Real Estate Reference Dramatic Profits From Preconstruction Real Estate Investing
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  by Chris Anderson, PhD

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  The preconstruction process is an innovative real estate investment opportunity in which you buy tomorrow's property at today's price. Preconstruction investing is a boon for the investor or buyer as well as the developer or builder. The biggest advantage of preconstruction process is that you can reserve your buy at discounted prices without investing a fortune. You simply have to make a small investment that is as low as 5% of the total cost to reserve a unit and pay the balance on achievement of different milestones.

For the buyer, preconstruction process provides an opportunity to seal a property deal with little margin money and achieve sizable discounts over the tentative price of the finished condos. For the developer it is an opportunity to presale the entire property even without laying a single brick and to procure a construction lending with relative ease.

In the the preconstruction process, property developers place the building plans of a proposed real estate venture for pre-selling. Only thing made available to the buyer are architectural rendering and floor plans of the condominium, town house, or single family residence. The good news is that preconstruction prices are normally at an attractive discount of the proposed sale price of complete units.

In theory, the buyer gets the discount because they displays the grit and tenacity to invest on mere paper and "air". However, in reality, they are getting discounts because the are a crucial piece of the puzzle for the developer because pre-selling of a particular percentage of the total units is a need for getting a prospective lender to fund the construction process.
 
     
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