Why Investing In Florida Preconstruction Homes Works!
Think about this... a finished home anywhere in Florida has a market value worth more than the actual cost of buying the land and building a new home.
By being investors ourselves, we knew there had to be a way to profit from the high growth rate of affordable housing needed in the fastest growing state in the country. During the past year, the median price of an existing home in Florida has soared 33 percent and is up 105 percent over the past five years. The biggest obstacle was finding a way to leverage real estate in Florida without having to put down the traditional 10% - 20% of the purchase price. Especially when buying a second home or investment home... but we needed to know how?
First we knew that profitability was crucial for everyone involved such as the land developers, home builders, financing banks, and especially for the investors.
Now after years of trial and error, we're finally able to offer real estate investors an opportunity to buy preconstruction homes in the fastest growing state with as little as $5000 total down. With such a low out of pocket expense, we have allowed our investors and investment groups the ability to leverage up to $417,000 in real estate with almost $0 down. That's a huge difference between the traditional 10% or 20% down which would equal $30K to $60K.
This Florida Real Estate Investment is Based on 3 Factors.
The Area - What we've learned over years of evaluating hundreds of areas and preconstruction investments in Florida is that you must have high growth and high appreciation. How do you ensure that? You look for what we have learned to call a "Big Event".
For instance in Hernando County Florida, (known for its laid back country feel and beautiful rolling hills) the "Big Event" would be the new $850 million Sun Coast Parkway. The completed parkway now connects all of Tampa Bay and it's surrounding areas with direct access to Hernando County. Before the parkway was completed, Hernando County laid dormant more than an hours drive North of Tampa. Now with the completion of the Sun Coast Parkway, drive times between Tampa and Hernando County have been cut in half and Hernando County has now started to grow leaps and bounds both residentially and commercially. With a "Big Event" like the Sun Coast Parkway, there is now a huge growth demand for housing.
That is the type of "Big Event" we look for when putting together the factors needed for a profitable preconstruction real estate investment opportunity.
The Home Builder - Once we have pinpointed an area to target, we then need to find reputable builders to work with. In order for our preconstruction opportunities to work, we must have the lowest possible build price per square foot while still building a quality product. By us having the backing of real estate investors like yourself and real estate investment groups from around the country, we are able to leverage our preconstruction buying power when negotiating with home builders. For an example, in Hernando County, we negotiated a buy price at roughly $60 - $75 sq. ft. with a well established Central Florida home builder that ranked 7th in overall pulled permits in Hernando County Fl. last year. This home builder also offers full 1/2/10 year home warranties standard on every home built and a 10 to 12 month delivery schedule.
Preconstruction Investment Financing - This last factor is truly the most difficult factor to secure. Please understand that before a bank is willing to lend money. They must absolutely believe the preconstruction opportunity is going to work and in return is a good risk. The banks must have faith in the area (high growth & appreciation), the builder (reputable, quality work, on time), the price (price per sq. ft., land cost, etc), and the real estate investor themselves (decent credit history and ability to repay the loan). Over the years, we have developed relationships with banks that believe in our preconstruction investment projects and understand the needs of real estate investors. We also know all investors have different finance needs and we have secured banks willing to offer multiple lending options on all our preconstruction opportunities.
If you have questions, please refer to our "Frequently Asked Questions" or contact us by clicking here.
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