Buying/selling off the plan

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From: Jason Prestwidge


Could someone please explain the whole process of buying off the plan using a deposit bond, then selling it back off the plan?

What are the risks? Is it purely a futures play which gives leveraged profits and losses, or is the most you can lose, being the deposit bond and legal costs.?

Jason

 

[michaelg]

Reply: 1
From: Michael G


Jason,

Do a archive search on "Henry Kayne", but here are some issues;

1) the price you pay for now, was actually "market" value - the more overpriced the greater the risk

2) the market drops at settlement time and you're left with negative equity from day 1

3) fail to factor in the possibilty that you may have to settle and have enough borrowing capacity to take on the debt.

4) fail to account for a dozen other investors like yourself trying to sell their properties at the same time and doing nothing to out market the competition.

Thats just a few I can think of.

Michael G.