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By now, everyone has heard about buying preconstruction condos and some of the astonishing profits that have been generated by these investments. However, what many people fail to understand is that there is an alternative way to play the preconstruction investing game, particularly for those investors with solid financial resources. The Miami condo market as an ideal example. Presently, there is a Miami condo that originally sold out almost 2 years ago when the prices were significantly lower but original investors are now interested in reselling their units. This project was one of the first high-rise projects in the Miami downtown area. In recent times, similar units at ICON Brickell sold out the first tower in 2 days at an average of $550 a square foot. The second tower is now selling at an average of $600 sq ft. For some of these resells in the area, it is noticed that close to a $100/sqft reductions in price to around $500 per square foot; and that is asking price.

Aggressive pursuit of projects where other investors are about to close in one strategy. In a case like this, you have numerous original investors that are hearing that loud clock ticking in their head counting down to close where they will have to close on their Miami condo, have to pay debt service, and potentially try to rent out their Miami condo. These sellers are people that have already made great returns, then they may have a lot of motivation to just get most of their profits and run without incurring additional costs. For instance, suppose you were able to negotiate a $130/sqft discount on a Miami condo as opposed to only $100/sqft. And suppose that results in an additional $30,000 savings on a 1,000 sqft unit. From a motivated seller's point of view, they do not care if they have to drop their profit from $150,000 on a Miami condo to only $120,000. For the right kind of seller, the important thing to keep in mind is that if they know you, as the buyer, can make it painless for them with no additional cash outlays. A resell type investor may look at this and say well, “I will rent the Miami condo out for a couple of years.” No, their payments will not cover their mortgage and maybe they end up losing $800 per month which is merely $19,200 over the course of two years. Compared to that $30,000 extra discount they got, that is a small price to pay for the right individual knowing that they purchased their condo at $130 *1000 sqft = $130,000 less than what individuals across the river pay for new Miami condos. Doing this kind of investment, it would require you to establish the actual numbers for yourself since these numbers are only provided as an example.

Miami condo has been used as an example here but these opportunities are going to exist in several places. As projects begin to close, particularly in overbuilt areas having lots of investors that are not about to close, that provides an excellent opportunity to find very motivated sellers. The trick is to locate those early projects in an area that are on the verge of closing due to the fact that there is tons of equity that the seller can give up to the new investor if that new investor will just simply pay them some profit and not make them incur any extra expenses.