Although the preconstruction real estate investing option has been around for years, it just recently became mainstream and real estate investors all over the world are scouring the web for the best preconstruction real estate projects in areas where real estate prices are skyrocketing (Orlando, Miami, Las Vegas, Myrtle Beach, Ft. Lauderdale, etc). While the sudden increase in demand has influenced many legitimate developers to offer more projects and developments, it has also seen the emergence of many ill-prepared developers in the industry. Here are just a few ways you can properly screen your preconstruction real estate developer and make sure you are not signing with a fly-by-night developer:

1. Research Past Projects - If the developer has had huge delays in past preconstruction projects, it will probably happen in the next several projects. Remember that your time is money - even if you get your full deposit back 2 years later, because of constant delays you may lose hundreds of thousands of dollars worth of wasted time.

2. Find a Preconstruction Brokerage - Unless you are VERY well connected in the area’s preconstruction market, it’s a good idea to go through a real estate brokerage that specializes in preconstruction real estate developments. There are several reasons why using a quality brokerage can help you, but most importantly, they know the developers and can discern between which can ensure quality and which are “accident prone”.

3. Read Fine Print - Before investing in a development, be sure not to fall victim to the curse of the small print. Avoid ending up the subject of those horror stories about real estate investors who are suckered into ridiculous contracts with developers. Some developers will not let you sell the property until years after it is finished and others will charge huge penalties if the property is sold early.

***BEWARE*** As developers have learned that the word “preconstruction” alone can sell out a development, they have created a new trend in the industry by labeling every phase of the project a “preconstruction phase.” Often these are low-quality condo conversions or condotels that are not worth half the asking price. BE SURE you are buying in the actual preconstruction phase before purchasing!!!

The bottom line is that the bigger the preconstruction real estate market gets, the more you have to watch out for fly-by-night developers and unethical brokerages that don’t have your best interests in mind.

Phil Laboon
1-866-247-2259
http://www.Yaerd.org

One of Japan’s largest property developers was Zephyr Co; a company which filed for court-led administration recently, after tightened lending criteria and problems with selling property caused it to sink into the red. The developer listed US$890 million of debt - what impact has this had on other Japanese real estate and property for sale in Japan?

Source: The Real Articles: Finance | Stock Market Investing

When resort real estate experts congregate in throngs to learn and share information about an exciting product, they are bound to come up with some guidelines. A May 2006 gathering of nearly 400 resort and real estate experts at the Ragatz Symposium in Coronado, California was held in wrapped attention as their colleagues shared “dos and don’ts” about Fractional Real Estate for developers.

Fractional Real Estate projects (including Private Residence Clubs) increased by 218% say Ragatz Associates, internationally recognized as a leading market research organization in the resort industry. Primarily, the rapid growth in this intriguing product results from the void it fills for both consumers and developers: it has a good image; it offers variety of types of products and locations; many major hospitality brands have jumped aboard; and it is increasing in market acceptance.

So, if you are a developer considering fractional real estate, what seems to be working best, you ask? Well, it is real estate after all. Logically, the first component is always location in a popular vacation resort area. Secondly, a great location within the resort is always optimal. If families can ski-in/ski-out, golf-in/golf-out, it is a bonus for all involved.

After location, buyers look for credibility in a developer. What have they done before? With whom are they associated? Do they know the area? All these elements are key to building a strong foundation with potential buyers.

Fractional Resort Real Estate is primarily residential in nature, so adjacency or association with a fine hotel and being able to draw on its services, amenities and dining opportunities boosts the value of a Fractional purchase. It also makes it easier to draw potential clients who are already favorably predisposed to the on-site offerings.

Developers are urged to look at the traditional real estate offerings in the area. Are there limited and/or expensive second homes in the vicinity that makes a fractional purchase an enticing venture for a family who would prefer to have the advantages of home ownership but not the hassle of keeping up a second vacation home? Are homes in the location priced out of reach for even comfortably positioned second home buyers?

Your location must have year-round appeal or at the very least two strong visitation seasons. A ski resort that offers no summertime activities or a lake that is inaccessible nine months of the year do not lend themselves to luxury fractional ownership.

If your fractional resort is the first one to hit the market, or has limited local competition, your chances for success are better, says research presented at the Ragatz Symposium. Experts also say that proximity to a large affluent visitor base, along with urban centers helps put the stamp of pre-disposed success on a fractional product.

Another marketing assurance for a developer to consider is access to a data base which includes resort visitors and real estate prospects. This kind of data base takes building a relationship with local brokers and tourism centers such as chambers of commerce, local attractions (e.g., lift tickets/greens fees), as well as the utilization of various internet sources.

Add a great history of the area (legends, tales of healing waters, golf greats who frequent the course) or story telling opportunities for the future (improvements, plans for the future, activities) to the mix and you have a recipe for success.

This check list for success is not only enhanced but solidified with a use plan which is designed around the buyer. Without that important look at your owner, all your hopes and plans and dreams can come to naught.

Keep this check list in mind while planning for your future success in the Fractional Real Estate world:

	Popular resort location
 	Great location within the resort
 	Developer credibility
 	Fine hotel nearby
 	Limited availability to second homes
 	Year round appeal
 	Proximity to visitor base
 	Access to valuable data bases
 	Great history or story telling opportunities
 	Well designed use plan

Carl G. Berry RRP is CEO for The Star Resort Group. He has over 30 years of resort and urban development experience. Founded in 1978 Carl’s previous company, California Resorts, Inc. dba Resort Development & Advisors, has been the market leader in urban share projects such as The Manhattan Club in NYC, San Francisco Suites and Powell Place City Shares in San Francisco. Mr. Berry is a co-founder of The World’s Finest Resorts. He has served as Chairman of the American Resort Development Association (ARDA). Carl Berry earned a BS degree from the University of Idaho. http://www.carlgberry.com