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by Chris Anderson
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r investment?
A: Of course. You could buy in, and the lending rules change, or suddenly we start seeing horror stories in other regions about people losing money in real estate, and then on a short term basis, your preconstruction investment may decrease in value. As they like to say on Wall Street, that is not a loss until you sell. If you truly believe in the longer term, then your decision might be to exit quickly or just wait until the boomers start looking where they are going to live. To me, it is very comforting that I know that I have that backup plan.
Q: What kind of preconstruction properties am I looking for?
A: This depends on the wealth category you are seeking but suppose we are targeting wealthy but not super rich. The best way I know to do this is imagine that you have just closed out all your real estate investments in a few years and you are worth $5 Million. Where would you like to live? What "lifestyle" would you want? Would you be near water, or golf, or mountains, etc.? Now if you know you don't think like most people, you may have to alter a little bit and try to think what the majority of people would want that are worth maybe $1 - $10 million. Realize that these people want homes for the most part. If you wanted to play this, then purchasing either raw home sites (land) or the finished home may make sense.
Q: Can you give me an example?
A: Sure. In the MasterMind Group, we just introduced a preconstruction property in the North Carolina mountains and we just finished our Boots on the Ground work there. The mountains are certainly a draw to many people. When we first got on location, we saw lots of other properties that looked like nice places that good be purchased for ½ of our target investment. Some of these had great views on nice lots. Quite frankly, we were a bit concerned.
Once we had gone to the property, our |
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