Frequently Asked Questions About Preconstruction Investment Homes
PLEASE NOTE: THIS FAQ SECTION IS FOR INVESTMENT HOMES ONLY. FOR INFORMATION ON PRECONSTRUCTION CONDOS, PLEASE CONTACT US BY CLICKING HERE.
How much out-of-pocket money will this entire preconstruction investment require?
Your total cash investment is $5000 per property and is broken down as follows:
Lot deposit: $500.00
Building deposit: $1,000.0
Land survey: $225.00
You will write your final down payment check for $3,500.00 at closing in 30-45 business days.
Will I have to make any payments during the construction period?
No. Construction interest is allotted within the loan amount so no monthly payments will be necessary during the construction period unless that allotted amount is exceeded. In most cases, the homes is finished ahead of schedule resulting in a surplus available enabling you to bring less money to closing.
I have seen other opportunities that offer a similar program but keep half my equity, do you do keep half my equity as well.
No. We are compensated by writing the loan and executing the real estate transaction. You the client get to keep all the profit generated from the sale of your property.
How are you able to pass on such an incredible price on the construction of these homes?
For starters we are able to negotiate such a low construction price per square foot with the builders by the amount of homes our investors like you buy from them. The average homebuilder has to house and staff sales agents, advertise, and have models to show. We allow the builders to concentrate on building homes solely while we sell and market them to you the investor saving him the money it would cost to do it themselves. By creating this relationship with the builders we are able pass on a low build price for these preconstruction homes.
How many preconstruction homes can I buy?
That depends on several factors including your credit and the number of lenders we are working with at any given time. Basically, almost everyone qualifies to build at least one property. If a borrower meets all of the Lender's requirements they can qualify for as many as 7 preconstruction homes. You can also invest with a partner in order to do more than you could do on your own.
Why Should I invest my money in Florida preconstruction?
Florida has some of the best real estate markets in the country, appreciating at rates of 20% to 35% per year or more. Florida has 14 of the 100 fastest growing counties in the United States, more than any other state, according to a study released by the U.S. Census Bureau. This makes Florida the number one preconstruction real estate investment opportunity in the country.
How long has this preconstruction program been going on?
This program has been in existence since 2001.
What if I have bad credit or don't qualify?
Most people qualify with our special construction loans. However, if you don't qualify because of a difficult situation, then you could simply partner up with someone who does qualify and split your profits with them.
When do they break ground?
As soon as you close on your loan... 45-60 calendar days from application approval permitting starts for construction.
How big are the projects / lots available?
Several different sized lots in each area which have several different prices...$25k-65k all vary in size from 1/8 acre to 1 acre.
What is the exact location?
That will be determined once you choose an area as you may like one area over another. Our builders construct in several different areas of each County.
When are we able to sell the property?
It can be sold at anytime. Generally an investor will sell the property once completed.
Will this be a standard construction in regards to Carpeting, Tile, and Appliances etc?
Approximately when would the property be available to us?
Once the home is completed and CO (certificate of occupancy) has been issued.
Any obvious or hidden penalties?
If you sell before completed there is a 1.5% pre-payment penalty. I would estimate that at $3k to $5k depending on loan amount.
What are the comparables in the area recently?
Between 10-15% in equity at current market prices. Please note: When buying preconstruction, you are able to benefit from the time it takes for construction to be completed which adds another 5% - 15% for a total of 15% - 30% when you take possession of the home.
This sounds too good to be true, is it?
This does sound too good to be true. In addition to bringing together all the necessary pieces to make this real estate investment program work, all the right conditions exist in these areas to make this one the best investment opportunities you will find anywhere in the country. We are constantly looking in new areas for new real estate investment opportunities to bring to our real estate investors.
What if I want to rent my home?
We can refer management companies in each of the specific areas we are building in. They will fully manage your property for a very minimal fee.
Which area in Florida is right for me?
Depending on your personal investment strategy, we will work with you to find the best suitable preconstruction real estate area for your investment property needs.
How long will it take to build my home?
Each area we build has a different build time. Generally anywhere from 8-12 months, but please ask your real estate builder representative to explain build time/s for your investment property area/s.
When do we close on the property?
Typically, closing is held 45 to 60 calendar days from the time a lot is placed under contract.
Do I need insurance on this real estate investment property?
No. The builders carry a risk policy throughout the course of construction.
Do we own the house and the lot while it is under construction?
You will own the lot after the construction loan has closed, but the house is owned by the builder until the Certificate of Occupancy is issued from the municipality governing the construction.
Do you provide full service real estate investment and mortgage loans?
Yes. We can help you buy or sell a home as well as achieve the best financing for it. If you have an outside project you are interested in we can facilitate the financing and real estate contracts as well.
Which model home should I choose?
Depending on the surrounding area of the lot, we will work with the client to choose the right model for that particular site. We understand your needs as a real estate investor as we are preconstruction real estate investors ourselves.
How do we know what we will earn as a profit?
As with any investment there is no clear cut way to specify what one may earn from his/her investment. As these are speculative homes it is hard to give someone an exact figure. You can be assured that we have done our research and studied the areas we are currently offering and are always looking for new areas throughout Florida and/or the entire country.
There are other programs similar to yours that require more money down. Why is your program less and is it different?
The other programs that require more money are pocketing the difference between the $5000 and their cost. 90% of the other programs in the same areas are being run through us and you the client are paying the difference to them.
When my home is completed am I responsible to pay back the construction interest payments?
No. The loan amount includes all construction interest payments including all closing costs. Once the client sells the completed property they are only responsible for paying off the original loan amount.
So once I have closed on my preconstruction real estate and it is completed, will I have to bring funds to closing?
No. Once your investment property is completed you will not be required to bring funds for another closing. If you have elected to keep your property the lender will modify your loan to a permanent loan at a low cost to the borrower.
Do you provide any other real estate investment opportunities?
Yes. We strive to provide our clients with quality real estate investment opportunities in all aspects of preconstruction. Please visit our sister site New Condo Realty or ask your representative about information on other great preconstruction opportunities.
How do I get started?
Simply click on the "Quick Start Form" link and fill out the applicable information. Be sure to click submit form at the bottom of the page.