How to Find New Build Property at Big Discounts

How do we Source Our Discounted New Build Properties?

We have a number of different methods for sourcing investment properties with big discounts. We have different approaches depending on the vendor’s situation.

Sourcing new build properties at a discount depends a great deal on the size of the developer.

Large New Build Developers

The big new build property developers are more likely to give us new build properties at a discount when they are approaching the end of their financial year. They need to increase revenue from sales for their city figures so look to secure a number of sales quickly. These properties are usually constructed ‘stock plots’ which are perceived to be tying up revenue, i.e properties that are completed but unsold. Developers also need to be discreet as they do not want those who have already bought on site finding out they are selling at significant discounts. This is why many of these deals do not make it to our website and if you are looking to buy from us emphasises the importance of ensuring your Broadgate property investment adviser knows what you are looking for. Occasionally it is requested that we don’t send out mail shots. We recently sold a new build property which an experienced investor bought to flip. They put it back on the market with the agent who had been marketing it for the developer at £250,000, the client bought it from us at £191,000. When they told the agent what they bought it for he nearly fell off his chair. He was most put out he wasn’t given the opportunity to market it at a lower price by the developer.

On some sites, the higher the price they manage to sell for, the bigger the discount they give. Why? Because developers often have a target figure for a phase of the development or a block of apartments. If they sell some for more than they budgeted, they can afford to sell others for less than they budgeted. When you’re building homes at such large volumes, selling properties faster at slightly less profit can ultimately be the most profitable option.

Could you find these new build deals yourself without paying us a finders fee? Possibly, yes but we do have advantages.

1. Many of our new build deals are done at director level, site offices do not have authority to offer the discounts we are given. On occasion developers will request that our clients do not inform site office about the prices they have been offered!

2. Many of our deals are done for multiple properties, if you are looking to buy one you may not achieve the same level of discount.

3. Many of our deals are done based on track record and deliverability. Their main concern at this time is not how much they sell to you for but whether you will complete on time. We have a strong track record of fast completions with the major house builders.

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Small and Medium Sized New Build Developers

They sell properties to us at a discount for a number of reasons.

1. Cash flow – releasing funds from constructed properties gives them more working capital for other projects or other properties on site. Could you do this yourself? Yes, but you have to put in lots of hard work to find developers who are in a specific financial position.

2. Bulk sales – We may negotiate a deal on an entire block prior to completion. The developer will agree a price for a block sale, hence offering it to us at a much lower price than the value of all the properties combined. We will then sell them to our clients at the discounted price and pass the discounts on to our clients.

We have 8 people based throughout the UK looking for new build deals for us full time. The developers they speak to will have hundreds of sites between them, our team of sourcers may look at 70 or 80 sites a week where the developers motivations and the investment credentials more or less stack up. Maybe 20 proposals a week are put to developers and ultimately around 2 or 3 new build deals are agreed for us to put to market each week.

If you have the time and feel comfortable with it, try and do it yourself, it will save on our acquisition fees if you manage it. Make sure it’s a good deal though, we wouldn’t be happy to find you’d bought at a low discount to save 2% on our fees. If you don’t have the time and inclination at least you now have an idea of what goes into our acquisitions.

“Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good