New Home Investments

New homes attract quality tenants. And with today's builder discounts, new homes attract some serious cash flow, too.

New construction single-family homes can be a very safe and profitable investment when the price is right. These homes require less profit-draining maintenance, attract quality tenants, and have a long appreciation life-span. New homes marketed for lease as Never Lived-In also demand higher rent rates. High market rent is important, though monthly cash-flow is tyipcally a secondary profit source behind appreciation and loan amortization.

New homes are often overlooked by investors, however, because of a higher purchase price. The key to these investments is thus a discounted purchase price.

Buying Low: Builder Inventory Homes and Close-outs

Good timing and a broker with the right builder contacts can yield excellent pricing for smart investors. Here's how: builders look to their top brokers when they need to move homes that are completed but not yet sold. These completed homes are referred to as 'inventory' homes, and we consistently negotiate 10-20% discounts from list price on these properties. This advantage has been amplified in 2009, as more builders struggle with developments nationwide.

Market value is set by the builder in successful tract home neighborhoods. Builders charge a dollar per square foot price (called 'base' price), and then hope to sell buyers on premium-priced upgrades. Since the typical buyer elects plenty of upgrades, average price in a given neighborhood is usually well above base price.

Builders prefer to have a buyer ready for a particular home before they begin construction. Our opportunities arise when a buyer backs out of a purchase after construction has begun, or in the best case, completed. The builder now has a vacant home built per the previous buyer's selections. They want to move it- so we buy it for 10-20% off the typical retail homebuyer price.

Consult a local investment property specialist (that's us) for some legitimate investment guidance.