The preconstruction process is an innovative real estate investment opportunity in which you buy tomorrow's property at today's price. Preconstruction investing is a boon for the investor or buyer as well as the developer or builder. The biggest advantage of preconstruction process is that you can reserve your buy at discounted prices without investing a fortune. You simply have to make a small investment that is as low as 5% of the total cost to reserve a unit and pay the balance on achievement of different milestones.

For the buyer, preconstruction process provides an opportunity to seal a property deal with little margin money and achieve sizable discounts over the tentative price of the finished condos. For the developer it is an opportunity to presale the entire property even without laying a single brick and to procure a construction lending with relative ease.

In the the preconstruction process, property developers place the building plans of a proposed real estate venture for pre-selling. Only thing made available to the buyer are architectural rendering and floor plans of the condominium, town house, or single family residence. The good news is that preconstruction prices are normally at an attractive discount of the proposed sale price of complete units.

In theory, the buyer gets the discount because they displays the grit and tenacity to invest on mere paper and "air". However, in reality, they are getting discounts because the are a crucial piece of the puzzle for the developer because pre-selling of a particular percentage of the total units is a need for getting a prospective lender to fund the construction process.

If you are interested in investing in preconstruction property, you can check out the list of preconstruction offers available in your locality in the newspapers, on the Internet or with your real estate consultant; that is if you have those types of projects in your locale. When you have the list, you can shortlist the offers that are suitable according to your budget and needs. After that you must run a thorough check on the property and the developer on many issues. Certain key reasons are, the going and expected cost of the similar units in that locality; demand supply factors; whether the units are assignable and uniqueness of the property. You must also check for the future or proposed development plans in the vicinity to protect your view. This aspect is important because you might choose to buy an apartment in a preconstruction process at a premium due to the prefect view of lake or waterfront. However, after some time you may find out that another developer is building a project, which may blind your view.

After you have satisfied yourself with the suitability and pricing of the condominium, you can proceed for the reservation. Most preconstruction properties have a nominal reservation amount, which is normally 5-10% of the total cost and can go as low as $1,000. The reservation process has a simple "Intent to Purchase Agreement" in which you hold the right to first refusal. In this phase, you are safe because your money is in escrow account and you can terminate the agreement without any obligation. Of course, the developer is not really

About the Author: Chris Anderson is a leading authority on preconstruction real estate investing. Get his 4 day e-mail course and a 33 minute video free today! Visit http://www.GetPreconstructionProfits.com & http://www.GetPreconstructionDeals.com. In addition, Dr. Anderson is the on-line training coordinator at the Van Tharp Institute, a group that provides world class training for investors and traders.