4 Tips To Help, So Your Condo Flipping Isn’t a Flop
If you’re considering flipping presale condos in BC, the first thing you need to do is “pre-construction condo flipping,” is termed as Assignment of sale in the world of presale real estate
Read More about Assignments here
What is Presale Condo Flipping?
Presale condo flipping is a process of making profit on selling purchased properties of currently in-construction building developments before they’re delivered and occupied.
The profit is usually made by being the first buyer of the available units for the future condos, having certain knowledge that demand for the condo development will be exceeding its supply in the near future, and than turning around and reselling those units at higher price.
What is Presale Condo Flipping?
- The major reason people do assignments is because they want to profit off through the sale of their condo
- The might have had a change of heart about where they want to live
- They found out that they can no longer afford what they originally planned on buying because of their mortgage not getting a firm approval
4 Tips That Help With Presale Flip
1. Plan the Timing of the Flip
Presale condos are not built yet, so they are not tangible, unlike buying a house or land. You are buying based only on a floor plan without seeing the finishes, the layout or outside view of the building. All of the measurements that the developer provides you are estimates and subject to change, so you’ll never be 100% sure of what you are purchasing.
2. Calculate Return on Investment
There are a number of calculations that go in while determining how much profit you’re are going to make from a presale condo flip. There’s assignment fees, realtor fees, GST+ HST that help conculde the price of your presale condo investment.
A realtor that knows the pros and cons of flipping a presale condo at the right time are hard to find, so do your research or contact us and we can get you in touch with a presale expert for your market
TIP: GST/HST is payable by the assignee on the assignment fee and the amount attributable to the deposit that was paid by the assignor to the builder of the property
3. Plan for different Potential Exit Strategies
The goal of the flip is to sell it fast and make a profit. However, there are a few things out of your control when renovating that may change the outcome
Reaching out to independent money lenders, preparing to ask family & friends for help or selling any asset that can pay for the completion cost of the presale project are some of the strategies that people opt as their exits
4. Work with a Realtor That Know the Local Market
Talking to a professional real estate agent in your local market is very important to ensure that you make a profitable flip. Don’t hesitate to ask your real estate agent a lot of questions about selling the property. Underestimating your area’s closing costs is a mistake you’d not want to make. If you are not planning on conceding closing costs, surveys, and repairs, it can eat a big chunk of your potential profit.
Successfully flipping a presale condo is not as easy as one might think. Unless you’re in the business and have experience, you’re going to need help from a pre construction professional at some point.
However, if you work with the right team, there’s no reason this can’t be done.