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
Currently under construction, Phoenix Orange Beach II is located just 1 mile west of Perdido Pass Bridge and centrally located in Orange Beach close to shopping, dining, and entertainment. The 26-story complex will offer a great amenity package including a beachfront pool & lazy river, indoor heated pool, hot tubs, fitness center, conference room, and climate controlled storage units. Units are available in three- or four-bedroom floor layouts featuring floor-to-ceiling windows overlooking the Gulf of Mexico and of Perdido Pass. Completion date planned for September 2020.
Phoenix Gulf Towers is the latest condo project by Brett Robinson developers. The proposed development will feature two 26-story towers on beachfront property in west Orange Beach between Sugar Beach and Palm Beach condominiums. The complex will offer a total of 192 gulf-facing units ranging from 2-bedroom to 4-bedroom layouts. For more info about this development, please email firstname.lastname@example.org.
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.
Current Perdido Key Pre-construction
16581 Perdido Key Dr | Perdido Key, FL 32507
Perdido Key's newest pre-con project, Azura Key is an exclusive upscale development offering only 15 gulf front condos. Each unit will feature 5BR/4.5BA layouts with private elevator entries, floor-to-ceiling windows, quartz counters, wet bar, porcelain tile flooring, and S/S high-end appliances. Azure Key amenities will include a beachfront pool, heated indoor pool, HD theater, fitness center, commercial ice machine, and climate-controlled storage units. $25,000 reservation deposit to hold unit.
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.
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
865 Scallop Court | Fort Walton Beach, FL 32548
Luxury condominium Blu is Okaloosa Island's newest condo development in almost 10 years. Currently under construction, Blu is a highly sought-after beachfront destination with half of its units already sold. These four and three bedroom residences will feature upscale appointments such as quartz countertops, designer cabinetry, gas range, stainless steel appliances, and porcelain tile floors. Blu amenities will include resort-style pools, jetted spa, gulf side fire pit, grilling area, and a modern fitness center. List prices for units range from 750K to 900K.
The Henderson Lofts
2705 Scenic Hwy 98 | Destin, FL 32541
Construction is currently underway for The Henderson Lofts and is scheduled for completion during the late fall of 2017. The Henderson Lofts is a 54 unit luxury residential condominium located inside the widely popular Henderson Beach Resort in Destin, Florida. All residents and guests will have access to the amenities offered by the Resort including several pools, a lazy river, on-site restaurants, a luxurious spa and exercise facility. Prices of units will begin at $300,000 and buyers can select from one or two bedroom floor plans.
134 Norwood Dr | Miramar Beach, FL 32550
Villa Burago will offer luxurious gulf front residences with Italian-influenced architecture and design. Nestled on 75 feet of private beach along the Emerald Coast, these upscale condos will feature spacious open plans ranging from 3,000 to 3,500+ square feet, travertine flooring, custom cabinets, high-end appliances, gas fireplaces, and frameless glass showers. Villa Burago is minutes from the heart of Destin, renowned golf courses, premium shopping outlets, and popular restaurants.
Current South Walton & Scenic 30A Pre-construction
Thirty-One on 30A is one of South Walton's newest upscale developments set on 335 feet of prime beachfront along Hwy 30A. This condominium will offer luxurious residences available in 3BR/3.5BA layouts or 4BR/4.5BA villas starting at $2 million and above. Each condo features generous open living areas ranging from 2,562 SF to 4,539 SF. Appointments include quartz countertops, hardwood/travertine flooring, Wolf & SubZero appliances, wet bar & ice-maker, and private elevator entries. Construction is scheduled to be completed by the end of Summer 2018.
Costa Blanca 30A
4461 West Highway 30A | Santa Rosa Beach, Florida 32459
Costa Blanca will feature 14 gulf-facing residences set on 200 feet of private beachfront. These condos will offer a contemporary coastal design with upscale furnishings such as Wolf & Sub-Zero appliances, exposed wooden beams, quartz countertops, panoramic floor-to-ceiling windows, and oversized terraces. Costa Blanca will be comprised of three to five bedroom spacious floor plans with some units featuring media rooms. Amenities will include a resort-style pool & deck, fitness facility, private owner storage, and underground parking. Currently, 3 units remain for sale with backup reservations being accepted.
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
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. Please contact us at firstname.lastname@example.org for pre-construction prices and additional information.
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? 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".