The Future of Real Estate
October 3, 2009 by Lucas Lechuga
A few months ago, I referred to a secret project that I was working on that would crush my competition. We've had a few delays, but after a little over 3 months of work we are now very close to completing it. Today, I provide you a sneak peek of that project. It's an iPhone application that will revolutionize the industry. I've done a ton of research on the capabilities and flaws of the iPhone and have thought of everything. I won't go into the features of the application at this point for obvious reasons but I must say that I'm very proud of this little pocket rocket. In the picture above, you see the start up screen. I didn't want to reveal too much at this time but I will unveil other screen shots within the next two weeks and go into all of the features of the Miami Condo Investments iPhone application. I'm also preparing to launch the same application on the Android platform early next year.
Early next month, I'm also planning to launch a new website. It's coming along very well and it has exceeded all of my expectations. I recently brought in an assistant and showing agent to help me during these months of expansion. I'm looking to bring in 1-2 additional agents within the next couple of months. My plan is to solely concentrate on this website and the iPhone application and crank out 5-6 posts per week. Unfortunately, that means that I won't be able to do anymore showings. However, you can be rest assured that you will always meet with a quality agent who knows the South Florida condo markets as well as I do (well maybe not that well).
I think it will be interesting for you to look at this info.
Lucas your new website is going to absorb this blog is not it?
” I’ve done a ton of research on the capabilities and flaws of the iPhone and have thought of everything.”
Lucas,
You’ll turn out a much better product getting eyes on it early in the devlopment cycle.
Eagerly awaiting your explanation, Lucas, because I’m having a hard time figuring out how a “real estate app” will be useful from a practical standpoint compared to any other real estate research that can be done on a laptop or PC.
Hope you didn’t spend too much money on building an app. Most of the readers here aren’t really buyers. Incase you haven’t discovered.
Lucas,
Excited to see the new web and app. Hope it is all you dream it to be. Will be fun to see a steady stream of posts again!
900 Fan,
You would be amazed at the number of people on this blog, or who silently read it, that are buyers. Remember that a buyers time horizon is not 6 weeks. In reality, a buyer may look for a year or more before deciding to purchase-and this is in normal times. Under current conditions that time lines may be 2, 3 or 4 years. In case you failed to realize, there really are not many active buyers anywhere. The number of condos being sold in Miami is truly dismal. The latest numbers show increases from activity levels which were essentially zero. Plenty of time and units left for people to move off the sidelines. Buyers will become active once prices reach a reality point-foreclosures have proven this. As 2B condos in Miami approach the $200k level in mass, activity will pick up.
Is it possible to post more CONDO DEAL’S on the site Lucas?//I’m sure there MUST be some deal’s around. thank you
Congrats Lucas. I’m curious to see the final product
Lara Post # 1
I have to thank you again for posting those closings. This information is invaluable and yes Lucas needs to somehow start including this.
Gables
Regarding your post # 5 it appears to me that after perusing Lara’s closing table that we are closing in on $200. per sq. ft as the new norm. Skyline – Brickell River – Emerald – Imperial House – One Miami etc.
Kramer,
Some of the low hanging fruit can be had at a good price, but activity wont pick up until the more average units reach these lower prices. Right now most people cannot afford a $200k loan in a building once tax and HOA are included. Watch rents over the next 6 months. They all dropped to around $1700-$2200 for 2B new units-which does not cover carrying costs. If we see another drop, look out. That means the owners are heading into foreclosure and capturing any cash possible. Note all of the short sales listed in these buildings. These are all future foreclosures.
Amusing read on most of the current stalled/empty projects
“Suspended Habitation”
http://www.biscaynetimes.com/index.php?option=com_content&view=article&id=403:suspended-habitation&catid=46:features&Itemid=162
Kudos on the innovation.
Best regards.
scriv
Congrats Lucas on taking the lead! Perfect time to start investing in new projects and getting prepared for the future.
What are these guys smoking???
http://www.miapoliscity.com/
Paramount Bay
2066 N. Bayshore Dr., Miami
Developer: Royal Palm Communities
Status: Unoccupied
Even compared to its other high-rise neighbors towering over the new concrete canyon along N. Bayshore Drive, Paramount Bay is big, really big. Reaching 555 feet at its tallest point, the L-shaped tower contains 346 residences, a two-level fitness center, a 40-seat movie theater, nightclub spaces, pedestrian retail, and a rooftop pool.
