Is Preconstruction Investing for You?
Is Preconstruction Investing for You?
It's the most frequently asked question about preconstruction investment on our website, GetPreConstructionDeals.com. From a "beginning" preconstruction investor to a highly knowledgeable one, all it takes are three simple steps.
Investment in the mechanics of preconstruction
A thorough understanding of what "preconstruction" investment is, why it has provided annual returns in excess of 100% for many investors, and the language used in preconstruction real estate investing are all essential prerequisites before you even begin investing. The good news is that this is the simplest thing you can do.
These words include reservations, hard contract assignments, and letter-of-credits, among many more that you'll learn about in this stage. Don't let the fact that you're a novice investor scare you away. Every time I offer a class on this subject, I can bring everyone up to speed in 30–60 minutes.
As a preconstruction real estate investor, how do you understand the ins and outs of the business? My recommendation is to make good use of the free information that can be found on the internet. Here at GetPreConstructionDeals.com, we provide an ebook of 30 pages that explains the fundamentals of preconstruction investment and provides real-world examples of preconstruction projects. Preconstruction investment, preconstruction condos, and a slew of other terms may be found by doing an internet search for one or more of those terms. After a few nights of practice, you'll be an expert. Many novice investors stop at Step 1 and immediately begin searching for "bargains," which is a mistake. In my view, this is a significant error since they lack the ability to quickly choose "smart investments" that distinguish the novice investor from the street-seasoned preconstruction investor.
Pre-Construction Projects to Search for
Did you notice how many real estate investing websites you came across when you did an online search in Step 1 above? The number of hits for the keyword "Miami preconstruction" may be found by simply typing it into any online search engine. Let me put you to the test. Can you quickly go through the projects found via the above-mentioned online searches and determine which ones need further investigation? For the most part, investors lose their cool at this moment. Savvy investors, however, can sift through all of this in a matter of minutes.
Over the years, I've had the chance to work with some very excellent investors as well as witness a large number of novices in the stock and real estate markets. It's common for a novice investor to ask a real estate professional, "How much money can I expect to earn on this investment?" How much money is at risk and how low is the risk of this investment? These are the first questions an experienced investor asks themselves while looking at the same investment. This is followed by the question, "How much money can I expect to earn if this investment succeeds?" They're attempting to figure out how much money they'll get compared to how much danger they'll take. In spite of this, they know how to ask the correct questions in order to rapidly determine whether this project has an acceptable reward-to-risk ratio for them.
How do you carry out Step 2 if you are new to investing or have previously relied on others to make investment decisions?Simple. To become a successful investor, you need to understand how clever investors think, how they measure risk, what contingency plans they have in place in the event that the investment fails, and so on. It's not tough or even challenging to do any of this. As a novice in preconstruction investment, this might be a difficult undertaking if you're doing it on your own. Investors who are genuinely astute, in my experience, are always seeking the advice of others and gathering as much information as possible before making a judgment on their own. They are well aware that even a seemingly small nugget of information may add up to tens of thousands of dollars in their own bank accounts.
When it comes to practicality, you need someone who has "been to the dance" before to guide you. Pay for a meal, a movie ticket, or anything and ask if they'll watch over your shoulder for you. It's best if you know a few folks in this particular group. You'll spend a lot of money on lunch, but the knowledge you obtain will be invaluable.
Our first home study course and our more in-depth live teleseminar course were both inspired by the need to help people become knowledgeable preconstruction investors. People often only have access to the real estate agent who introduced them to the project. In my experience, most real estate agents and brokers are excellent sources of information, but I don't think they look at an investment as carefully as I do. There's a strong chance you aren't ready to purchase when you find yourself questioning a salesman about whether "they actually believe you should buy this."
Learn to think like a wise investor for YOURSELF, no matter how you do it; it's not that difficult.
THE IMPROVEMENT OF YOUR PORTRAIT
The challenge you'll face if you think like a pro in Step 2 is that very few preconstruction projects will meet your needs. Newcomers mistakenly believe that this is the same as investing in the stock market. Just put your money down when they're ready, and you'll be set to go. True opportunities arise in the stock market and the preconstruction market when they are ready. When it happens, and only then, will the quick-thinking investor seize the opportunity. Just keep in mind that for many investors, a few solid investments per year is more than enough, and they may end up with more investment returns than they anticipated.
After Step 2, you should be able to envision the kinds of investments you would be interested in, which may be difficult to fathom right now. As an example, imagine you come to the conclusion that you like condo/townhouse developments that are not located on the ocean and that are located in the Southeast. For certain investments, you'd want them to be made in some developing markets, but not all of them. Great! Now is the time to get on the lists of brokers and developers who bring such projects to market. Working with a group of like-minded individuals is a great way to spread the workload and get extra clout because of the greater purchasing power of a larger group than just one person.
It's important to keep in mind that, as an informed investor, you'll need much more knowledge than you'll get from these sorts of sources. There are a number of things you'll want to know about the local market (other than "boy has this been hot"), the quantity of comparable projects that have been or are going to be presented, and why people are purchasing these projects.
Due to our attention to detail and our awareness of the urgency required for successful investments, our team has always found it more effective to work together than to attempt to solve this problem on their own after hours. With the combined purchasing power of a group, we have discovered that we can have greater access to high-quality assets.
For these reasons, the "Mastermind Group" at GetPreConstructionDeals.com was formed. As a result of this article, I hope you now have a better grasp of the three processes necessary to become a successful preconstruction investor. For others, the prospect of doing so will be prohibitively difficult or time-consuming. Yes, it will need some work and time. How many hours of your normal work would it take you to earn some of the big $75,000+ profits that some pre-construction investors are making?" I often ask them
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