Flipping A Contract On A SoHo Condo
I was met up with a friend last night and started talking about real estate. Now that 10 Sullivan is “live” (active listings online) and setting current record asking prices in SoHo, owners in contract at One Vandam could get greedy and flip their contracts for higher prices.
The area where people could be making the largest returns are on one-bedrooms at One Vandam. Over the past year, developers have shied away from building studio and one-bedroom layouts and in turn, have been building 2, 3 and 4 bedroom floorplans. Construction started at One Vandam in 2013 just before this trend. In total, five (5) one-bedroom apartments are planned.
These one-bedrooms consist of two (2) 737 square feet and three (3) 836 square feet layouts. Asking prices were $2,191 and $2,141 per square foot and prices in SoHo for new construction is currently over $2,450 per square foot. No one currently knows what these apartments are actually in contract for, but one can assume its around the ask.
Because there is a shortage of new construction one-bedrooms, especially in SoHo, I have a feeling that owners of these apartments might even try flipping their contracts before One Vandam is even finished being built!
For instance, on the 737 one bedrooms, owners could make a quick $190K ($2,450 – $2,191 * 737). Similarly, on the 836 one bedrooms, owners could make a quick $258K ($2,450 – $2,141 * 836). Assuming a 20% down-payment, of $323K and $358K, that would be a 59% and 72% return on investment in less than a year!
Pretty crazy!! Is this even possible?