Nearly everyone seems to assume the market has put up a permanent
�out of order� sign. We all assume we won�t ever make money on real
estate again. BUT, we�re all wrong! Numerous chic and upscale
neighborhoods stopped building as the market began to falter, and since
then, those �half-built� homes have been purchased by investors who were
hoping to eventually sell the home once it was finally built for a very
large profit.
When it became clear that the bulk of people who were commissioning new
construction homes to be built were investors and there were not a lot
of buyers, the entire market crashed. Investors lost money and many
developers went out of business. They had a lot more homes in their new
subdivision for sale than there were buyers. On top of that, they owed
banks money for financing the subdivision. Pretty soon, banks took over
these areas, which are located throughout the United States and
particularly in Florida, California and Nevada. These areas were booming
in the 1990s and then crashed.
There are many homes in these upscale neighborhoods that are in the
process of construction. When the builder went bankrupt, the
construction was put on pause. Banks took over but have no interest in
getting these properties constructed. They are simply looking to get
their money back.
If you know about new construction or are in the trades, you can buy one
of these fractionally constructed homes for a fraction of their cost and
finish the construction yourself. You have to be careful, though, that
you understand what you are getting into.
You will have to know about building rules and make sure that the home
is completed in agreement with the codes. In addition, you should also
be aware that some municipalities have ordinances that require that
construction be completed within a specified amount of time. If the
house has not met that specification, there may be fines associated with
the property. A title search will allow you to discover if there are any
fines that have been levied against the property from the municipality
for non completion of construction.
On top of doing as much of the work on your own, you can also find labor
fairly inexpensively throughout the United States. The trades were hit
hard during this recession and there are many people who are experienced
in all aspects of home building that are out of work. Many small trade
companies have even gone out of business. You can find cheap labor to
help you finish the construction of your house.
Buying new construction is usually a way to make money in real estate
during any type of market. But even in this recession, you can buy
partially constructed homes, finish them and then get prepared to sell.
Although you may make a small profit selling the home after construction
is completed, you can make an even larger profit if you look for the
long term investment and wait until the market turns around.
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