Take a Walk in My Shoes

Buy a pre-construction home from one of the big builders, KB, Pulte, Frontier or Forecast.

hello 2004 called it wants its quick money back

It depends on where you live. You can still make $$ through these pre-construction homes. In my area you can still buy one of these homes at below market value and turn around and sell. If the price goes down before I move in, I just abandon my very small deposit. Risk vs Reward. I will risk 2k anyday to move into a house that has 85k equity built in before I move in. I have done it before and am currently doing it. It helps to have a RE license so you save money on the commission when you turn around and sell.

[DesertCat]

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It depends on where you live. You can still make $$ through these pre-construction homes. In my area you can still buy one of these homes at below market value and turn around and sell. If the price goes down before I move in, I just abandon my very small deposit. Risk vs Reward. I will risk 2k anyday to move into a house that has 85k equity built in before I move in. I have done it before and am currently doing it. It helps to have a RE license so you save money on the commission when you turn around and sell.

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This worked in Vegas until a year ago. This worked in Phoenix until about ten seconds ago. Sunday paper had nice story on how builders have started to beg realtors for buyers, whereas previously they put the screws to realtors commissions since they had all the buyers they needed. I'm guessing flipping is no longer profitable here...

Its a simple math problem. I buy a home that will be built in 6 months for 350k. If the home values go down drastically in price to make the deal unprofitable, I bail and lose my 2k deposit.

Current comparable prices for the same type of home in the same area are going for 400K-435k.

The builder pays my closing costs if I use their lender. I use an 80/20 loan. I have paid nothing out of pocket. I put the home up for sale and take the 3k per month hit paying off the mortgage until I sell. My wife is an agent so I don't have to pay a listing agent, only the buyers agent. That takes out about 9k out of the deal. Assuming I have to hold onto the home for 4 months before it sells, this is what I stand to gain.

410k Sales Price - 350 PP - 9k commission - 0 closing costs - 4 *(3k) monthly payment = 39K profit

It still works if you know what you are doing and live in the right area.

[Scotty O]

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