Top 5 Distressed Condo Sales Closed in April 2009
May 10, 2009 by Lucas Lechuga
- Emerald at Brickell - unit 2201 - 2 bedroom/2.5 bath (1,594 square feet) - This unit sold for $306,000, or $192 per square foot, on April 30, 2009. Foreclosure (#1 despite the high HOA fees)
- The Club at Brickell Bay - unit 2604 - 1 bedroom/1 bath (825 square feet) - This unit sold for $110,000, or $133 per square foot, on April 9, 2009. Short Sale
- One Miami - unit 3215 - 2 bedroom/2 bath (1,145 square feet) - This unit sold for $255,000, or $223 per square foot, on April 13, 2009. Short Sale
- Skyline on Brickell - unit 1912 - 2 bedroom/2 bath (1,367 square feet) - This unit sold for $325,000, or $238 per square foot, on April 17, 2009. Foreclosure
- Brickell on the River North - unit 1007 - 1 bedroom/1 bath (757 square feet) - This unit sold for $145,000 or $193 per square foot, on April 17, 2009. Foreclosure
Runner-up: Vue at Brickell - unit 2108 - 1 bedroom/1 bath (838 square feet) - This unit sold for $94,000, or $112 per square foot, on April 29, 2009. Foreclosure
I think someone mentioned this last month, but Lucas should include estimated HOA fees applicable to each of these units. To me, HOA fees and association solvency are just as important as the sales price in determining a good deal or not.
Looking strictly at psf, these don’t seem to be such great deals. If these are the best from April, I’d hate to see the worst.
Yes, these don’t look like such great deals. If I remember correctly, I think there were much better deals the last couple months.
It would be interesting to see the number of closed sales for that month and see how that compared to previous months.
Lucas, I know we always seem to be asking for more. Please don’t get the wrong impression. We appreciate all the information you share.
I have to go with the flow…….and agree that these are NOT great deals at all.There are many other better deals available on the MLS.What is this an indication of??? Prices going up??or offshore buyers thinking ..there getting a good deal.No matter what it is LUCAS is working his A^*@ off to bring everyone as much info. as possible.And I APPRECIATE it VERY MUCH..THANK YOU LUCAS.
That emerald unit is pretty nice looking, but good god…..$1,474/month in maintenance and $1380/month in property taxes. WTF! Carrying costs are nearly $3,000/month before even factoring in the cost of the unit. I think the only way that place could be considered a good deal is if you got it for free.
Please Angel, can you tell me what kind of a deal you got on your 1 bedroom? If you’d rather not provide specifics, can you at least tell me if you paid under $2K.
Also, any negotiating tips would be helpful.
Kindest regards sir.
Thanks for the info Lucas. I don’t understand why your readers complain that you don’t provide the HOA or other info, when it’s in the MLS entry and HOAs are moving targets. Thanks for taking the time to assemble the info and write this blog, which I view as a public service.
Renter Tom, Ram:
This is off topic, but I happened to be reading the comments from this post last Oct 08:
http://www.miamicondoinvestments.com/2008/10/08/the-sub-100k-brickell-condo-hits-the-market/#more-384
Ram made the following comment:
“For a financed deal, the numbers for an investor would be:
Annual Revenue: +$14,400 (Rent @ $1,200/month)
Real Estate Taxes: -$2,000 ($100,000 @ 2%)
Tax Credit: +$600 (R.E. Tax Deduction of $2,000 assuming a 30% Tax Bracket)
HOA: -$5,400 ($450/month)
Annual Mortgage Payments: -$4,769 (30% down = $70k mortgage @ 5.5% for 30 years).
Mortgage Interest Deduction: +$1,245 (Annual interest of $4,149 & assuming a 30% Tax Bracket).
Depreciation Credit: +$1,463 ($100k for 20.5 years & assuming a 30% Tax Bracket)
NET: $10,308 (or 34.4% on the $30,000 down payment).”
