This is a new column I will be writing weekly for CondoVultures.com, a news and information website by Peter Zalewski. His company is the premier market research company for the South Florida condo market and represents bulk buyers, as well as having a real estate brokerage of the same name, whose agents represent buyers looking for the lowest priced condos.
Broken Condominiums-CondoVultures.com
Excerpt:
My recommendation for value investors who want maximum profits for minimum input is to engage in the practice of Condominium Termination.
In several high rise towers, residents have reported the interruption of cable and internet services, rampant squatting, thefts and other misadventures related to non-payment of association dues in the property and lack of proper security.
Residents of the Mirrasou condominium in Northwest Miami-Dade lost access to the most basic of utilities, drinking water, as reported by the Miami Herald on April 16th, 2009. According to the report, the association has a delinquent bill of over $124,000. In the end, it took the direct intervention of a city commissioner to get the water flowing to this 304-unit condominium development.
When the water is shut off in a multifamily building, residents have to watch out for hazards such as infection from unsanitary relief, dry traps in sinks and toilets that create stenches, and the possibility of sudden condemnation of premises leading to emergency evacuations of owners and tenants alike.
During the peak of the great housing boom, dozens if not hundreds of developers hurled themselves into apartment house to condominium conversion projects. These groups operated like miniature private equity hedge funds, buying what were then mispriced commercial real estate assets and converting them for residential use and sale to individual owners.
The dollars and sense of these projects seemed obvious at the time, with condominium prices crossing $300 per square foot for even the lowliest of dwelling houses. And appetites seemed never ending.
Buyers lined up for the opportunity to buy a corner unit because it had much better value than an interior unit. These speculators, for the most part, have been removed from the scene, banks are taking huge losses – often times as a direct result of ignoring their own rules for occupancy and use in lending – and buildings that sold substantial amounts of units have become “fractured”.
