Most efficient way for RE--from miat42

Comparing long term buy and hold, rental property, and momentum flipping, I feel that the most efficient way to make money in real estate is pre-construction flipping. I am not sure how many people think that way. I know it's not a good time to discuss about this method and definitely not a time to use this method. But when the market is rising, this is the best method.

1) Low risk: Preconstruction sales usually require small reservation deposit, therefore locking the discount price with small money. It allows time for you to see if the condos will be rising before a hard contract must be signed.

2) Usually by the time a hard contract must be signed, you've already seen the appreciation has taken place. Even if you close by the end, you can usually resell with a profit.

3) Due to the smaller deposit, this plan may be able to be carried out sequentially or concurrently on multiple reservation contracts, maximizing the leverage ratio.

4) Immediately sell after model is sold. I learned this from an experienced flipper: Always hold till the model home in the community is sold by the builder, then sell immediately. Then you can most likely avoid bad timing. No guarantee, but good experienced.

Lesson is:

1) Find exclusive opportunities to sign reservation contract only. So, if the deal is not good, you can easily exit.

2) Make sure do more deals when timing is considered right, then keep holding time no longer beyond the closing time, quickly sell them after close for profit. You take whatever you profited. Don't be greedy.

3) Strictly separating long term hold and rent properties from flipping properties, mixing them up may result in bad timing consequences.