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  Preconstruction Investments




 A preconstruction investment is typically buying a condominium before it is even built. There are some risks involved but with the proper research of the construction company and consultation with your attorney, this type of venture can be highly profitable.






Below is a typical Pre Construction Scenario:
 
3 price levels of purchasing

LEVEL 1:  (NOT ADVERTISED) only available through real estate agent contact.
LEVEL 2:  (usually 5-10% higher) ADVERTISED.           
LEVEL 3:  Public Opening (usually another 5-10% higher) ADVERTISED
 
Deposits required:

$15,000 or $25,000 to be ready to buy on opening day
Balance of first 10% deposit due 15-45 calendar days thereafter
Additional 10% deposit due:
3-6 months thereafter or Upon groundbreaking

Typical Timeline

Opening Day:                Choose Unit and first deposit
15 days:                       Balance of 10% due
3-6 months                   Additional 10% due
6 months                      Ability to Resell
9 months                      Resell unit and receive deposit back
24 months                     Closing and receive profit
 


To be ready to buy:

Check
Required 1 week before opening:
$15,000 to $20,000 for 1 bedroom,
$25,000 fto $30,000 for 2,3 bedrooms
Letter of intent and select
Price range
Style of unit desired
Approx floor height
 

Opening Date

The pricing is released on opening day.
Your agent will call you with the units most closely matching your choice.
If you accept, the check gets deposited
If you do not like the unit:
Your agent holds onto your check and it does not get deposited.
Your agent will wait for another unit to become available.
Sometimes availabilities will open from cancellations.

A fax signature will be required within 24 hours.
Originals will be overnighted upon receipt of fax signature with condo \documents showing all the rules and regulations.
You must overnight the contract back within 72 hours.
 

Procedures in the first 15 days

1.You will have 15 calendar days from the date you sign the contract to review the condo documents.

You may cancel the transaction at no cost or penalty within those 15 days by faxing directly to the developer.
If you cancel, you must provide to the developer:
Indication if you would like to consider another unit or get refund of check by notifing them in writting.
If refund, provide mailing address where check should be sent
It may take 15-30 days for your refund to be processed.
 

Procedures for Re-selling your unit

The contracts will say that you are not allowed to sell or assign your unit in any way without the developer’s permission
Once you have given the full 20% and the project is sold out (some projects in less than 30 days, 6 weeks, or 6 months), you will typically get a letter that states the developer is now allowing you to resell your unit.  The fee for reselling your unit is ¼ % of the price.
You may resell your unit:
On your own                                      0% fee
Through the developer                         6.0% fee

Once you have agreed with the buyer on price and terms:
the developer will release you from the contract
BUYER 2 will enter into a new contract with the developer.
Once BUYER 2 gives 20% deposits, you will receive your 20% deposit back minus the ¼ % fee.
You get your profit at closing minus any commissions paid above.
 

KNOW YOUR RIGHTS BEFORE YOU BUY CONDOS

Chapter 718 Florida Statute - establishes procedures for creating, selling and operating condominiums. The law requires that the developer give a disclosure statement to the buyer stating that the buyer may cancel the contract within 15 calendar days of signing the contract or of receipt by the buyer of the condominium documents, whichever is later.  A purchaser of an existing (resale) condominium unit has the right to cancel the contract within 3 business days after the date of the execution of the contract and receipt by the buyer of the condo documents.

Many preconstruction projects in our area sell out quickly as soon as the offering opens.

For free consultation and information on current preconstruction opportunities available, contact Barbara and Joe.


    
Barbara Humphrey
barbhumphrey2buy@bellsouth.net
 Barbara's cell 386.931.0535
Palm Coast Marketing of NY, Inc.
210 Old Kings Road South, Suite 600
Flagler Beach, FL 32136
       		   Palm Coast Marketing of NY, Inc. associate agent  
 
Joe Humphrey
Joe's cell 386.931.7466 
Palm Coast Marketing of NY, Inc.
210 Old Kings Road South, Suite 600
Flagler Beach, FL 32136

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