generally all contracts are assignable unless there is language to the contrary. Precon takes place all the time.
I would try and sell through a realtor after discounting the commission. I do 3.99 all the time.
generally you can get funding but you may have to shop lenders.
Your best bet is to contact a real estate firm that deals in preconstruction all the time.
They generally have a pool of investors that like to invest in any phase of the project.
Some are in it for a quick profit and flip, others like to hold on to it and others like to live in it.
Look in my profile on how to contact me and I will refer you.
The developer i have been investing with, just added a new addendum to the contract (actually a seperate contract), stating that you are not purchasing this as a speculatory real estate transaction and that the developer can not be held liable...these are still assignable, i still purcahse well below comp values, discount on the memberships, get a leaseback for 12 months (8% of sales) if a buyer is not found, so i just sign away, there are still some investor friendly developer out there, just have to sign a few more papers . The keys project in Islamorada sold out in 4 hours!!!!!
First, let me say that I am a developer. I sell to investors. I do not, however, want to sell to investors that are not capable of closing. I have stated many times that preconstruuction investing is very profitable - or at least it can be...but you need patience. Heck, I have made alot of money investing in preconstruction before I concertrated on developng my self.
On certain projects we will allow assignment only with our writtten permission. Our permission will be granted if the following conditions are met:
1. We approve of the price.
2. We are 90% sold out in the project.
3. You pay a fee for the assignement ( usually 1/2 of 1% ( Trust me - they are a hassle for the developer)
4. You must assign AT THE CLOSING. (In otherwords you are still : on the hook" for the closing.
The real issue for developers ( and the banks) is WILL THE CONTRACTS THAT ARE HARD, CLOSE.
I love investors in our projects, but the banks do not. Most lenders will require the developer to put a no assignment clasue in the contract.
Ther area many posts and articles about pre-construction investing on this site and others.
Good Luck.
Gregg
BTW_ As for sites and advice...there are a few good websites out there. Rather than plug a site, I suggest you do a search for preconstruction condos. Also look for articles here at TCI
This is a good question. I want to make sure I get this right. When you sell at 165K, you will pay gains on the difference between 165K and 136? Did I get it right?
Thanks
Deb
When you purchase the home at 136k, that is your tax basis. It does not matter to the IRS if you take the additional money out in a line of credit, or as profit. When the title changes hands, you will be taxed on the difference between your basis and the sale price. Short term capital gains are taxed at your personal income tax rate, which is usually 25% or more for most folks. I would recommend selling on a lease option, and you would be able to move to the more favorable long term tax bracket of 15%. Just my 2 cents.
make sure to keep a good record of ALL your expenses such as traveling to the construction site ( how many miles, how often,) etc... that would reduce you profit and taxes.
I am looking at a deal that requires similar financing.
Turns out Union Bank of CA turn out to be a lender on a couple leasehold in the area.
generally all contracts are assignable unless there is language to the contrary. Precon takes place all the time.
I would try and sell through a realtor after discounting the commission. I do 3.99 all the time.
generally you can get funding but you may have to shop lenders.
Good Luck!
[addsig]
Dear Chris,
Your best bet is to contact a real estate firm that deals in preconstruction all the time.
They generally have a pool of investors that like to invest in any phase of the project.
Some are in it for a quick profit and flip, others like to hold on to it and others like to live in it.
Look in my profile on how to contact me and I will refer you.
Good luck!
Dirk,
The developer i have been investing with, just added a new addendum to the contract (actually a seperate contract), stating that you are not purchasing this as a speculatory real estate transaction and that the developer can not be held liable...these are still assignable, i still purcahse well below comp values, discount on the memberships, get a leaseback for 12 months (8% of sales) if a buyer is not found, so i just sign away, there are still some investor friendly developer out there, just have to sign a few more papers . The keys project in Islamorada sold out in 4 hours!!!!!
First, let me say that I am a developer. I sell to investors. I do not, however, want to sell to investors that are not capable of closing. I have stated many times that preconstruuction investing is very profitable - or at least it can be...but you need patience. Heck, I have made alot of money investing in preconstruction before I concertrated on developng my self.
On certain projects we will allow assignment only with our writtten permission. Our permission will be granted if the following conditions are met:
1. We approve of the price.
2. We are 90% sold out in the project.
3. You pay a fee for the assignement ( usually 1/2 of 1% ( Trust me - they are a hassle for the developer)
4. You must assign AT THE CLOSING. (In otherwords you are still : on the hook" for the closing.
The real issue for developers ( and the banks) is WILL THE CONTRACTS THAT ARE HARD, CLOSE.
I love investors in our projects, but the banks do not. Most lenders will require the developer to put a no assignment clasue in the contract.
Ther area many posts and articles about pre-construction investing on this site and others.
Good Luck.
Gregg
BTW_ As for sites and advice...there are a few good websites out there. Rather than plug a site, I suggest you do a search for preconstruction condos. Also look for articles here at TCI
http://www.thecreativeinvestor.com/commercial/modules.php?name=Articles&file=article&articleid=380
[ Edited by GFous on Date 06/25/2005 ]
This is a good question. I want to make sure I get this right. When you sell at 165K, you will pay gains on the difference between 165K and 136? Did I get it right?
Thanks
Deb
When you purchase the home at 136k, that is your tax basis. It does not matter to the IRS if you take the additional money out in a line of credit, or as profit. When the title changes hands, you will be taxed on the difference between your basis and the sale price. Short term capital gains are taxed at your personal income tax rate, which is usually 25% or more for most folks. I would recommend selling on a lease option, and you would be able to move to the more favorable long term tax bracket of 15%. Just my 2 cents.
You will be taxed on 29K.
make sure to keep a good record of ALL your expenses such as traveling to the construction site ( how many miles, how often,) etc... that would reduce you profit and taxes.
Well in essence you get to pay the taxes on the financing above your basis at the time you take out the equity line.
The amount of debt you have is irrelevant in considering your taxable basis at the time of sale.