Over the last last two years, many investors have disappeared from pre-construction markets. They have been burned by falling prices, by inability to qualify and close on their contracts, and by developers of projects which are on hold or unlikely to be completed. The perception is that cooling markets make it impossible to reap the benefits of appreciation.
Smart investors look for opportunities in any market. Pre-construction investors continue to form an important link in the financing of new developments since large segments of the end-user market will not consider purchase until projects near completion.
In today's market, we see investors assembling syndicates to increase their leverage. Enterprising financiers and brokers negotiate deals with developers on behalf of investors. These deals shift the risk from the purchaser of pre-construction back to the developer.
In recent weeks we have seen another change as developers now extend the special terms, previously offered strictly to institutional and "block" investors, to individual pre-construction investors. These terms may include:
· Deposits remain in escrow, not used for construction costs
· Interest on deposits accrue to the investor
· Investor-contracted units receive preferential sales treatment
· Investors receive protection against price decreases
We have also seen developers add special risk-reducing terms specially designed to appeal to individual investors in the event they must close, including:
· Mortgage interest credits
· Developer paid maintenance
· Participation in rental programs
While some communities have incorporated some of these terms into their offerings, we have begun to see complete programs oriented to the new pre-construction investor.
According to John Kavazanjian "Our exciting program enables the investor to enjoy an extremely attractive return and while being protected from the types of risks that have kept investors on the sidelines. We are very excited to offer this to investors."
John can be reached at 561-214-9426 Office 561 699 3004 Cell.
Mr. Smith is Founder and President of newconsearch.com, a Delray Beach, Florida based company founded in early 2005. newconsearch.com helps real estate agents and developers market new construction through its comprehensive database of new property throughout the state of Florida as well as resort and destination property in the Southeast, The Caribbean and Central America. Over 12,000 real estate agents have used newconsearch.com to find new property and the service has generated over 33,000 leads for Florida builders since launching in 2005.
Steven Talcott Smith
President
2275 S Federal Hwy, Suite 270, Delray Beach, FL 33483
John Kavazanjian
Broker
"A Real Professional"
Florida
Premier RE Mgt. & Sales
2275 S. Federal Hwy.
Suite 330
Delray
Beach, FL 33483
(561) 243-2168 office
(561) 272-8791 Fax
(561) 699-3004
Cell
jkavazanji@aol.com
www.palmbeachrealestatesource.com
