|The Key Ingredient To Increase Preconstruction Profits
By Over $20,000
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
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
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.
Dr. Chris Anderson is a co-founder of www.GetPreconstructionDeals.com and is referenced in many
venues including the New York Times and USA Today. Download his free, 30+ page preconstruction
investing ebook today at Get
contact_name: Chris Anderson, PhD
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