Pre-construction Condo Downpayment financing

[Rany Youssef]

Hey guys, basically I'm thinking of putting a downpayment on a pre-construction condo. I've done my homework, its in my target market, I know the builder is very reputable and also the area is perfect. What I'm planning to do is sell it as soon as its ready (in about 3-4 years) or assign it before it is completed. That being said I don't have the cash to workout 5% in a month and another 5% in 3 months as I'm still in school and not working full time. Any advice on financing this?

Thanks a lot for your help!

[David Steinbok]

Hi rany. I worked in construction in Toronto for 18 years. Mainly building new condos. Who is the builder. I was lucky enough to build the sales centers and the builders even gave us a 10% discount. Great I thought, so I bought 2 condos in a fancy tridel building. 2 and a half years later I rented both. Took a day. 25 applicants. 1 bedroom rented for 1550 and 1 bed plus den for 1800. Value of condo went up 65k by the time I closed. Only issue was that mortgage, ins, tax and maintenance fee I was short about 600 mth on each. I couldn't get more for rent because tridel had about 50 units they were renting in the 2 buildings for same price. After meeting other investors I decided to sell in favour of duplexes. But there were 75 other 1 bedroom units for sale at same time. Everyone was cashing out who was a speculator. Took me a year to sell both apts. 

I learned not to buy condos, all my properties must have positive cash flow, and having a developer hold my deposit for 2 years, I could use that money to earn more money.