The Key
Ingredient To Increase Preconstruction Profits By Over
$20,000
By Chris Anderson, PhD
One of the greatest preconstruction investing issues
that I hear from individual investors is that they can’t
get access to what they believe are good projects.
Regardless if the preconstruction project is a beach
condo, a townhouse, a single family home, or even land
investment, individuals are finding that many
restrictions are being placed on them by developers. In
addition, prices are continuing to runaway. So given all
this, how is an individual investor supposed to excel in
this environment? Read on and find out!
Suppose the investor had the ability to march right into
the developer’s office and demand that they should give
you at least a $20,000 discount, which now would turn a
good project to a really great one. I mean, you’re
serious about your preconstruction investing. Shouldn’t
you be entitled to that discount? After the developer
stopped laughing, they probably would suggest the
investor find a path to their door.
If you look at this from the developer’s perspective,
they probably already have a marketing team in place to
provide a steady supply of purchasers or investors. In
this market, a single individual preconstruction
purchaser/investor would have absolutely zero
impact on anything the developer was doing or planning.
Basically your request for a discount provides zero
advantage in the preconstruction process.
So let’s change this picture a little bit. Suppose you
are a surgeon and you walk in with 15 other doctors and
tell the developer that you are very serious about this
preconstruction project and probably others that the
developer has on the drawing boards. Ok, this is
possibly a horse of an entirely different color for the
investor group. Having a single group come in and
moving a block of 15 units in one fell swoop may be
something of interest to the developer. This is
especially true if the developer has time pressures to
get this preconstruction project moving forward.
In this real estate environment, with lots of investors,
it may (or may not) be possible for this group to get a
discount but there may be several other ways that this
developer might chose to help the group. For example,
the developer could assure the group that they will
definitely be able to get 15 units in the
preconstruction project; for many locales, even that is
a major feat. In addition, the developer could assure
this group that they may get first crack at another
phase, or another project altogether. If the developer
is wise, they will find some way to work with this group
and treat them well.
A great example of the buying power of groups can be
found in a
new project at
www.getpreconstructiondeals.com. With over 8,000
preconstruction subscribers to our database, there are
potential methods to form relationships with developers
where it is mutually beneficial to both the developer
and the investors. This pooling of “buying power” is
really the genesis of our Mastermind Group.
Can You Consistently Find Low Risk, High
Return Projects?
Many people struggle with finding quality
properties to add to their portfolio. Most
can only get access to what is available locally
and even then, it is tough to be on the inside
and get good access to projects.
This is where the Mastermind Group excels.
Using the purchasing power of a group of
individuals, we can get access to projects that
many people would never hear about. From
there, we bring back tons of detailed
information so that you can decide if this meets
your criterion.
In this new preconstruction project, the developer has
agreed to provide a $15/Sqft discount if 20 investors
make their reservations in a short period of time. For
a 2 Bdrm, that is a discount over current selling prices
of $21,570!! Simply because 20 people made the effort
to work together on a preconstruction investment of
mutual interest. In addition, this is great for the
developer because with that number of new
preconstruction reservations in place, it helps them
accomplish their goals more quickly. This is an example
of the proverbial win-win situation.
So how can you take advantage of group buying power in
your next investment, regardless if it is
preconstruction or another type? First, you have to
find a place where other like minded people visit.
Possibly this is a local real estate club, a group of
co-workers that like to invest together, participants in
an on-line forum, or even as part of groups like ours.
Regardless of how you accomplish the goal, think in
terms of how you can best put together your team and
increase your buying and negotiating power.
