How To Buy Investment Properties At Below Market Price

So imagine this. You heard of a developer that is going to launch a new project. After doing your due diligence and researching all the facts about the project, you come to the conclusion that this is definitely a good investment propery. You expect the project to appreciate in value and you can make money as soon as the project is completed or even sooner, by selling to the secondary market, assuming you don’t decide to rent it out for income.

So bright and early on the day when investors and buyers flock to the developer’s office to get their hands on the offer you arrive to find many other people there, all equally enthusiastic about the project.

And because the number of available units is limited, you find yourself having to fight with these other people just to buy a unit. In all likelihood, you probably end up paying more than you intended to in the first place, which breaks the #1 rule in property investing which is to always buy below market value.

The worst part is that the developer is the only party here to profit massively from this frenzy buying situation because they are the ones holding all the power. They get to dictate the price and set the bar high because demand is so high.

So why not turn the tables on them? Why not, instead of fighting with all these other investors, you all come together and work as a team? You approach about 5-10 other people who are interested in buying investment properties in that project and you then approach the developer collectively as a team. You tell the developer that all of you are interested in purchasing one unit or more each, as long as the price and terms of purchase is right.

This way, you take the power out of the developer’s hands. You get to dictate the price and the terms that you want to purchase your investment property.

This is called group or bulk purchase. And get this – developers love this.

When they see a group of people approaching them to buy a whole bunch of units, they are happy. Because they don’t have to work hard and spend perhaps an hour or two with just one interested party to sell one unit. With a group deal, they can easily clear off 5-10 units at one go.

Perhaps they will have to sacrifice a little in terms of price, but as long as they can push off the units on their hands, they are happy. Their offers prices are already way above the cost of the unit anyway, so if at the end of the day they get a narrower profit margin, they won’t complain.

Besides, when people approach them in a group, it usually means that they are already keen on the purchase. Developers won’t need to work very hard to convince these people on the value that they are getting from their investment.

So at the end of the transaction, investors get to purchase their investment properties at lower than the offered price, developers get to sell more units and everybody is happy. It’s a win-win situation for all.

The next time you attend any property related event like seminars or open houses, network and get to know other people. Any one of them could be willing to work with you to get better deals when buying your next investment property.

Milan Doshi holds regular talks on the topic of investing in property. If you want to know what to invest in property, then come to his Property Intensive seminar organized by Wealth Mastery Academy that has helped opened the minds of many to the opportunities available in property investment.