Share
The Evolution of Real Estate Investing
Pre-Construction Purchasing

The past decade has seen a global shift of small and large scale investors revising their investment strategies from bits and bytes to something more concrete, real estate.  This is largely, if not entirely, down to the internet tech stock crash.  The result was one of the largest worldwide real estate booms in history. 

Developers had a hard time meeting the demand for condos and apartments and often sold their projects at pre construction prices at substantial discount prices to buyers. It was a win win situation. All the buyer needed was a 10 – 30% down payment and the developer had pre construction contracts to present to the bank, thus proving there was a market, qualifying them for construction loans.  Unsold pre construction units could then be sold on completion at high prices.

Sometimes the pre construction deposits were held in escrow but in some cases the developer was free to use the down payment as operating capital.

This was risky for the buyer as their down payment could be lost if the project was not completed. Majority of the time this did not happen and the buyer reaped the rewards of taking the risk by realizing big profits from buying at pre construction discount prices.  It was not uncommon for the buyers to sell the contract on to another buyer prior to completion of the project and before the balance to the developer was due to be paid.  These risk taking buyers achieved substantial returns on a mere 10 – 30% leverage.

Bulk Pre-Construction Purchasing

The real estate and pre-construction buying boom of the last decade created another metamorphosis called bulk pre-construction buying.    Innovative developers and investing institutions combined forces and came up with another way to help themselves and buyers at the same time. 

The investing institutions buy blocks of properties from a developer at a greater discount than the normal pre-construction prices.  The developers were willing to do this in order to achieve faster sales and avoid having to sell units individually thereby reducing marketing costs.

Again, this facilitates financing for the developer and allows them to complete projects more quickly. The substantial bulk discount price that the investing institution achieved is passed on to buyers who can now purchase at even lower prices than if they had bought directly from the developer. 

The investing institution makes a profit, the buyer makes a saving and the developer has sold his units without incurring the expense of real estate brokers.  The risk for the buyer is reduced as the developer has money in hand to complete the project. 

The Axiom Way

Enter the company Axiom Realty Capital.   Axiom has taken all the benefits of bulk-pre construction buying and made it even more attractive with their system.  The few loose ends of risk that are not covered under conventional bulk pre-construction  have been neatly tied off with their ingenious system. 

Market Value

With a normal bulk pre-construction purchase the buyer has to select the property and do some research to find out whether the purchase price is in fact a good deal and below market value.  If you are looking to buy in an area where you live and are familiar with real estate prices and trends that is no problem.  But what if you want to expand your real estate portfolio and invest in another location that you are not familiar with?  This is taken care of by Axiom.  They use their extensive resources to do market research ensuring that you receive below market value discounts. They check that the market trend in the area is positive and not negative during their buying and sales cycle and your buying cycle.

They have a big stake in the purchase also because they will buy a large amount of properties from the developer and will have to resell all of them.

They do not want to be caught with inventory in a down cycle, so they will mitigate all their risk and yours at the same time.  The target that Axiom shoots for is the following:

Contract Signing:  15% above market
During Construction:  20% above market
Total Investment Return:  40%-90%

Subscribing Is A Good Idea
Name:
Phone:
 * Email:
You Want More?  We've Got More - SUBSCRIBE - - -   -  Get a free trial subscription, no hassel unsubscribe. Articles About  Living & Investing Overseas Appear Monthly In Our  Magazine - EFAM - Escape From America Magazine, the Expat Magazine for those who want to move overseas, and those who have. - It's the international lifestyle magazine that provides real information on what it takes to live abroad, including articles on International Relocation, Overseas Retirement, Residency, Privacy, 2nd Passports, Jobs Overseas, International Real Estate
Deposit Security

Remember, when pre-construction purchasing and bulk pre-construction purchasing, some developers will use that deposit money for running their business and some will put that money in an escrow account depending on the contract that the buyer has with the developer.   With Axiom’s bulk purchasing power, they negotiate with the developer to put all deposits in a third party escrow account until completion of the project.  This completely eliminates the risk of the buyer losing the deposit money if the development company goes bankrupt before the project is complete and you have a title to a property. 

Leverage

Because of the discount price that Axiom secures initially and the option to re-sell the property before construction is complete (ie: before you need to come up with the balance), a 10% deposit will leverage potential substantial profits.

For example, a 10% down payment on a property priced at $500,000 means you will need to deposit $50,000 in a third party secured escrow account.  The value of the property initially will be a minimum of around $588,000 due to the Axiom 15% purchasing discount. 

In other words, the condo next door to the one that you purchased, which was not a part of the Axiom Block is selling for $588,000. 

So if you decide to pre-sell during the construction process, which is usually a minimum of 18 months, you could make a total profit of $88,000 fairly quickly.  Now the beauty of this scenario is that you only used $50,000 down to net a profit of $88,000.  Remember what makes this valuable is that the market research effort of Axiom has taken out as much risk that is possible in a real estate investment, so your chances are very good at making these returns.

No Loss…Only Gain

Here is another incredible advantage by buying with Axiom.  Because of the bulk purchasing power of Axiom, they have also negotiated with the developers a major deal.  If the property that you purchased for some reason has a market downturn, the developer will lower the price of the property that they sold you to match the market. In other words, they insulate you from any downturn.  Nowhere else in any investment opportunity, real estate or other sector will grant you that protection.  So if people are selling that $500,000 property that you bought for only $450,000, when it comes time for you to come up with the balance when the construction is complete, the developer will only ask for $450,000 and not the $500,000 that you bought it for.  It does not get any better than this.

Track Record

Axiom is not new to this business. They have many successful bulk buying projects behind them which are listed on their website, where you can read more information on the company and more detail on their system.
 

International Real Estate Marketplace - Overseas real estate worldwide. Buying international real estate: The rules & regulations for buying real estate varies from nation to nation.  You will find numerous articles on buying real estate in our article index listed above. We also have a large International Real Estate Marketplace with properties listed worldwide.  The listings have color photos, descriptions of the properties and contact information. Are You Looking For Overseas Real Estate? If not, you should be; it is a powerful safe haven for moving your assets offshore and it's legal to do so. - There are still millions of great bargains in International Real Estate - - Real Estate in many nations is a parallel market. The world no longer moves in lockstep with one dominant nation. Real estate in foreign nations cannot be confiscated by the US Government. The EscapeArtist Real Estate Marketplace is updated 24 hours a day, 7 days a week. Current listings with color photos from around the world - Find Your Overseas Real Estate Bargain.
Real Estate Article Index
Living Overseas This Issue Of The Magazine
Expat's Relocation Library Expat's Conversion Engines
Partner With EscapeArtist Advertise With Us Share
Add URL | Home | Site Map | International Relocation Reports | Contact | Advertising Send This Webpage To A Friend | Escape From America Magazine Index | Offshore Real Estate Quarterly | International Telephone Directory  | About Escape | Embassies Of The World  |  Report Dead Links On This Page| Maps Of The World | Articles On This Website | Disclaimer | Link 2 Us | Help | Jobs Overseas | International Real Estate | Find A CountryExpatriate Search Tools | Expat PagesOffshore InvestingYacht Broker | Terms of Service
© Copyright 1996 -  EscapeArtist Inc. All Rights Reserved