Invest

Return on Investment:

Your annual ROI can total between 20 and 25% of your initial investment due to deposit structuring and leveraging. What does that mean?

When purchasing a home, you typically commit 20% as down payment. When houses are now in the millions, not everyone has the financial flexibility to cover the initial cost. This is where deposit structuring comes in with pre-constructions, where essentially, down payment is paid in stages instead of all at once. The stages often occur in 2.5 or 5% installments at 30 days, 60 days, 90 days, and the remainder at occupancy. This gives you flexibility and control over your finances while you reap the benefits of real estate appreciation and leveraging.

When investing in stocks, you typically pay 100% of the value up front. With leveraging, this is not the case in real estate. For example, if you buy stocks worth $1,000,000 and your investment increased by $100,000, your return is 10%. However, if you buy a house worth $1,000,000 and your investment increased by $100,000, your return is 50%! Why? Because your initial cost is only the 20% down payment. The return gets even better with pre-construction due to the deposit structuring mentioned above. But what about the mortgage?

First and foremost, no mortgage is required during construction. Many are unaware that you do not require a mortgage until you close. This means that your deposit is the only expense you will incur over the 3-4 year construction period, while you benefit from the growth in equity. Once construction has finished, you have the flexibility of leasing the property for a positive monthly cash flow.

Others:

There is a whole spectrum of other benefits in investing in pre-construction such as builder incentives, long term financial security, and tax benefits.

As an investor in pre-construction myself, did I convince you took look further into this opportunity? If so, contact me. I have access to exclusive listings and new constructions that are coming up on the horizon. Let’s discuss what options are available on the market.