requesting an opinion: preforeclosure vs. preconstruction
I am new investor and am interested in getting a more experienced person's opinion on purchasing pre-foreclosed vs. Pre-construction. I have already bought one pre-construction property and am being proposed the purchase of a second one. However, I am a bit weary of putting all my eggs in one basket. At this moment I do not have the means to invest in more than two properties so I am wondering if it would be wiser to forego a second pre-construction and use the remaining funds to buy pre-foreclosed.
In short, as a novice which of the two approaches is best for me?
I would go after pre-foreclosures, but mind you it can be more complicated than other methods of investing. Pre-construction you have to be weary of because if you are purchasing a home in a new neighborhood anything can happen. The prices may drop or rise, you never really know. You are depending on the market with pre-construction. With preforeclosures, you are buying low and selling high.
Tanya
Ria1972, before you know it you will have three or four projects going on at the same time. You will know when you have all the skills needed to do what you want to do. You will grow into it as my mother use to say to me a small child.
in my opinion, new investors should not try to do pre-foreclosures. As Tanya said, it's a more difficult method of investing. You are dealing with a whole string of legal issues with a pre-foreclosure that usually will not crop up in other purchases. With these pre-contructions, is it a new neighorhood, or adding to an existing? Is the builder a reliable contractor? The one problem that I've seen in pre-contruction buying is that the builder may cut some corners to increase his profits. But if they have a reputation of a quality builder then that shouldn't be a problem.
Roger