Buying Pre-Construction Luxury Condos in South Florida: An Investor's Guide to Deposits, Timelines and Risk

Every season, a new rendering goes up on a construction fence somewhere between Palm Beach and Miami, and every season a few of my clients call me about it. A glass tower on the Intracoastal in Fort Lauderdale. A boutique building a short walk from Atlantic Avenue in Delray Beach. A handful of residences in downtown Boca Raton with private elevators and a rooftop pool. The pitch is always the same: lock in today's price, pay in stages, and own something brand new when it delivers.

Pre-construction can be a genuinely good investment. It can also tie up a large amount of capital for years with no income and no guarantee of the outcome you were sold. The difference is almost never the building's design — it's what's in the contract and whether you understood it before you signed. Here is how I walk investors through it.

What You're Actually Buying

When you buy pre-construction, you aren't buying a condo. You're buying a contract right to a condo that doesn't exist yet, from a developer whose financing, construction schedule and sales pace you can't fully see. Pricing in the luxury segment of these projects across South Florida generally runs from roughly $1 million for a well-located residence in Boca Raton or Delray Beach up to $10 million and well beyond for branded towers in Palm Beach County and Miami.

That framing matters, because it changes the questions you ask. On a resale condo, you inspect the unit and review the association's financials. On pre-construction, you're evaluating a developer, a contract and a timeline.

How Deposit Schedules Work

Luxury pre-construction in South Florida is typically sold on a staged deposit schedule rather than a single down payment. In my experience, the total deposits on high-end projects commonly add up to somewhere between 20% and 50% of the purchase price, paid in installments tied to contract signing, groundbreaking, and construction milestones like topping off. The balance is due at closing, when the building receives its certificate of occupancy.

Two things investors underestimate:

• The opportunity cost. A substantial deposit can sit in a project for several years while earning you nothing. That money isn't in the market, isn't producing rent and isn't available if a better opportunity comes along.
• The closing balance. Whatever you didn't pay in deposits, you'll need at delivery — in cash or through a mortgage underwritten at the interest rates and lending standards of that future date, not today's.

Florida's Escrow and Cancellation Protections

Florida law gives condo buyers some meaningful protections, and every investor should know them before signing.

The escrow rule on deposits

Under Florida's Condominium Act, a developer must hold buyer deposits in escrow. Deposits above 10% of the purchase price may be released to the developer for construction costs — but only if the contract expressly allows it. In practice, that means the first 10% of your price is generally protected in escrow, while anything above that may be spent building the tower. Read that clause carefully, and understand which portion of your money is at the developer's risk.

The 15-day rescission right

Florida also gives buyers of new condominium units from a developer a window to cancel: the contract can be voided within 15 days after signing it and receiving all of the required condominium documents. Use those 15 days. That's when your attorney should review the declaration, the budget, the contract and the developer's right to change things — not after the window closes.

The time to negotiate a pre-construction contract is before you sign it. After that, the developer's lawyers wrote the rules you'll be playing by.

The Contract Clauses That Matter Most

Developer contracts are long, and most of the important language lives in the sections buyers skim. These are the ones I ask clients to focus on:

• Completion deadline. How long does the developer have to deliver, and what happens if they don't? Contracts often allow for extensions due to weather, permitting and supply delays. Understand your remedies if the date slips significantly.
• Right to change plans and finishes. Most contracts allow the developer to substitute materials, change layouts or adjust amenities. Know how much latitude you've granted.
• Assignment rights. Can you sell your contract to another buyer before closing? Many developers restrict or prohibit assignment, charge a fee, or bar it until a sales threshold is reached. If your strategy depends on flipping the contract, this clause decides whether you even have one.
• Rental restrictions. If you plan to rent the residence, check the proposed declaration for minimum lease terms and limits on leases per year. Some luxury buildings are designed explicitly for owner-occupants.
• Default terms. If you can't close, what happens to your deposit? In many contracts, the answer is that you lose it.

Evaluating the Developer

The single biggest variable in pre-construction is the developer. Before I'd recommend a project to a client, I want to know:

• What they've delivered before in South Florida, and whether those buildings came in near their projected dates and finishes.
• Whether construction financing is in place — a tower with a lender committed is a very different risk than one still dependent on presales.
• Who the general contractor and architect are, and their track record on comparable buildings.
• How past buildings have aged. Walking a developer's five- or ten-year-old project and talking with residents tells you more than any sales center.

The Appraisal and Financing Gap

Here's a scenario I always model with clients: you sign at a price set today, and the building delivers several years from now. If values in that submarket have softened — or if the building's later units were discounted to finish sales — the appraisal at closing may come in below your contract price. Your lender bases the loan on the lower number, and the difference comes out of your pocket.

The reverse can work in your favor, which is exactly why pre-construction attracts investors. But plan for both. If the investment only works in the scenario where prices rise, it's a speculation, not an investment.

Where Pre-Construction Makes Sense — and Where It Doesn't

In my experience, pre-construction tends to suit investors who:

• Have capital they genuinely won't need for several years.
• Want a specific product — new construction, modern building systems, a certain view or floor plan — that's scarce in the resale market.
• Are buying primarily for their own eventual use, where the return is the lifestyle as much as the appreciation.

It's a harder case for buyers who need current rental income, who may need liquidity, or whose plan depends on assigning the contract in a building that restricts it. For those buyers, a well-chosen resale condo in Boca Raton, Highland Beach or Palm Beach — where you can inspect the building, read years of association history and collect rent from day one — often delivers a better risk-adjusted result.

A Simple Checklist Before You Sign

• Have an attorney review the contract and condo documents within the 15-day window.
• Confirm exactly how much of your deposit stays in escrow and how much may be spent on construction.
• Read the completion deadline, extension language and your remedies if it's missed.
• Understand assignment rights and rental restrictions before you rely on either.
• Model the closing: your remaining balance, the financing you'll need, and what happens if the appraisal comes in low.
• Research the developer's delivered buildings — in person, if possible.
• Compare the deal against resale alternatives in the same submarket.

Let's Look at the Numbers Together

Pre-construction isn't good or bad on its own — it's a set of trade-offs, and the right answer depends on your capital, your timeline and what you actually want to own. I'm happy to sit down with you, walk through a contract line by line, and compare it honestly against what's available in the resale market from Boca Raton to Miami. No pressure, and no hand-offs to a junior agent along the way.

Call me directly at 561-287-7247. I'll be the one who answers, and I'll be the one with you through closing.

Julian Rizzuto Flancbaum, Broker/Owner, LPR Properties
One Broker. One Priority. You.