One of the biggest risks is that the project you invest in could be cancelled, which has become more common during the pandemic. There is also the risk of the market softening and you not enjoying the appreciation that many people expect when investing in pre-construction units.
Opportunities exist when developers need to sell more units to reach the threshold for construction financing or to sell the last units so they can move on to another project. Another opportunity arises when an original buyer has lost their job and is motivated to assign their pre-construction condo deal to you.
You only submit incremental deposits over a period of time rather than a large cash outlay upfront. You also benefit from locking in a purchase price now and enjoying appreciation on the whole purchase price when you close in several years, which creates interesting leverage.
You should talk to the lender that is present on the builder's site. That lender is intimately familiar with the project and can lock in an approval for you until the project completes.
Some projects may be cancelled or not completed, and some buyers may have difficulty closing on their purchases. However, if people are unable to afford homes or expensive rentals, many will look to buy or rent condos, putting you in a good position to benefit from increased demand.
