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Purchasing preconstruction condos is not an estranged thought for many and some because there are amazing profits that have been generated by these investments. Nonetheless many people fail to understand that there is another way to play the preconstruction investing game, especially for those investors with solid financial resources. This article will discuss the Miami condo market as a great example.

Presently, there are Miami condos 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 Miami condos projects in the downtown Miami area. Lately, 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 Miami area, you can notice close to $100/sqft reductions in price to around $500 per square foot; and that is asking price.

You have to pursue projects where other investors are about to close and do so aggressively. In a case like this one, you have a number of original investors that are hearing that loud clock ticking in their head, the clock that is counting down to close where they will have to close on their Miami condo, have to pay debt service, and potentially attempt to rent out their Miami condos. You have to acknowledge that these sellers are people that have already made great returns, and then they may have a lot of motivation to just get most of their profits and run without incurring additional expenses.

For example, supposing you were capable of negotiating a $130/sqft discount on such Miami condos as opposed to only $100/sqft. Then, you can assume that results in an additional $30,000 savings on a 1,000 sqft unit. From a motivated seller's perspective, what do they 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 is that if they know you, as the buyer, can make it painless for them with no extra cash outlays.

For a resell type investor, they may look at this and might opt for renting the Miami condos out for a couple of years. No, their payments will not cover their mortgage and maybe they end up losing $800 every month. That is only $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 people across the river are paying for new Miami condos. If you do this type of investment, you are required to establish the actual numbers for yourself due to the fact that these numbers are only provided as an example.

We have used Miami condos as an example here but these opportunities are going to pop up in many places. As projects begin to close, particularly in overbuilt areas having lots of investors that are ill prepared to close, that provides an excellent opportunity to find exceedingly motivated sellers. One trick to this, is to locate those early projects in an area that are about to close since there is tons of equity that the seller can give up to the new investor if that new investor will just pay them some profit and not make them incur any extra expenses.