Renter Tom who seems to be pretty knowledgeable said the following:
“RAM – You are looking at cash flow. From a wealth accumulation standpoint and assuming you do not hold this asset until you die, you should not include the “Depreciation Credit” as an expense since it will be recaptured when sold so it is just a temporary thing. Moreover, the entire purchase price can not be the basis for this depreciation since the purchase price includes items that can not be depreciated such as land which reasonably would be 15%-25% of the purchase price (all condos have X% undivided interest in the common areas which includes an interest in the land). So, the return on a cash flow basis is an inflated return until the asset is sold. Other than that nuance, good analysis and good job.”
I agree with Renter Tom’s criticism, but I’m wondering if he missed something or if I’m mistaken. In Ram’s numbers above, he subtracts interest and taxes from rental income as he should, but then adds back tax and mortgage interest “deductions.” I don’t think it works that way. When you subtract interest and taxes from rental income, isn’t that the deduction? Adding back your tax bracket percentage of those amounts is essentially deducting them twice. I believe RAM was thinking of how owner occupiers can deduct interest and taxes from their taxable income. But he was giving an example of a rental property. Anyway, I was surprised Renter Tom didn’t catch what I thought was a big error in analysis, but maybe I’m wrong. Look forward to your thoughts.
Angelinfo #5
I am paying well under 2k. Shoot me your email and i will give you more details.
The Emerald unit at $192/sq ft is a good deal but the HOA and taxes are killer. I can see why renting is a much better deal.
I would also love to see the HOA’s for each building. They are usually set for 12 months, so they don’t move around that often. Special assessments are the unexpected daggers.
I wonder if the high HOA fees at Emerald are the result of too many foreclosures not paying their fees. All the other units must make up for the difference.
Another thing to remember about HOA fees. Many buildings will keep monthly dues low to entice foolish buyers with a low monthly fee. However, that same building will do a special assessment each December (a few thousand $$$ per unit) to make up the difference. Happens all the time, but you rarely find out until you already have bought.
Can’t the buyer of the Emerald unit challenge their property taxes since clearly in today’s market, the value of the property is not the assessed value…this can be verified based on comps in the market. This will bring the taxes down.
Also….the main reason why HOA is so high is because of the high number of delinquencies in the building. Once the economy and real estate market begin to stablize, won’t these HOA rates go down to a more normalized level?
Therefore…he/she will only be paying high taxes and HOA for the first year at the most.
MarkyMark, from what I’ve heard, you can appeal your unit’s assessed value to try and bring taxes down, but the city doesn’t wanna lose all that income so it’s hard to get. Complete bullshit, and bordering on criminal if you ask me.
There will me MANY more deals out there. Just look at the latest foreclosure stats
HMMMMM BUY A HUGE TOWNHOUSE IN LEE COUNTY FOR 85 K OR BUY A SHOE BOX IN MIAMI FOR 200 ISH
MARKY MIAMI MARKET IS DEATH BY A THOUSAND CUTS, YOU WILL SEE A MILLION ARTICLES ABOUT THE ECONOMY AND HOW THINGS ARE GETTING BETTER AND BROKERS WILL KEEP BS ING YOU LIKE THEY ALWAYS DO JUST WAIT 2 YEARS AND PICK THRU THE WRECKAGE
I’d take a shoe box in Miami over living in Lee County.
NO MORE SHOE BOXES ………BUT AS AN INVESTMENT U CAN BE SURE THE RESALE VALUE OF THAT TOWNHOUSE WILL INCREASE WHILE THE MIAMI CONDOS WE KEEP TALKING ABOUT WILL DECREASE
Response to #17. Drew be careful there. You know that I am investing in Lee county. Lee county is a big territory. You have to know it. I do not know what townhouse you are buying but on certain areas in Lee county it is not a good price now. Get familiar with the area.
drew299,
Go to Lehigh Acres in Lee county, there you’ll find even cheaper homes.
But beware of your neighborship, you might get killed !
It will be hard to reduce the HOA’s because they are playing catch up. The reserves are probably really low and these 2-3 year old buildings will need some heavy maintenance work in a few years.
drew299,
In Lee county you should only invest in property with direct saltwater access
(canal or waterfront) !
But I think, this is beyond your budget.
Interesting article about the fate of Onyx.
http://southflorida.bizjournals.com/southflorida/stories/2009/05/11/daily7.html
Wow…..sucks for all those people that closed in Onyx at ~400/sq. foot.
My email is carpediem199211@hotmail.com
Thanks angel!
