Assignment or Pre-Construction?
The Toronto Real Estate Market is growing rapidly. Toronto Real Estate Investors now have a choice between Condo Assignments and Pre-Construction condos. In this article I look at the main differences and offer insights on what to pick.
List of Assignments
Follow this link: https://urbanrealtytoronto.com/condo-assignments-for-sale
List of Construction Condos:
Follow this link: https://www.torontocondosforsale.com/
When Developers create new condo projects, they sell units before the building exists. That is called Pre-Construction. The phases of the same are usually as such:
- Insider/friends & family
- Pre-Construction / VIP / Platinum
- Public Sale
The first phase may not happen in all condo projects. In some cases developers are aware to the high demand of the project, and they wish to maximize their return on the investment. If they sold too many units for cheap, they will not be able to maximize their profits, so, they start with the Pre-con sale right away.
At the Pre-Construction phase, developers will offer condos via VIP agents, such as Yossi Kaplan. The agent will email their newsletter subscribers about the opportunities, along with all the required information. The prices offered will be the lowest price possible and the best selection available.
Deposit Schedule is typically:
- $5,000 with Offer
- 5% less $5,000 within 30 days.
- 5% within 60-90 days
- 5% within 90-180 days
- 5% on Occupancy
Foreign buyers must pay 35% deposit (and pay 15% Foreign Tax on Registration).
The investors will then wait for the building to complete, or try and assign (flip) the units on a later date.
Condo Assignments are investment condos that have been purchased at the Pre-Construction phase, and are now offered by the original purchaser. Once a buyer is found, and all are in agreement, both the Seller and the Buyer of the Assignment will seek the Developer’s approval to change the name on the contract (APS) from the first buyer’s name to the current one (purchaser of assignment) .
What are the advantages of purchasing an assignment?
- The cost on the assignment is attractive
- You can invest in a sold-out project
- You may seek a unit in that particular building
- The assignment is a good investment
Assignments, however, are condos that are near completion. As such, you need to remember:
- Assignments close soon, so be prepare to close
- Assignments require a high amount of cash
- Assignments cannot be flipped again, you must close
- You will need a mortgage (or pay cash for the condo)
- You will need to close
- You will need to pay for all closing costs, Land Transfer Tax, HST (if investing), and Legals
- There is no Real Estate Commission to the purchaser of the assignment.
Toronto Condo Assignment Videos
- Pre-Construction usually offers an attractive price, but the longest wait.
- Pre Construction may not be available (building sold out)
- Assignments offer s discount on current market prices
- Assignments need a high amount of cash available
- Assignments close soon, prepare cash for closing
For more information, contact Yossi Kaplan, MBA
- Toronto Condo Assignments: https://urbanrealtytoronto.com/condo-assignments-for-sale
- Pre-Construction Condos: https://www.torontocondosforsale.com/
- Re-Sale Condos: https://urbanrealtytoronto.com/toronto-condos-for-sale