I saw somewhere on this site that someone was having a house built and then selling it before closing. They only had to put down the deposit. Is this possible?
When ever I see the question "Is it possible?" I know the answer is almost always: "yes." Is it easy? no. Are there a myriad of details between "possible" and "the check has cleared the bank"? yes.
Does anyone know this process? I am a newbie and was thinking that I put down my deposit to have the house built. As it is being built, I market the house and when someone wants it at a price I like, they go find a lender and close on it? In what way is the builder involved at closing?
You can contract to buy a place from a developer/builder. Assuming there is no block in the contract you have the right to sell on your position and pocket the difference between what you buy for and what you sell for.
You have to recognize the risks if your buyer fails to perform and it is time to complete the transaction. If you do not complete you might lose your deposit.
That sounds pretty good. I am considering purchasing two spec homes and lease/opt them, hopefully sell them to the occupants w/in 2 years. I was thinking that if I could sell the house before closing great money in my pocket, if I can't sell it, I close and lease/opt it. Does this sound like a good plan. It will be my first investment. It has been hard to find motivated sellers to lease/opt the house from. I still plug away though.
I'm in a similar situation. I have a house being built right now that I was going to live in but now I must sell it. I know I can find a buyer before I close but my contract has a no assighnability clause. I'm trying to figue out how to get around it. without having to close on it and sell it.
In Calif a few years back a builder ran out of lots to build on, so we made him a deal. We bought and subdivided a parcel into five lovely town lots. My clients and I then employed him to build five really nice Cape Cod houses. You know wih the front staring Dormer windows, the white picket fence. Door painted a bright color. Brass coach lamps. Very East Coast. The lots located at the entrance to the San Fernando Valley. Perfect location for suburban living. All of the houses were three bedroom two bath and a detached two plus car garage so the handy person could have a little shop.
Of course as you know, life is lived on a different level then the planning. Our builder went nuts, did not stay on budget and some of his draws were truly original. The long and short I had to put on the funny shoes and belt and take over and finish on a highly restricted budget cus the funds had been disipated on the usual, broads, booze and bagatele.
I worked very hard and finished them up and the investors through our good offices sold them one by one. Everything worked out except for dear old sweet kind Lucius who did all the work. My recovery ws nothing, nada a big fat zero.
We had a party to celebrate the close of the last escrow of sale. It was a lulu. I was given a great present. A nice new working belt with one of those really great hammers that are actualy balanced for framing. Just what I wanted. Three months out of my life. Living in the Airstream trailer that I emplaced on the job site.
The purpose of this ramble is merely to point out that this type of thing can be done but the selection of the actual constructors is most important. Of course if you have an idiot Broker who can do construction it helps. We had some really nice cocktail hours after construction at the Airstream. Even the neighbors dropped by and joined in. Of course I am sure you understand the hidden purpose of serving a good Martini, all the future buyers were friends of the neighbors who came to our site and helped stir, not shake the Martinis.. Really that part was fun. Profitable to the Investors but not to me.
When ever I see the question "Is it possible?" I know the answer is almost always: "yes." Is it easy? no. Are there a myriad of details between "possible" and "the check has cleared the bank"? yes.
Does anyone know this process? I am a newbie and was thinking that I put down my deposit to have the house built. As it is being built, I market the house and when someone wants it at a price I like, they go find a lender and close on it? In what way is the builder involved at closing?
You can do what you are suggesting.
You can contract to buy a place from a developer/builder. Assuming there is no block in the contract you have the right to sell on your position and pocket the difference between what you buy for and what you sell for.
You have to recognize the risks if your buyer fails to perform and it is time to complete the transaction. If you do not complete you might lose your deposit.
John
[addsig]
That sounds pretty good. I am considering purchasing two spec homes and lease/opt them, hopefully sell them to the occupants w/in 2 years. I was thinking that if I could sell the house before closing great money in my pocket, if I can't sell it, I close and lease/opt it. Does this sound like a good plan. It will be my first investment. It has been hard to find motivated sellers to lease/opt the house from. I still plug away though.
I'm in a similar situation. I have a house being built right now that I was going to live in but now I must sell it. I know I can find a buyer before I close but my contract has a no assighnability clause. I'm trying to figue out how to get around it. without having to close on it and sell it.
In Calif a few years back a builder ran out of lots to build on, so we made him a deal. We bought and subdivided a parcel into five lovely town lots. My clients and I then employed him to build five really nice Cape Cod houses. You know wih the front staring Dormer windows, the white picket fence. Door painted a bright color. Brass coach lamps. Very East Coast. The lots located at the entrance to the San Fernando Valley. Perfect location for suburban living. All of the houses were three bedroom two bath and a detached two plus car garage so the handy person could have a little shop.
Of course as you know, life is lived on a different level then the planning. Our builder went nuts, did not stay on budget and some of his draws were truly original. The long and short I had to put on the funny shoes and belt and take over and finish on a highly restricted budget cus the funds had been disipated on the usual, broads, booze and bagatele.
I worked very hard and finished them up and the investors through our good offices sold them one by one. Everything worked out except for dear old sweet kind Lucius who did all the work. My recovery ws nothing, nada a big fat zero.
We had a party to celebrate the close of the last escrow of sale. It was a lulu. I was given a great present. A nice new working belt with one of those really great hammers that are actualy balanced for framing. Just what I wanted. Three months out of my life. Living in the Airstream trailer that I emplaced on the job site.
The purpose of this ramble is merely to point out that this type of thing can be done but the selection of the actual constructors is most important. Of course if you have an idiot Broker who can do construction it helps. We had some really nice cocktail hours after construction at the Airstream. Even the neighbors dropped by and joined in. Of course I am sure you understand the hidden purpose of serving a good Martini, all the future buyers were friends of the neighbors who came to our site and helped stir, not shake the Martinis.. Really that part was fun. Profitable to the Investors but not to me.
Soooo, With great care. Lucius 8-)