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How To Buy Preconstruction Homes

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Pre-construction homes are becoming more and more popular among real estate investors. Pre-construction homes allow buyers to own a home or condo which they can live in or rent out for revenue. Over the past several years, preconstruction homes became all the rage in many states including Florida, California, and Arizona.  Even though many of these markets have softened, keep in mind that there are almost always good opportunities if you know where to look.  Also keep in mind that pre-construction homes can be sold at a profit, with the profit then re-invested in further real estate endeavors.  This cascading effect can have large, positive impacts on your financial future.

The concept of pre-construction homes is a simple one: you, as the investor, contract a builder to build a home for you. Another way of looking at this is considering yourself to be the speculative buyer. Construction time for preconstruction homes will vary, taking anywhere between 3 months to two years to complete. At the end of the construction phase for pre-construction homes you will be ready to either sell the home to an end user or purchase it for longer term rentals..

Pre-construction homes are an affordable way for you to work your way into the real estate niche; especially when you can purchase with the group buying power generated by groups like  Affordable housing is often hard to find, however developers that offer pre-construction homes are making it easier for average income investors to own property.

The biggest advantage of pre-construction homes is that you buy into a new home development before construction begins and this means that you can often get a better price for your home. The reason for the lower home price for pre-construction homes is that developers usually need to have pre-sales of some of the units in the development before they are able to borrow money to start construction.

Preconstruction homes can be a great way to get you in on the bottom floor of real estate investing. If purchased in the right area at the right price, the real estate value of pre-construction homes will usually increase. This means that pre-construction homes are often worth more than you paid for them the minute you move in or chose to rent out. 

The process of building pre-construction homes is simple, easy, and efficient. The first thing that you need to do is meet with the developer so that you understand all the legalities of preconstruction homes. Be sure to review the contract carefully and ask the questions you need to fully understand what is expected of both you and the developer in the construction of your pre-construction home. Always remember that it's important to learn as much as you can about the developer before you commit to buying a preconstruction home.

If you are doing this alone, the pre-construction home will require several meetings between you and the developer over the course of construction. Budgets and building expectations of your pre-construction home need to be discussed so that you and the developer don't run into construction nightmares further down the line.  If you are doing this through a group like, then much of this work is taken care of for you.

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