But during a recent visit, the only signs of life were lighting fixtures in the ceiling of the three-story lobby and a security guard posted at the mouth of the condo’s parking garage. Carlos Gutierrez, director of sales, explains that Paramount will get its temporary certificate of occupancy in October and that the sales team hopes to commence “closings” in November.
Officially Paramount Bay sold 75 percent of its units at around $600 a square foot. But to avoid an epidemic of buyer’s remorse, developer Daniel Kodsi is in the process of renegotiating prices. “We will arrive with a win-win situation with each buyer,” Gutierrez says, adding that Paramount’s case is different from other projects. “The building was designed for owner-occupants, residents,” Gutierrez insists. “It is not an investor building. People bought in order to use it.”
One charming feature promised in early promotional materials no longer exists: a grand 1920s house featured in the comedy There’s Something About Mary. The stately home was the last survivor of an upscale neighborhood once known as Miramar, which thrived from roughly 1910 through the 1920s. Developers erased Miramar’s elegant mansions and replaced them with today’s high-rises.
Kodsi wanted to preserve the home and use it as a retail and restaurant complex called “The Mary House at Edgewater.” Those plans were dashed in March 2008, when a 14,000-pound crane fell from the 37th floor and smashed into the house, killing two construction workers. Deemed unsafe by the city, the structure was demolished months later.
——————————————————————————–
The Filling Station
N. Miami Avenue at 17th Street, Miami
Developer: The Filling Station Lofts LLC
Status: Partially built
This project’s snazzy Website makes a bold promise: “Lofts. Done Right.” Actually it should read: “Lofts. Done Halfway.” The incomplete Filling Station seems frozen in time. According to David Lombardi, a Wynwood property owner and developer, the ten-story, 77-unit project was topped off, windows were being put in, and stucco applied when work suddenly stopped in March.
The owner is Daniel Holtz, who bought the land in 2003 for $800,000. (His father, Capital Bank founder Abel Holtz, was convicted in 1994 of lying to a grand jury about public corruption in Miami Beach.) Holtz’s company later got a $26.9 million mortgage from Ocean Bank. Versa Capital purchased the mortgage, and this past August began foreclosure proceedings. If Versa is unable collect, the partially built Filling Station will be sold at auction. Leaving the Wynwood property half-done in the meantime would be “really stupid,” Lombardi opines. “The way it is now, the money that was spent is all at risk. Leaving a building open that way — it’s a catastrophe.”
JL, DREW, et. al:
While I applaud Lucas’s use of technology and won’t criticize the soup before it is served, I would offer this:
http://www.nytimes.com/2009/10/05/technology/05apps.html?_r=1&ref=business
See paragraph 3 re: Redfin’s app. (just a thought)
pink panther – – I particularly enjoyed the part of your post concerning the crane falling on the 1920’s era house. Priceless!!
scriv
Hugo (#13),
If that link you posted is to the same project, and I’m about 90% sure it is, then it’s really old. I remember back in 2004/2005 I met this guy hanging out by my buddy’s pool that was trying to raise capital for the project. He gave me the whole song and dance, promising that it was a sure bet and that this would be like nothing else in the world, then asked for a million bucks. What a joke. I wonder how many people actually fell for that garbage.
Lucas,
Congrats on the app! I’ve already got Zillow and Truila apps on my iphone, so I’m excited to see what yours offers above these two.
When America looks back and starts documenting this real estate depression I’m sure these iPhone apps will be mentioned in Wikipedia.
Not sure I would want my product, company, or name linked to historical stories about the depression.
An iphone app that would use the GPS function and show you all the properties within x miles that fit yor criteria and map it out would be interesting… is the app something along those lines?
Anyway, the danger, especially with Real Estate is that it’s a labor intensive search meaning people would probably like to do their research at home in front of a large screen. RE is a serious purchase and a large purchase so an application needs to bring the steak and not just sizzle. Most iphone apps are sizzle.
Good one Lucas,
You will make a lot more monry off of this that you will selling RE over the next 10 years!
i have to admit, i was a big fan of filling station. the amenities were awesome (parquet basketball floor, free weights gym etc.) and the unit layouts with the 18ft ceilings were (high enough to put a workable mezzanine level in) made for a great concept. now however, the developer cut so many corners just to get the place half built, that it’s no longer appealing even if it does get finished.
as for ios, i think it’s a great project, probably one of the best in the biscayne corridor, but the prices are still too high once you consider the location. paramount bay…it’s f$%king huge.
