Newbies Need Info
My wife and I want to start investing in New home Construction flipping in the Quakertown, PA area. It looks to be an up and coming area. I bought a couple of books on flipping but they don't seem to dicuss New Construction. Does anyone have a lot of experience in this? Where could I go to find out more information? My Mom is a Real Estate agent and she's helping me with this. Do I really need to use and agent? We have the Capital and great credit. Is this the way to go? Any help would be appreciated.
When I first started out in REI, I wanted to invest in a home in a new construction subdivision that our oldest kids bought a home in. I made the mistake of being truthful and telling the agent at the model homes that I was a real estate investor. I might as well have told her I was satan by her reaction to the statement. She said the builder would definitely not deal with any investors and there criteria was that the buyer live in the property for a minimum of one year.
Later I discovered that I should not have offered this much info to her. I found that most builders have this requirement in my area as they don't want "for sale" or "for rent" signs all over the project while they are trying to sell their other phases. I no that several investors purchased in that subdivision as there were these signs up about four to six months after I looked at the properties.
I've since learned to "fly under the radar" .
Dave
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Rule #1 - Keep a poker face when visiting with the builder on new construction. They ask so many qualifying questions in order to make money on the UPGRADES!
"I have heard GREAT things about this new area and believe the builder will give me a fair price for a quality product. I always tell my friends and others when I have a bad experience. "
Rule #2 - Work on rule #1 even though you negotiate the best deal.
Eric & Rosa
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I had a house built for a family member to rent from me in December 2003. The builder knew exactly what I was doing and didn't have a problem with it. We kept the upgrades to a minimum and planned on adding value by building decks and completing the walkout basement on our own. Personally, unless I was doing this again, I wouldn't use new construction as a flipping vehicle unless I could act as the general contractor. In our area I just don't see anyway to make any money on it in the short term. That's around me anyway.
I agree that spec homes and pre-construction/new construction will work best in fast appreciating areas.
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