What are Real Estate Cash Investments - The real estate business

How to Invest in Pre-construction  Real Estate

from Success4Life

What are Real estate cash investments? In pre- construction real estate can prove to be a worthwhile investment. In some cases in the domestic USA, real estate buyers can leverage their resources enabling the opportunity to hold a property with as little as 5% of the down payment. Another benefit is that in some areas real estate will appreciate in value before the project is complete so the owners could realize monetary gain before actually closing on the property. Further, Pre-construction real estate often affords buyers the opportunity to acquire the most desired real estate, in the most desired locations at below market values. Pre-construction real estate is available to buyer in both the primary residential and luxury, investment/second home markets. Pre-construction resort real estate is available to buyers interested in owning an investment/second home is some of most desired locations in the world. Ownership is often available in condo-hotel, full and fractional ownership methods. Below are some steps that you can take into the real estate cash investment business.

 

1. For residential opportunities: Search for the area market or city where you would like to invest in real estate. For Investment/Second homes decide your needs, goals and critical buying criteria including budget, theme (i.e. beach, ski)
2. Find a local realtor to assist you to locate and set up appointments for you to visit potential properties of interest. For Investment/Second home pre-construction resort real estate it used to be up to the individual to find and evaluate all of the available opportunities, especially those not in the United States which is difficult given all that is available. That has changed now with some consultant firms specializing on just the luxury pre-construction resort real estate market.
3. In the US have your local realtor set up appointments to visit the in-house sales offices of selected preconstruction projects. For investment/second home opportunities contact a luxury pre-construction real estate consultant so that they can work with you to identify which opportunities are perfect to meet your needs and goals.
4. Choose the project(s) that you wish to invest in. The first 3-6 months of the pre-selling phase of preconstruction consists of the reservation stage. When you sign up for the project of interest you will a receive contract from the developer. If you are working with a consultant firm they will coordinate the delivery of the needed paperwork.
5. Review and complete the required real estate  paperwork. The sales contract will be accompanied by a refundable deposit, usually 10% of the purchase price. The deposit is held in escrow with a selected title company and is fully refundable should you wish to cancel your reservation. The reservation stage of a project usually lasts until the project is at least 70% sold out.
6. Review all documents with your accountant or lawyer - After the reservation period which can last anywhere from several days or 6 months “until projects sell out.” Time frames and process to proceed to final contract depend on the developer and the country in which the real estate is being built. Your consultant will be able to guide you step by step through this process. Once the final contract is delivered the buyer typically has 15 days to review the documents and can choose to commit to move forward or cancel and received refunds on the reservation fees. Again, process and timeframes often vary by country and development. Your pre-construction resort real estate consultant will be able to guide you through this process to ensure ease of transaction.
7. Post Contract - At this point you will be asked to provide roughly 20% of your purchase price or the balance of your earnest money. This balance is ‘minus’ your initial reservation deposit. It takes approximately 18-24 months after you submit your hard contract for construction and closing to be completed. Depending on the development and the country payment schedules and property delivery dates can differ.
8. Proceed to closing - At approximately 18-24 months after hard contract when the project is at or almost fully completed, you will be issued a Certificate of Occupancy (CO). At this point you are granted access to inspect your unit and create a list of any faults you find. You are doing a walkthrough to make sure the unit is to your satisfaction and is not in any way at default. Assuming all is to the owners satisfaction, you will go to closing. At closing you should have financial arrangements made regarding the balance of the unit or units. This is done by securing financing or having available cash or transferable assets.
9. Determine a return of investment strategy - each investor or purchaser involved in a preconstruction project has a different strategy or motive for how they will capitalize on their preconstruction opportunity. Real estate can be owned and lived in, sold quickly, or depending on the available programs, rented for the owner by a resort management company while the owner is away, without owner effort, for a share in the rental revenues. Others are most concerned with rare location and unique branded real estate and amenities that could lead to longer term capital appreciation.

Tips

• 2 years to a Million in real estate and investing real estate are both great books  above to have to help you in buying your next real estate property. You can become successful in real estates if you are trying to make extra cash money

• Investor should be aware of IRC 1031 which allows for the tax deferred exchange of real estate. This would allow a real estate investor to sell his investment property and invest into a new property without paying taxes. This permits greater leverage and can allow an investor to invest from one property into multiple properties or vise versa.