Tuesday, March 20, 2007
INvesting in Second Homes
Pre-construction real estate investing has been a staple in the condominium and townhome markets for decades. The process is quite simple and is outlined below:
1. A developer secures a piece of property, and creates plans, renderings, and additional collaterals representative of the proposed development.
2. Working through licensed real estate brokers, the development is offered to the public on a pre-construction basis; that is, the buyer is offered an option to “reserve” a specific unit in the proposed development.
3. Upon reaching a preset level of buyer reservations, the builder is able to secure project financing and commence construction. At this juncture the reservations are converted to sales contracts. Twenty-four (24) months later the development is complete and the real estate closing cycle takes place culminating in the buyer’s ownership and possession of the unit.
ResortConnection/GO Zone Special Event
Don't miss this fantastic opportunity to hear about GO Zone qualified investment...
Special Incentives Available to Resort Connection Customers
The following incentives will apply to all customers affiliated with Resort Con...
Second-home sales at all-time high
NEW YORK (CNNMoney.com) - Are homes still a good buy? Americans seem to think so...
The rule of "72" is a simple but very powerful financial principle. If you take the number 72, and divide it by a rate of return, the answer that you get is the number of years that it takes for your money to DOUBLE.
For Example:
72 divided by a 6% rate of return = 12 years (money doubles
72 divided by a 12% rate of return = 6 years (money doubles)
72 divided by a 15% rate of return = 4.8 years (money doubles)
At the 15% rate of return using the rule of "72", $300,000.00 becomes $600,000.00 in 4.8 years, and becomes $1,200,000.00 in 9.6 years!!
You might say ... what if I only average a 10% rate of return? Well, would it be worth waiting 4.8 years longer to reach the $1.2 million? Think about it!
Let’s look at another financial principle know as leveraging. Let’s say you invested a 10% down payment to purchase the above-referenced example $300,000.00 investment. You have taken a $30,000.00 investment and leveraged your money 10 times!
Combine these two financial principles and invest in pre-construction real estate, and you’ll produce a winning combination of financial growth not seen in any other type of investing. Your rate of return is on the $300,000.00 - not just the $30,000.00 you initially invested.
Why buy pre-construction properties? . . . . . . Because developers offer discounts and incentives! After your initial down payment you may realize appreciation for 2-3 years with no additional out-of-pocket expense.
Developers offer incentive pricing during the pre-construction phase to raise capital to secure construction loan financing.
Prices are also discounted to provide incentives to buyers to purchase something they cannot yet see.
After your initial investment, there are no further expenses until completion of the project.
In some instances, you may sell your contract prior to closing at a significantly higher price.
Smart buyers have learned that pre-construction purchases can be excellent investments when:
* Investing in resort properties near oceans, lakes or mountains
* Demographics are favorable
* Investing in on the ground floor of the project
* Timing is right ¶ 9:37 PM
1. A developer secures a piece of property, and creates plans, renderings, and additional collaterals representative of the proposed development.
2. Working through licensed real estate brokers, the development is offered to the public on a pre-construction basis; that is, the buyer is offered an option to “reserve” a specific unit in the proposed development.
3. Upon reaching a preset level of buyer reservations, the builder is able to secure project financing and commence construction. At this juncture the reservations are converted to sales contracts. Twenty-four (24) months later the development is complete and the real estate closing cycle takes place culminating in the buyer’s ownership and possession of the unit.
ResortConnection/GO Zone Special Event
Don't miss this fantastic opportunity to hear about GO Zone qualified investment...
Special Incentives Available to Resort Connection Customers
The following incentives will apply to all customers affiliated with Resort Con...
Second-home sales at all-time high
NEW YORK (CNNMoney.com) - Are homes still a good buy? Americans seem to think so...
The rule of "72" is a simple but very powerful financial principle. If you take the number 72, and divide it by a rate of return, the answer that you get is the number of years that it takes for your money to DOUBLE.
For Example:
72 divided by a 6% rate of return = 12 years (money doubles
72 divided by a 12% rate of return = 6 years (money doubles)
72 divided by a 15% rate of return = 4.8 years (money doubles)
At the 15% rate of return using the rule of "72", $300,000.00 becomes $600,000.00 in 4.8 years, and becomes $1,200,000.00 in 9.6 years!!
You might say ... what if I only average a 10% rate of return? Well, would it be worth waiting 4.8 years longer to reach the $1.2 million? Think about it!
Let’s look at another financial principle know as leveraging. Let’s say you invested a 10% down payment to purchase the above-referenced example $300,000.00 investment. You have taken a $30,000.00 investment and leveraged your money 10 times!
Combine these two financial principles and invest in pre-construction real estate, and you’ll produce a winning combination of financial growth not seen in any other type of investing. Your rate of return is on the $300,000.00 - not just the $30,000.00 you initially invested.
Why buy pre-construction properties? . . . . . . Because developers offer discounts and incentives! After your initial down payment you may realize appreciation for 2-3 years with no additional out-of-pocket expense.
Developers offer incentive pricing during the pre-construction phase to raise capital to secure construction loan financing.
Prices are also discounted to provide incentives to buyers to purchase something they cannot yet see.
After your initial investment, there are no further expenses until completion of the project.
In some instances, you may sell your contract prior to closing at a significantly higher price.
Smart buyers have learned that pre-construction purchases can be excellent investments when:
* Investing in resort properties near oceans, lakes or mountains
* Demographics are favorable
* Investing in on the ground floor of the project
* Timing is right ¶ 9:37 PM
