deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that in

If an investor heard about an investment that could yield 75%-100% returns within one or two years, he would no doubt say, I want a piece of that action! And it's true, preconstruction real estate investing has excellent potential for profits beyond those you'd find in many other kinds of investments. However, investors need to see through the hype and understand that there are also substantial risks involved in this kind of investment, with the very real possibility of financial loss. Fortunately, the smart investor can control most of these risks by selecting the right investments and planning for negative outcomes.

Put simply, preconstruction investing involves buying a property at a discount before it is built and then selling it at a profit after the building is completed. The value of the property increases during the construction, making it worth more than the price it was bought for. The investor's profit, of course, comes from the difference between his buying price and his selling price.

In a booming market, real estate can be expected to appreciate significantly over 1-2 years. However, what if the market takes a downturn? It's possible that the unit may be worth less than what the investor paid, at least temporarily. Or there may be a shortage of qualified buyers to take the property off the investor's hands. Large developments that take 3-8 years to complete can be highly speculative investments. The investor's money is tied up for all this time, and it may be hard to predict the state of the real estate market so far into the future.

Preconstruction developments often involve condos and resorts in attractive locations. The developer will naturally promote the property in a very favorable light and try to downplay any drawbacks. It's easy for an inexperienced investor to get caught up in the excitement of buying, without investigating all the relevant factors. In fact, one of the most important aspects of preconstruction investing is knowing which deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that inv

the smart investor can control most of these risks by selecting the right investments and planning for negative outcomes.

Put simply, preconstruction investing involves buying a property at a discount before it is built and then selling it at a profit after the building is completed. The value of the property increases during the construction, making it worth more than the price it was bought for. The investor's profit, of course, comes from the difference between his buying price and his selling price.

In a booming market, real estate can be expected to appreciate significantly over 1-2 years. However, what if the market takes a downturn? It's possible that the unit may be worth less than what the investor paid, at least temporarily. Or there may be a shortage of qualified buyers to take the property off the investor's hands. Large developments that take 3-8 years to complete can be highly speculative investments. The investor's money is tied up for all this time, and it may be hard to predict the state of the real estate market so far into the future.

Preconstruction developments often involve condos and resorts in attractive locations. The developer will naturally promote the property in a very favorable light and try to downplay any drawbacks. It's easy for an inexperienced investor to get caught up in the excitement of buying, without investigating all the relevant factors. In fact, one of the most important aspects of preconstruction investing is knowing which deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that in

lling price.

In a booming market, real estate can be expected to appreciate significantly over 1-2 years. However, what if the market takes a downturn? It's possible that the unit may be worth less than what the investor paid, at least temporarily. Or there may be a shortage of qualified buyers to take the property off the investor's hands. Large developments that take 3-8 years to complete can be highly speculative investments. The investor's money is tied up for all this time, and it may be hard to predict the state of the real estate market so far into the future.

Preconstruction developments often involve condos and resorts in attractive locations. The developer will naturally promote the property in a very favorable light and try to downplay any drawbacks. It's easy for an inexperienced investor to get caught up in the excitement of buying, without investigating all the relevant factors. In fact, one of the most important aspects of preconstruction investing is knowing which deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that in

hard to predict the state of the real estate market so far into the future.

Preconstruction developments often involve condos and resorts in attractive locations. The developer will naturally promote the property in a very favorable light and try to downplay any drawbacks. It's easy for an inexperienced investor to get caught up in the excitement of buying, without investigating all the relevant factors. In fact, one of the most important aspects of preconstruction investing is knowing which deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that in

deals to get involved with. A savvy investor understands that he doesn't need to jump into every development that comes along. Actually he will do better by setting criteria for the kind of real estate he will invest in and sticking to the plan. Making the right decisions and choosing the right investments is a skill that can be learned through studying the techniques of successful investors and applying them to one's own individual situation.

One of the benefits of preconstruction is that investors only have to put down 5%-25% of the price when they commit to buy the property. The small cost of entry may lead investors to overextend themselves financially in their eagerness to get in on the deal. However, if the investor can't afford to close on the unit when it's finished, he will forfeit all the money he's put into the project. A wise investor will avoid this kind of outcome through judicious planning.

It becomes obvious that the area of preconstruction investing has many complexities. Anyone who is serious about doing this will want to learn as much as possible about the process before diving in. This could include attending seminars, taking courses, reading books, talking to more experienced investors, joining real estate clubs, and so on. The time you spend in research and self-education will undoubtedly pay off. The more you know about selecting the right properties and planning for negative outcomes, the more likely your investments will turn out to be high reward, rather than high risk.