Newbie needs help with new-home purchase - Posted by Patrick G. (AZ)

Real Estate Investing
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Posted by E.Eka on September 03, 2004 at 11:17:03:

I live in MD, but I’m closing on my condo in 2 weeks in VA.

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Newbie needs help with new-home purchase - Posted by Patrick G. (AZ)

Posted by Patrick G. (AZ) on September 02, 2004 at 18:20:19:

Hi all,

I’ve just turned 22 and I am trying to raise cash to get out of the debt I’ve accumulated while going to school. I’ve read a few books on real estate plus all of the success stories, money-ideas, and how-to-articles on this site but I haven’t had the courage to do anyting yet. I am thinking about buying a new house in a community which is still under development. My plan is once the house is built(this will take around 6 to 8 months) I will sell the house at a higher price (I was told that while my house is being built the houses in the same community will be sold at higher prices causing my house to appreciate 20 to 30k). Has anyone done this before? If so, what should I look for to make sure I am making a sound deal?

Thank you all for the inspiration you provide by pursuing and accomplishing your dreams.

Patrick

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Re: Newbie needs help with new-home purchase - Posted by E.Eka

Posted by E.Eka on September 03, 2004 at 11:15:10:

You said so yourself in your own post. You shouldn’t be looking for ideas, you first need to find some courage.

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Re: Newbie needs help with new-home purchase - Posted by Shawn

Posted by Shawn on September 03, 2004 at 05:21:06:

Also, if you buy a pre-construction in a development, be sure (you have to ask) there is not a required holding period in the contract. A friend of mine recently was trying to go this and the developer had a one year, no sale-no rent clause in the contract. My friend passed. This was in Virginia.

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Re: Newbie needs help with new-home purchase - Posted by Marcus

Posted by Marcus on September 02, 2004 at 23:01:51:

Patrick,

You could do that, but it takes $5-20K in most areas to lock in your pre-construction house. Why not do some creative marketing to find your own personal residence and buy it at a discount? My first “deal” was my own condo, which I found by putting out flyers that said “WANTED: 1 or 2 bedroom condo. I’ll buy in any condition and can close quickly.” I bought my condo for $120K, and that included the seller paying ALL closing costs (which included $1600 in point to buy down my loan rate!). I paid nothing at closing and pulled $13K in equity out of my condo immediately to totally rehab it and put in stainless steel appliances and cool track lighting. So I now owe $133K, but it’s worth $165K. Be careful when everyone tells you about the pre-construction thing - that is SPECULATION. Alot of folks have made money doing it, but I think it’s better suited to folks with cash to put down on those types of deals. If you decide to do the pre-construction thing, just make sure you can get 100% of your money back up until a certain point (many are until construction begins… those are the ones in the DC area at least). Good luck.

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Re: Newbie needs help with new-home purchase - Posted by Patrick G (AZ)

Posted by Patrick G (AZ) on September 03, 2004 at 12:47:08:

Thanks for your reply Marcus. Apparently the deal only requires 1000 to 1500 out of pocket to lock in the price. If the house doesn’t appreciate I can cancel the deal and just lose the 1000-1500 I put down. Are there any contract clauses I should look for besides no rent-no selling for one year after I close the deal?

Thanks