The benefit of buying in bulk.
August 15, 2007 | Filed Under Real Estate Investment
So you just bought a great condo in a new development. You think you got a great deal. You bought pre-construction when the prices were low (and yeah, non-negotiable) and you know that you would still make a decent profit if you sold today. You are feeling pretty good until you meet your new neighbors in the hall, who you soon discover, also bought at pre-construction prices, but somehow paid 5% less per square foot and got a year paid condo fees from the developer. All you can think about between small-talk tidbits about the weather is how fast you can call your Realtor to give him or her a mouthful.
As it turns out, your Realtor was right; the price for YOUR condo was non-negotiable. Pre-construction pricing is almost always non-negotiable, but it is also almost always far lower than the price once completed. Buyers get a bargain price because they accept a certain amount of risk that a post-construction buyers don’t. So how did your neighbor’s Realtor negotiate? By thinking big.
When you purchased your two-bedroom condo for say, a wee $650,000, you thought you were an important client for the developer. Well, you weren’t as important as your neighbor, who purchased five units in the building. He got the discounts because while you were a $650,000 deal, he was a $3.25 million deal. For the developer, a big freaking fish.
Don’t worry if you don’t have the cash to buy in bulk. A good Realtor has a list of clients interested in purchasing in pre-construction buildings. If four or five people from the list buy at the same time, chances are the developer will take notice.
If you are interested in joining The Bushari Team’s list of interested pre-construction buyers, please e-mail Elad at elad@bushari.com.
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Sure, you can buy in bulk with other partners, but having other parners can also be a nightmare. For example, let’s say that you want to resale the property, what about if you and your partner doesn’t agree in the selling price? I have a client that is having that problem. Just want to advice to be sure who your pinvestment partner is before investing.