IF I DID NOT KILLED IN NYC OR MIAMI I AM NOT TO WORRIED ABOUT LEE COUNTY
I DONT LIKE PROPERTY DIRECTLY ON THE WATER…….SORRY …..WE HAD THAT IN THE HAMPTONS AND TOO MANY BUGS AND DAMAGE……..
I KNOW THAT OFFENDS FLORIDIANS OR PEOPLE THATAT MOVED TO FLORIDA / LIKE MOST OF YOU
YOUR RIGHT LEE COUNTY VERY DANGEROUS, I WILL STAY IN DADE WHERE ITS SAFE
Well if you’ve got such a hard on for Lee County, why are you posting here?
If the banks that take over these buildings cannot sell more units they need to convert them to full rental buildings. The people that did close need to be compensated for buying a building that is not a condominium.
wild bill
who’s going to compensate them? the developer? propably not even if they did have an obligation to do so (which i doubt). the banks? why would they be on the hook?
Onyx on the Bay units face foreclosure.
Condo Vultures CEO Peter Zalewski said Onyx has not received much interest from bulk buyers because it doesn’t have enough available units to be managed efficiently in bulk. Plus, it’s in the Edgewater area just north of downtown Miami, in a condo market that has not matured. Zalewski said distressed units in Onyx should sell for $100 to $125 a square foot.
Hat tip to the Ace he’s prediction of $125.00 was uncanny!
Why, because Peter Zalewski made an unsubstantiated comment in an article? Granted I’m playing devils advocate here, but that’s hardly enough to proclaim Ace the Miami condo nostradamus.
Holy Canoli
The collapse has begun. Look at Lucas CONDO DEALS page. Brand new Brickell avenue apartments for $140 something per sq foot at “AVENUE at Brickell”. Then two more new listings at another new building – ” Wind” for around $150. per sq foot. Looks like Gables will be moving downtown pretty soon. These are two bedroom apts in the core. With 1800 Club having two more at $180. per sq feet I dont know how you can call Emerald at $200. per sq feet a “best deal”.
A couple of comments.
In re to Lee County. I disagree with a previous opinion that one can invest there only on salt water canal properties. I would not invest in war zones and probably in a lot of areas of Lehigh acres, not in some areas of Ft.Myers but in other areas it is possible and actually can be very attractive. Salt water canal properties if it is a good deal have potential of most appreciation in the future but it is a speculative investment.as of now because they do not cashflow.
In re to Onyx the article is pretty interesting. I heard the developer has 29 units for sale and the last time they wanted to sell them for $250/sq.ft. Iwas told that the developer was offered $175/sq.ft and refused.
As I have said before – as prices come down to unthinkable numbers fear prevents people from being able to pull the trigger. The price starts to become allmost irrelevant as the “Hot Potato” is the HOA and inflated property taxes and trying to determine if your fellow neighbors have the financial ability to keep up their maintenance fee every month or will you be soon liable for their portion in a few months or in the case is the developer have the ability too upkeep the building. Who is going to be left holding that “Hot Potato” is the real question. BTW – in the case of a bank foreclosure on any unit the Florida legislature just ended without a “fix” for their sweetheart law which limits their exposure on a forclosed unit to no more than 6 months or 1% – so that if that unit re-sold in a timely manner the other owners have to pony up.
Lara,
who are the end users of those real estate deals in Lee County?
My understanding is that there are not many industries there and a whole bunch of empty homes. When you buy a foreclosed house and rent it out what kind of tennant are you finding? What is the potiential for growth in that area with the larg amount of over supply and relatively small amount of industry/jobs?
More speculators getting crushed. The fun is getting started. The fact that lara is even talking about “appreciation” indicates the bottom is nowhere near.
There are not enough humans in Miami to occupy all this real estate at full employment. What does this tell you about rental prices at 10% unemployment.
The value of a property is based on the amount of income you can extract from rent (dropping) minus expenses such as HOA and special assessments (skyrocketing) and taxes (slowly falling over the next 3-6 years).
LOL! Look out below!
The net rental building to open (infinity?) will really collapse rental prices. When is this wonder opening up lucas?
Response to #34.
