Quote:
Originally Posted by dave99
If everyone followed your advice there would be nothing for anyone to buy.
Every developments needs some cash flow to keep going.
If any developer has so much money to waste he may as well put it in th bank and settle for 7% profit with no risk or employment for any workers.
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This view also will deny potential risk takers from gaining substantial profit from big discounts during building stage of a development.
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Everyone wont follow my advice, but smart investors should not get involved with funding developers little money making adventures that may or may not deliver.
Fadesa of Spain for example made all sorts of promises when they sought eagre buyers, but now the products have been delived in a terrible state with showers that go cold if you turn on a kitchen tap.
This is the problem with offplan, you just never know what will be delivered.
Fadesa are struggling financially which is a real example of why one should not part with any cash until the product is delivered. The Banks could pull the plug on them any moment.
One method that to an extent aliviates the going bust worry, is where developers sign over the land plot when the deposit is made. Ive seen this done in the Bahammas and Carribean. At least that way the investor owns something if the developer goes bust.