part as soon as possible if pre-construction investing is something you are interested in.
Some of the best places to look for pre-construction investing deals is in southern Florida. Cities like Miami, Orlando, Panama City, and Fort Lauderdale are all cities that seem to have a great deal of pre-construction opportunities that are becoming rapidly available. Usually it is hotel properties, condo properties, and townhouse properties that are the best choices in this type of investing because they tend to have the least risk and the greatest return associated with them. Investors that are interested in a market that offers great money making potential with relatively low risk should consider getting involved in the ever growing market of pre-construction investing.
About the Author
Tony Seruga, Yolanda Seruga and Yolanda Bishop of Maverick Real Estate Investments, Inc. work with builders, developers and other players in the commercial real estate industry to acquire and develop properties. They use progressive investment strategies that have proved extremely profitable. In addition to their own deals, they teach both seasoned and inexperienced investors how to be big players in the game. Visit the website for more info.
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