Making Money In Real Estate - New Construction
Practically everyone seems to believe the market has put up a
permanent “out of order” sign. We all assume we won’t ever make
money on real estate again. BUT, we’re all wrong! Numerous chic and
upscale neighborhoods stopped building as the market began to
falter, and since then, those “half-built” homes have been purchased
by investors who were hoping to eventually sell the home once it was
finally built for a very large profit.
When it became obvious that the greater part of people who were
commissioning new construction homes to be built were investors and
there were not a lot of buyers, the entire market crashed. Investors
lost money and many developers went out of business. They had a lot
more homes in their new subdivision for sale than there were buyers.
On top of that, they owed banks money for financing the subdivision.
Pretty soon, banks took over these areas, which are located
throughout the United States and particularly in Florida, California
and Nevada. These areas were booming in the 1990s and then crashed.
There are many homes in these chic neighborhoods that are in the
process of development. When the builder went bankrupt, the
construction was cut short. Banks took over but have no interest in
getting these properties constructed. They are simply looking to get
their money back.
If you know of new construction or are in the trades, you can buy
one of these partially constructed homes for a fraction of their
cost and finish the construction yourself. You have to be careful,
though, that you understand what you are getting into.
You will have to know about building codes and make sure that the
home is completed in accord with the codes. In addition, you should
also be aware that some municipalities have ordinances that require
that construction be completed within a specified amount of time. If
the house has not met that specification, there may be fines
associated with the property. A title search will allow you to
discover if there are any fines that have been levied against the
property from the municipality for non completion of construction.
On top of doing as much of the work on your own, you can also find
labor fairly inexpensively throughout the United States. The trades
were hit hard during this recession and there are many people who
are experienced in all aspects of home building that are out of
work. Many small trade companies have even gone out of business. You
can find cheap labor to help you finish the construction of your
Buying new construction is usually a way to make money in real
estate during any type of market. But even in this recession, you
can buy partially constructed homes, finish them and then get ready
to sell. Although you may make a small profit selling the home after
construction is completed, you can make an even larger profit if you
look for the long term investment and wait until the market turns
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