Gulf Coast Pre Construction Condominiums
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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
25610 Perdido Beach Blvd | Orange Beach, AL 36561
Atlas is the newest luxury gulf front condominium in Orange Beach, AL. This state-of-the-art complex will offer 38 exclusive gulf front residences and upscale amenities similar to Turquoise Place. Please contact us at email@example.com for pricing and more information on Atlas pre-construction.
Phoenix Gulf Shores II
TBD East Beach Blvd | Gulf Shores, AL 36542
Newly announced Phoenix Gulf Shores II will be built along East Beach Blvd in the heart of Gulf Shores. Amenities will include a beachfront pool, lazy river, indoor heated pool, hot tubs, fitness center, conference room, and climate controlled storage units. Units are available in 3- and 4-bedroom layouts featuring floor-to-ceiling windows with fantastic views of the Gulf of Mexico. For more info about this development, please call 251-504-1121 or email firstname.lastname@example.org.
Phoenix Gulf Towers
23008 Perdido Beach Blvd | Orange Beach, AL 36561
Phoenix Gulf Towers will feature two 26-story towers on beachfront property in west Orange Beach between Sugar Beach and Palm Beach condominiums. The complex will hold a total of 192 gulf front units and offer 2-, 3-, and 4-bedroom floor plans. Each tower will have separate amenities including an outdoor pool with lazy river, indoor heated pool, hot tub, fitness center, owner storage closets, and multi-level parking deck. The west tower is currently under construction.
903 W Beach Blvd | Gulf Shores, AL 36542
Currently under construction. Sea Glass will be a low-density resort sitting on 1.8 acres of gulf front property! Desirably located in the West Beach area of Gulf Shores, Sea Glass will offer 51 well-appointed units to be built in two phases. Select from 1- , 2-, and 3-bedroom layouts. Units will boast modern features and professionally designed interiors with optional furniture packages. Sea Glass amenities include a zero-entry pool, splash pad, hot tub, outdoor grilling area, and covered parking spaces.
TBA | Gulf Shores, AL 36542
We are now taking reservations for the highly anticipated pre-construction condominium, Kiva Beach. This luxury gulf front resort will be located directly on the sugar white beaches of Fort Morgan. For more information or inquiries, please call 251-504-1121 or email email@example.com.
Kiva Village I & II
7861 Kiva Way | Gulf Shores, AL 36542
Kiva Village I & II is under construction in Fort Morgan. Please contact us to schedule a viewing of the model unit or for any inquiries, 251-504-1121 or email firstname.lastname@example.org.
Beach Village Resort
23105 Perdido Beach Blvd | Orange Beach, AL 36561
Currently under construction. Beach Village Resort is a planned community that will sit just north of Perdido Beach Blvd in the heart of Romar Beach. The 12-acre residential development will consist of 67 coastal cottage homes and offer deeded beach access (directly across the street), zero-entry resort pool, lazy river, cabanas, and access (via boardwalk) to Hugh S. Branyon Backcountry Trail.
Current Perdido Key Pre-construction
Krystal Key Beach Resort
16567 Perdido Key Dr | Perdido Key, FL 32507
Krystal Key will be a luxury gulf front resort located directly on the pristine beaches of Perdido Key. The building will feature just 30 units in 4-bedroom/4-bath floor or 5-bedroom/5.5-bathroom floor plans. Amenities include indoor/outdoor pools, lazy river, gulf front fitness center, wet/dry saunas, owner's storage, reserved parking, outdoor grills, and pet walk area. Units pre-selling now from $1,395,000 to $2,995,000.
Portico at Perdido
14701 Perdido Key Dr | Perdido Key, FL 32507
Breaking ground soon. Portico at Perdido is an upscale low-density development offering 27 gulf front residences. Select from 3, 4, and 5-bedroom unit layouts with living areas ranging from 2,472 to 4,226 square feet. Portico will offer fantastic amenities including an elevated infinity-style pool, indoor heated pool & spa, beachfront fitness center, reserved garage parking, and climate-controlled owner storage rooms. Units are pre-selling now starting at $1,300,000.
La Vista will be a one-of-a-kind residence on Perdido Key's exclusive beachfront. This luxury tower will offer just 19 units with features like no other including a Dynamic Glass intelligent window system, "City Lift" parking, and first class amenities. Pricing begins at $2,545,000 and up. Please email email@example.com for more information including reservation agreement and availability grid.
Current Destin & Fort Walton Beach Pre-construction
St. Kitts at Silver Shells
15600 Emerald Coast Parkway | Destin, Florida 32541
Please contact us for more information firstname.lastname@example.org.
Parkside at The Henderson
XXX Henderson Resort Way | Destin, FL 32541
Please contact us for more information email@example.com
Current South Walton & Scenic 30A Pre-construction
Please contact us for more information firstname.lastname@example.org.
Current Panama City Pre-construction
Calypso Tower III
Front Beach Rd | Panama City Beach, FL 32413
One of Panama City Beach's popular condo developments is expanding to include a new 250-unit tower. Calypso Resort is currently developing Tower III, a 22-story high-rise offering well-appointed condos and an excellent amenity package rivaling the resort's other two towers. The complex is set in a highly desirable stretch of Panama City Beach and walking distance to restaurants, amusement parks, and well-known entertainment and shopping district, Pier Park. Panama City has not seen any major condominium developments since 2008, Calypso Tower 3 is a highly-anticipated project for the area and has a target completion date for Spring 2019.
6161 Thomas Dr | Panama City Beach, FL 32408
*Postponed* Palace Sands is an upscale condo development planned to be built on the pristine shores of Panama City Beach. This high-rise will offer two- and three-bedroom luxury units with spacious 30' wide balconies overlooking the Emerald Coast. Palace Sands is located on the quieter east end of the city just 2 miles from famous St. Andrews State Park.
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.
- 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? Signing a reservation agreement with a deposit. Typically, it is a small deposit such as $25,000, then upon hard contract, 30%-100% of the purchase price is due with 30-60 days. The reservation agreement will provide details on the financial schedule.
- Do I earn in interest 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). In some cases, the developer is allowed to use all or a portion of the earnest money to fund construction.
- 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 2.5 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 $100,000 or higher.
- 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".