Gulf Coast Pre Construction Condominiums
Like us on Facebook and receive updates on Gulf Coast pre-construction condos
The Alabama/Florida Gulf Coast has seen tremendous growth along its beaches in recent years. Pre-construction investing is the opportunity to join a fellow group of investors to help a developer procure a loan for the construction cost. In exchange, prices are locked-in for the duration of construction and value can increase significantly, especially as the condo takes shape. In many cases, the developer allows contract assignments in which case, the buyer can effectively sell the condo - all during the construction phase. In this scenario, a new buyer accepts the contract assignment and closes at project completion. Any profit realized during assignment is paid to the previous contract holder at closing/project completion. It is important to understand that money does not change hands until the building is completed and the "certificate of occupancy" is awarded to the developer. After this certificate is is obtained, the buyers / owners in the building will start to close loans with the bank and all proceeds come during this process. Also, not all developers allow contract assignments, so it is important to verify this.
Current Alabama Gulf Coast Pre-construction
Phoenix Gulf Shores promises to be one of the most desirable Gulf-front properties in Gulf Shores. With 22 floors housing 80 three- and four-bedroom units, these beautiful and spacious condos boast direct views of the Gulf of Mexico. Property amenities will include and indoor and outdoor pool, hot tubs, fitness center, meeting room, garage parking, tennis courts, and indoor storage for residents. The condos will have 10-foot ceilings, jetted master bathtubs, and floor-to-ceiling glass looking out onto the coast. Large balconies offer the perfect place to watch the waves crash onto the shore. These condos are located in the heart of Gulf Shores, within walking distance to a number of restaurants and shopping.
Phoenix Orange Beach, like Phoenix Gulf Shores, will all be three- and four bedrooms. Phoenix Orange Beach will be a 21-floor building with two floors of community areas and nineteen floors of living space. Situated on a 2.75-acre lot on Perdido Beach Boulevard, residents of the 114 units at Phoenix Orange Beach enjoy 250 feet of pristine white-sand beach just outside their door. In addition to the beach, there will a spacious outdoor pool and lazy river and a heated indoor pool. An 8-story parking garage is available onsite. This latest Phoenix project is slated to be finished by the end of 2016, so now is the time to grab one of these luxurious condos.
Abaco is a state-of-the-art, $15 million project in the heart of Gulf Shores. With 78 Gulf-front units, residents will enjoy breathtaking views of the Gulf of Mexico from inside their condos and out on their private balconies. A zero-entry outdoor pool, indoor pool. lazy river, multi-level parking garage, fitness center, and theater room are just a few of the many property amenities residents and their guests will enjoy at Abaco. The kitchens in these condos have beautiful quartz counter tops, stainless steel appliances, and a pantry. Aside from spectacular views of the Gulf, these balconies come with an electric grill for cooking up some burgers and hot dogs during the summer without having to run all the way to the outdoor common area. Abaco is centrally located in Gulf Shores.
Current Florida Gulf Coast Pre-construction
If you're looking for a beautiful, quiet area to buy a Gulf-front condo in, Vista del Mar is perfect for you! Sitting next to five miles of Gulf Islands National Seashore in a quiet area of Perdido Key, Vista del Mar promises to be one of the most popular condominiums on the Gulf Coast. Choose from a three-, four-, or five-bedroom condo and enjoy a stunning view of the Gulf of Mexico and sugar-white sand beaches that this area is known for. The units will boast stone flooring and 10-foot high ceilings and outdoor gas grills. The beautifully landscaped grounds are complete with covered seating areas and a spacious outdoor Gulf-front pool and hot tub. An onsite club room is the perfect place to hang out and read a book by the fireplace or grab a drink at the bar. This gated community also has an indoor heated pool, yoga studio, children's play area, and private storage for owners. Vista del Mar is close to several popular golf courses and two full-service marinas.
Coquina Caye, currently under pre-construction, is set to be a low-density upscale condominium with fourteen condo units plus a penthouse suite on the top floor. The condo units at Coquina Caye will offer four- or five-bedroom floor plans with private balconies looking over the Gulf. The penthouse on the top floor has 4,325 square feet of living space in addition to a 920-square foot private balcony. The other units range in size from 2,442 square feet to 3,313 square feet with 370-square foot balconies. There will be high-end appliance packages in the kitchens, with granite counter tops in the kitchen and bathroom. Hardwood flooring in the dining and living room along with crown molding are available in all units. Coquina Caye amenities will include indoor and outdoor pools and hot tubs, assigned covered parking, a fitness center, and direct access to the beach.
The Alabama and Florida Gulf Coast Pre-construction Market has been fairly stagnant after the recent problems with the economy. Now that the climate seems to be, once again, on an upward swing, talk of per-construction is circulating. Circa 2005, the average price-per-square-foot was in the neighborhood of $500 - $600. At those prices, it was beginning to get hard to find any room for profit and sales declined or stopped actually. The current square footage price for an average, newer gulf front condo is approximately $370 / ft.
