What is preconstruction syndication and how does it works?
This innovative approach involves purchasing real estate contracts on a project before it has started. The developer typically must sell 50 percent of the project to receive his construction loan from the bank and agrees to sell 30 percent of the project to a syndicate of buyers at a discount and with preferential terms. Buyers can experience profits even if the market is flat or depreciates, because their profit is based on the terms of the purchase agreement, not market conditions.
What are the benefits of preconstruction syndication?
Syndicate members receive the benefit of buying at special prices that can result in instant equity. They can secure the deal with a small down payment and pay the balance after they close. When the project closes—and sometimes before—they can sell at a higher price. Best of all members have a reduced risk due to the terms that have been negotiated directly with the developer. You’ll be amazed, but you actually profit in a downturn market as well. Sign-up for an appointment to discuss further how this works further.
How much can I earn with preconstruction real estate?
Our purchase models typically build in a starting potential profit of 40 percent. Certain projects have experienced over 100% in profit. Keep in mind, the affluent investor's primary concern is usually principal protection. Once that is established, they will entertain profit potential. For that reason, we suggest that one’s focus should always be the security of the escrowed funds with the starting potential return of 40%. Any time there is a profit above the 40%, it is an added bonus to the client.
What exactly is preconstruction syndication?
This unique program lets PropertyVestors members purchase preconstruction contracts from developers under appealing terms. Buyers can still experience profits even if the market is flat or depreciates. That’s because their profit is based on the terms of the purchase agreement, not market conditions.
A preconstruction syndicate gives purchasers access to even more favorable terms with developers. These can include lower deposits, larger price discounts, the ability toassign/resell units prior to closing, and a refund of the deposit if the developer defaults or takes too long.Essentially, preconstruction syndication buyers are in the best position to effectively manage their risks while maximizing their profits. The syndication partner that makes these arrangements and negotiates favorable returns benefits by splitting the profit 50/50 with the individual buyer. No payments are made unless a profit is achieved.
Are there good preconstruction syndication opportunities for buyers?
Absolutely. More than ever, developers are looking toward real estate syndication to sell their inventory. By doing so, the developer saves thousands—if not millions—of marketing dollars. And this enables our buyers to engage in preconstruction projects involving high-end condos that are still producing staggering profits.
How can I get started in preconstruction syndication?
That’s easy. Contact PropertyVestors, and we’ll help you find an opportunity that’s right for you.
