Pre-Construction Investing ??
I am new to real estate investing. I wanted to start out investing safely. I was thinking about investing in Pre-coonstruction single family homes. Has anyone ever done this? What are the do's and don'ts of Pre-Construction investing? What are the pro's and cons? Any financing tips when buying pre-construction? Any advice would be greatly appreciated. Thank you,
juncito 
I have not done it, but I know people who do. I believe you must be in a fast apreciating market for this to work. You also need to be with a reputable builder and be the first to get in. Not the pre-construciton when it is already advertised in the newspaper. The first in that they presell to some selected people on their mailing lists.
Nothing is fool proof. If your builder goes belly up, if the market cools, if your area is over developed, these are all risks.
It is great in an upswing. Hell when the bottom falls out.
I did one with a very good builder a few years ago. I bought one of his houses he was building 60 at the start. Like most builders he was running short as he finished up permits land cost and all the Subdividing Fees and expenses. So I bought one. Put $5,000 down and thank god recorded onto the single lot and property.
Well he blew it half way thru framing. I grabbed the framers and they finished me out and I paid them. Well the long and short of it was that I ended up with an Airstream 18 footer in the driveway. Living in it and working night and day. I delt with the Construction loan and they actualy released funds to me as I completed each little part. The Sewer Hook Up was a gigantic problem. Seems he had not paid.
Any how I completed up made a couple of changes. Hate fake shutters. Insist that water heater be outside in its own little steel house. When they go boom in the night it is much better if they are outside. Dry walled the garage etc. etc. So I turfed and sprinkled the front, changed to a really distinctive Red front door. etc. etc. Put a big sign in front.
"This house hand finished by a lover of good architecture and even better all copper plumbing. Every joint hand wiped by someone who really cared." I had a cartoon drawing of a plumber bending over, exposed crack and all with a little cloth wiping off the plumbing. Took a week to sell it. Had a little folding table in the garage. Played Ranchero music really loud and a cooler of beer.
People laughed thought I was a stark raving lunatic. No bargaining just sold it.
The rest of the tract was finished up some six months latter and they shorted it all the way. very sad.
It was a lot of fun. The first day I had a very buxom blondy lady on rollerskates handing out flyers up at the corner. Lots of honking horns cause she was a little short in the clothes, long in the leg.
It was a lot of fun. All the papers described it in great detail. No pictures of me just the girl. She went on to become a minor movie star. Just think her start selling real estate in Calif. on rollarskates. Only in LaLa land.
Lucius Still laughing.
bgrossnickle
I fully understand where you're coming from. The builders that I am planning on buying from are Lennar and Engle Homes, two very well known builders. The area I will be purchasing in is Orlando, or Volusia County, Florida. I understand from Kiplinger's Personal Finance that Orlando is expected to have a 72% appreciation rate from now until 2010. I have heard some horror stories but I am relying on these builders' reputation to have a succesful outcome. Any feedback qould be appreciated. thanks
I hear that the communities closer to the coast - Melbourne, Titusville, Daytona, etc will have even higher appreciation. Orlando has had a good run of appreciation. These coastal cities are just starting their run.