Here are a couple of the current projects and their cost per square foot:
Phoenix Gulf Shores - $450 square foot
Phoenix Orange Beach - $445 square foot
Newer existing Condos
Lighthouse - $370 square foot
Seawind - 360 square foot
(These numbers are approximate and were calculate on 8/11/2017)
As the numbers indicate, the prices for pre-construction differ from existing condos and these simple numbers can be used to gauge the opportunity with buying pre-construction vs existing condos. The rental revenue is another important factor, so we're published revenue information for each condo in Gulf Shores and other markets too.
The great thing about existing Gulf Shores condos for sale is that there's no wait and it's available immediately. When considering pre-construction, the wait for the condo to be completed can be difficult as the anticipation builds. But, during normal conditions, the pre-construction condo will be appreciating, which is profit. In some cases, if structured properly, the buyer can assign contracts and make a profit without ever closing / buying the condo.
There's currently more Orange Beach condos for sale in the pre-construction phase and more room, so Orange Beach will be a good spot to look for opportunities.
Perdido Key condos for sale in the pre-construction phase will typically be larger units and rent-restricted condos is much more common here.
Revenue is an important factor for most owners. We've published revenue info for every condo on the Alabama Gulf Coast and many in Florida. Please let us know if you have questions or would like to discuss this or other info.
Basic Pre Construction Sales Info
- What is Pre-construction? Pre-construction is the opportunity to join a fellow group of investors in an effort to finance the development of real estate. Basically, it's buying a condominium before it's built.
- What are the benefits of buying Pre-construction? The buyer benefits in several ways. First, the lack of mortgage payments while the building is under construction will constitute a profit. The developer offers incentives because sky and paper are harder to sell than concrete and steel. Second, the appreciation that takes place while the building is under construction constitutes profit ( a condominium assembled is worth more than condominium not yet assembled). The property appreciation that takes place while under construction is also significant during an average economy. Finally, the tax benefits and lack of out of pocket expense due to the financing methods available make this the best investment real estate has to offer.
- How do I reserve a condominium? A simple reservation agreement can usually be signed with a letter of credit typically ranging between 20% - 30% .
- What is the letter of credit? A letter from the bank stating the recipient is capable of buying said condominium. The L.O.C. can be the collateral using most anything of value.
- What does the letter of credit cost? A lending institution will generally charge 1% annually for the amount of the letter.
- Must I use a letter of credit for reservation? No, cash payment may be substituted for the letter of credit.
- Do I earn in tersest on my cash deposit? Yes, the funds are invested in a pass book account. Any interest paid on the account is applied to the purchase.
- Who holds the deposit money? An escrow agent of the developer holds the money. (Usually a title company)
- What format of the letter of credit is used? The developer generally provides a format for the letter that must be used.
- What is hard contract? When enough units are sold and the developer is applying for a construction loan, you will be asked to go to hard contract. A hard contract is the binding agreement that converts the reservation to a sale. When the contract is signed, generally you have 7 days to review the offering and make your decision in proceeding with the purchase. (Note) There will come a time, during the offering, that you will go directly to hard contract. This usually happens after some short time during the selling process.
- When does the construction start? Construction will commence once the developer has sold a number of units (usually 80-90%) and will fund the construction loan.
- What does need not be built mean? This means the developer is allowed to pre sell the condominium, which has not been constructed. It also means that it may not be built if all permits and approvals are not met. In this unlikely event, the purchaser is protected under law.
- What happens if the building is not built, at no fault of the purchaser? Your deposit will be refunded with interest or your letter of credit will expire and not be called.
- How long is the construction period? Generally, it takes 1.5 to 2 years to complete.
- How much profit should I expect? It depends on the general market conditions, interest rates, and competition. In the past few years, profits have ranged from $10,000 to $50,000 on average, peaking at over $100,000.
- Can I sell before closing? Yes, in which case, the developer allows a new purchaser to take over your contract. The new purchaser must come under the same pre-construction purchase and escrow agreement as the first buyer.
- What happens if I sell my unit prior to closing? The developer will collect a deposit from a new purchaser to assume the existing contract. The new buyer then steps into place to close and your deposit will be returned with interest.
- Do I have to close on the unit if I have not sold it prior to closing? Yes, if you choose not to sell your unit, you are expected to close.
- Can I reinvest my 1031 into Pre-construction? No, because of the length of construction for a condominium, the guidelines for the exchange are not met.
- Are there any costs related to the sale? Yes, you will be responsible for some closing expenses such as title insurance, funding of the association, insurance, reserves, etc. These charges will be outlined in a Good Faith Estimate provided by the selling agency, and in the developers offering statement.
- Are there any other contingencies, such as financing? No, the sale is not subject to financing.
Information is deemed reliable but not guaranteed. Pre construction is "Need not be built".
The data relating to real estate for sale on this website comes from the Baldwin County Association Of REALTORS®. The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information deemed reliable but not guaranteed.