There are a lot of people who retire there. I agree there are not a lot of jobs. I personally do not have tenants there because I wholesale my properties. All my buyers are investors. Also the population there is pretty big. There is an international airport in Ft.Myers. There is some old money there as well because there are areas with multimil.dollar mansions but there are poor areas as well. I know that rents in simple 3bd/2 bth houses(pretty nice) are around $850/month. People invest cash and rent. Prices there are so attractive if you know what you are doing and can negotiate a bit that people have a bit of positive cash flow and the peices can easily double there in the future. My estimate in about 3 years. You buy now for about 40c/1 dollar all foreclosures. and
Prices are about 1/fifth from what they were in 2005-2006. As always you have to know what you are doing.
next
BMW M3, You misunderstood me. I specify that if you rely only on appreciation it is wrong and it a speculative investment. You have to rely on cashflow. You always invest though where you have a potential of appreciation from your own point of view
BMW,
Infinity has been open for a while now. The first closing took place on November 21, 2008.
Well, what’s the next rental building to open now that everglades is open?
LARA…your posts are very interesting.I am also interested in Ft. Myers /Cape Coral area.(that is Lee County I assume) There are a LOT of amazing looking deals over there.I’m seeing beautiful 1800 sq. ft. ++ on 80×125 ++ lots on canals with docks for 200K.Thats for a move in condition home.Much less for a fixer upper.What do you think??? Your input would be appreciated. Thank you
Kramer,
You are quoting the price of 1800 Biscayne Plaza. Not 1800 CLUB. There is no unit in the 1800 club for that price per sf.
jcrimes,
The same day you posted that post on Biscayne Times, I was thinking to myself, is there anyway I can get this paper shipped to NY. It is a great paper like you said.
Anyone know how Jade Beach and Jade Ocean in Sunny Isles Beach are doing w.r.t. closings??? They seem awfully dark at night. Just the other night there was ONE unit with a light on in Jade Beach (usually there are 3-5) and from the ground I could tell it was a bare bulb, not a light fixture hence that “decorator ready” unit is still waiting for the decorator! Jade Ocean is worse, albeit it was more recently completed….expensive pads competing with Trump Towers and Turnberry Ocean Colony.
Closing rates for Jade Beach and Jade Ocean would be interesting to know……
There are quite a few units at 1800 CLUB in the $180 a sq. ft. price range BTW.
AJ
AJ you are wrong. Look on Luca CONDO DEALS page. Under 1800 CLUB at 1800 N Bayshore Drive two (2) units #915 and 1915 are listed at $180. per sq ft for about 30 days now. And no it is not confused with the other 1800 Biscayne Plaza on Biscayne Blvd.
Lucas
Any chance soon for a more recent closing update?
Hey friends long time no see.
So check this out…last summer was 25k in credit card debt with 7 k in savings.
This May I am 5k in credit card debt with 1k in savings.
Been working 13 hours a day to get totally out of debt so no time to troll this blog as much as I would like.
I know some of you here make 25k in a month so that is a joke to you, but for the illegal immigrant income I am making while putting myself through college I am pretty impressed and wanted to share it with you.
Hope to be debt free by October.
Not sure how a unit that costs $300,000 and has monthly carry costs of nearly $3,000 (11% annual cost of carry) w/o a mortgage comes out being a “good” deal. Maybe I live on a different plane, where renting a similar unit at $1,700 per month somehow makes *less* sense. But still…
I’m becoming more convinced that the problem with Miami condos is not so much the price per square foot, but more the cost of ownership. We can argue ad nauseum whether the “bottom” will come at $190 psf, $125 psf, $95 psf, etc… With maintenance fees and taxes so out of whack, the price paid on the unit is irrelevant–anything above $0.00 psf becomes too much!
I’m not sure what the way out of this mess is. Lower taxes help, although I have a hard time believing that a cash-strapped local government will find a place in its heart to offer tax relief. The obvious alternative becomes reducing maintenance fees, which would have to be done by cutting amenities and services. Will some of these buildings still hold appeal, however, with drastically reduced services when they were pitched as offering a resort lifestyle?
As an aside, I’d like to congratulate Lucas for his work on this blog. The real estate market is one where information is not always readily accessible, and you not only present it, but provide clear, easy to use data. Kudos!