It can be challenging to navigate where to invest your money, especially in the current market.
Most people don’t know that 90% of millionaires used Real Estate to get there. And we’re ready to help you get there too.
We continue our discussion Mike Balchin and Paul Simonetta to discuss your burning questions about Faris Pre-Construction and how we will get our clients the highest returns on their investments. This is part 2 of our 3-part series introducing this new opportunity for investors presented by Faris Team where we answer all of your burning questions about working with us on this exciting deal. If you missed part 1, click here for an introduction to Faris Pre-Con and how it can help you as an investor.
We spoke in our last blog about allowing our investor clients Platinum Access to units before they are available to the general public, and you might be curious as to how we are able to attain this access.
A lot of care and attention goes into which developers we choose to form relationships with. We want to make sure that our investors get the best returns possible. To do this, we look at several factors, such as:
We look at the developer’s history, reputation and past projects, completion rate and quality.
Once we find a partner we want to work with, we look at locations that will yield the best returns for our investors.
We work for the investor, our clients. We do not work for the developer. We do the groundwork to ensure that our clients get the best units for the best prices and help our clients through the process from start to finish. This is part of our mission to provide the Best Real Estate Experience in the world.
Developers, likewise, are looking for good brokers to develop relationships with, so they can get construction financing. So it is still a mutually beneficial relationship. They want brokers who will bring them valued investors who are pre-approved.
Our Exceptional Marketing speaks for itself, and our mission to go full out® for our clients and provide the Best Real Estate Experience is extended into everything we do. We have a solid reputation, and our Pre-Con team has an extensive background in Pre-Construction and has spent that time building those valuable relationships with developers.
Typically, people looking to buy for themselves aren’t interested in Pre-Construction, simply because it can take 3-5 years for the building to be built and move-in ready.
However, Pre-Con is a great choice for investors looking for a great deal at a price that will always hold value. Even if the current Real Estate market is dipping, in 3-5 years, it will be on the upswing again. Pre-Con is an excellent investment with high returns simply because people will always need a place to live, and with the immigration rates higher than ever, those units will always be in high demand.
Typically, you are looking at 15% down, which can be broken down into a couple of deposits, such as:
5% in the first 30 days
5% in 180 days
5% in 365 days
For our investors, we want to negotiate an extended deposit structure with the developer such as:
5% in 30
2.5% in 120 days
2.5% in 180 days
2.5% in 365 days
2.5% in 500 days
This will ideally give our investors a bit more time in their deposit structure.
Once the investor occupies the unit, they will have to pay an additional 5%, bringing the total deposit to 20% (the timeline for this is typically 3-5 years).
Fortunately, since Faris Pre-Con is gaining access in the earlier stages, the developers tend to be more open to negotiations.
What we’re looking for with Faris Pre-Con are those breakout communities. Areas where Toronto is still accessible but have yet to see those value increases seen in the downtown core.
This means looking at market trends, speaking to developers and finding locations that will be valuable within that 3-5 year timeline. We put tremendous effort into scoping those up-and-coming locations with the goal of getting the best deal for our clients that will yield the highest returns.
We ensure that when we vet a project, there will be a return value for investors. For example, a project with no transit access may sell for a great deal, but when the investor goes to sell that unit, they likely will see poor returns due to the lower resale value. We avoid projects like this because getting our clients the highest returns on their investments is our priority. We make sure that the investors can easily sell the product in the future.
Choosing the colours, finishes, decor etc., will happen one year, maybe a year and a half prior to closing. Of course, the developers need to ensure that their standards are maintained, but there are opportunities for upgrades to select finishes.
Faris Pre-Con can also help our investors with this part of the process. We can help provide our Professional Guidance, so if you are looking to resell quickly, those additions may not be needed. As Realtors®, we know better than anyone what features are in demand and where they may or may not be worth spending your money.
Stay tuned for Part 3 of this exciting conversation with Mike and Paul, as we introduce Faris Pre-Con and detail more about risks, exits and ultimately why this investment opportunity will help get you the highest possible returns. Be sure to follow us on social media for our next blog in this series.
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