Emerging PreConstruction Markets - Where to Invest

“Where's the next HOT Market?”

Once you know how to invest in PreCon, you will quickly discover that investing EARLY in a hot PreCon market just as it begins to boom can give investors a significant advantage. Even when real estate bubbles pop or the national real estate market cools or mortgage rates rise to astronomical levels, there are ALWAYS local markets somewhere that are booming. PreConInvestor.com is constantly researching local markets across the nation and measuring key leading indicators in order to identify markets just as they beginning to experience significant price appreciation. When you invest early in emerging markets, you enjoy these advantages:

Less Cost/Risk & More Reward

• Lower reservation fees and lower purchase prices means that you can tie up more real estate with less cash.
• If you choose to purchase you can do so with smaller loans and less costs/higher cash flow if you hold or rent the property.
• There is also less market risk early in a boom because you are investing long before a bubble, if any, can start to form.

More “Investor-Friendly” Environment

• Low or no development investor caps
• Fewer rent or flip restrictions
• More generous contract assignment and purchase cancellation policies

Boom markets historically appreciate…have often continued to appreciate for a number of years before they correct or go flat, so it’s not an absolute necessity to get in on the very bottom. However, over time the reservation fees required often escalate in an emerging market from one to five thousand dollars to 10-20% during a full-throttle boom, and investor caps or prohibitions and ownership restrictions are imposed by developers and builders. Therefore, your costs, risk and difficulty in finding suitable property all increase over time.

We have several markets now on our watch list, and we use a market timing system that has proven to be about 80% accurate over the past 15 years. When we see leading indicators start to spike, such as sales, building permits, school enrollments, etc. , we know that prices are next. When the leading indicators swell to the point where the market is about to explode and the timing system we use flashes BUY, we let you know. Builders and developers are often caught off guard and can’t keep up with the sudden demand and begin to raise prices very quickly.

Example #1: In early 2005 many builders in Salt Lake City were in financial distress and some had gone bankrupt, only to see a sudden explosion in demand. Investors who used the same timing system we use were able to reserve beautiful homes on large lots with mountain views for as little as $500 at prices of around $180,000 in January, 2005, only to see them appreciate to about $260,000 six to nine months later during construction. That’s gross equity of $80,000 on real estate that was only $180,000 to purchase. Those investors who reserved 10-20 properties through the use of PreCon Lenders who offer 100% non-owner occupied financing are now millionaires. Those who held the properties for rent did so with positive cash flow and have realized even more equity.

Example #2: In mid-2005 a home was reserved near Myrtle Beach, South Carolina, for $237,000 and appreciated to $302,000 in 5 months. That’s $65k in gross equity. Shortly after this investor made the reservation with the Nation’s largest home builder, they published this a no-investor policy. The investor was exempt because he had entered into the agreement before the policy, identified himself as an investor, and purchased the property with an investor loan using the builder’s lender. The investor could then sell the property to homeowners or investors who couldn’t otherwise get into this exclusive golf club community.

Should be Markets that have experienced huge booms in housing prices often become unaffordable to the masses, and then transition into a condo boom. Properties in emerging condo markets can often be reserved for buildout times as long as 2 years.