Flipping new homes?

Question

I was reading a real estate book that mentions a strategy of how investors can make a quick profit by putting down a deposit on a new home that a builder or developer hasn't even started, basically, making a reservation on the property in the hopes that when the house is complete or sooner, the market value will have risen to a point where they can make a quick profit by selling your stake before closing on the deal. Has anyone ever used such a strategy? If so, how much (%) did you have to put down and what are the major downsides to such a strategy?

Albert Mainja · Answer

@Christopher Phillips Ok, i think its a great strategy especially when its done with the right timing like you said, thank you so much for your valuable information, i'll be looking into this further & explore the market here in Dallas Tx.

Christopher Phillips · Answer

@Albert Mainja

It's an interesting concept, but probably needs to be done with the right timing during a growing market.

From a spec build standpoint, I see a lot of tear downs turning into brand new expanded homes.

Albert Mainja · Answer

thanks @Christopher Phillips for the feedback, i will check it out right away.

Christopher Phillips · Answer

@Albert Mainja

Personally, no. But my clients have purchased the development homes. It's not for everyone due to long horizon. Takes awhile to get permits to knock down a house, do the demo, and then the build... In the hot towns near me squeezed for new housing, you'll always see a few homes getting knocked down and rebuilt. Just drove by one last week near me. It's usually taking down an older cape and putting up a large colonial.

Albert Mainja · Answer

@Christopher Phillips just out of curiosity have you done any of these deals yourself?

Christopher Phillips · Answer

@Albert Mainja

https://www.linkedin.com/pulse/why-flipping-lots-new-construction-hottest-strategy-today-norton

Flipping new homes?

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