Coool, I’m on my third iPhone and another great app would be great. Best wishes and look forward to seeing what the end product is.
– On a side note, on HGTV the show Real Estate Intervention is great! Unreal how people get anchored on wishing prices despite riding the market down…for 2 years in one recent episode (yes, two years of denial). If there aren’t tears then the host isn’t doing his job. It is sad really but the sympathy ends when you see someone who took out a $525,000 interest only loan with ZERO down payment for a McMansion with several spare bedrooms (and it is just the two of them), finished basement and all. And they shed tears that the bank should work with them and they shouldn’t have to dip into their retirement savings. My position is tough. They try to push the loss onto the bank and ultimately onto us the taxpayers. Why the hell should I have to pay for their idiot mistake when they have the assets? I had to chuckle when the wife said her husband worked sooo hard for the house (WTF, no money down, interest only). The entitlement and federal deficit society is bearing a lot of rotten fruit.
AJ siting:
http://www.youtube.com/watch?v=GA8z7f7a2Pk
http://seattletimes.nwsource.com/html/realestate/2009989812_realcondoguy04.html
Complimentary article from Seattle about Mr. Tibor Hollo………………
I’m surprised the Biscayne Times article didn’t mention that Biscayne Landing (in addition to being built on a Superfund site that was dubiously de-listed) was built right next to a water treatment plant and the area smells like a sewer a lot of the time.
From what I saw of Ios, it looked nice on the outside. Too bad nobody was there to show off units when I arrived during business hours. They still want too much, though.
Randomly Guy – Driving west on 163rd from Collins sometimes you can smell the sewage plant, depending on the weather. It is nasty. The smell sometimes travels to Biscayne Blvd and beyond. Nasty smell. If Biscayne Landing has that very often….there is no way that would be livable.
Tom – I’ve passed by that area a lot over the past 6 years. Biscayne Landing is almost right at ground zero for that smell. It’s not livable. I don’t know why anyone okayed that project in the first place.
Randomly Guy- one word why that stupid stinky project was approved: GREED
That Biscayne Landing area STINKS! I used to go to the FIU library when I was studying for the bar exam a few years ago, and literally the whole area smells like raw sewage.
SwissLuxury, thank you for your article. It was very interesting to read. Tibor Hollo seems like a brilliant and very brave guy. It is so amazing that at his age he keeps sharp mind, creativity and business qualities instead of crying over bad market. I really admire that.
At the same time I completely disapproved his actions towards Lucas.
Drew – On city of North Miami’s side, it’s obvious that it was greed. But it’s the developers’ side I don’t understand. After smelling that smell, how could any developer in their right mind think they could shine that turd? What buyer in their right mind would buy there after smelling that? When they first started developing there, neither the Biscayne Commons shopping center nor the Total Wine even existed at that time.
Hi Lara! He’s not my favorite developer, but I hope I’m that feisty at 81 (or simply make it to 81 LOL!) Maybe you can answer a question for me….we sold our apartment at LATITUDE back in August (#1411 3BDRM $360K, my last name is Randall), yet it shows up nowhere in the previous sales figures on sites like these…Do you know why? It makes me think there are a lot of other transactions we can’t see…..I do know it is a TON of work to look at actual closings on current buildings like 900, ICON, Marquis, etc……
Response to #32.
I have no idea why your closing is not reflected in any info table or statistics. May be it has not been recorded yet. Go to miami-dade county website and if you do not see it there it means it was not recorded. The next step would be to address this issue to your closing title co.
2009 R 610649 is the clerk’s file # so we know the sale recorded, just doesn’t show in the MLS records I guess………
SwissLuxury,
I checked, and the condo I bought recently is recorded here on Lucas’ site under the “recent sales” tab for that building, but there is another sale in the building that occured at around the same time (as per county records) that does not show up here. Mine actually showed up within like a day after I closed. Who knows.
Can someone recommend reliable insurance co in Miami. Since I have tenants in my apartments and due to new Laws I fould like to get liability insurance. I would appreciate your responses.
Randomly Guy- Blame it on irrational exuberance. Many development decisions, in hindsight, made no sense. But the market was so hot at the time that everything made perfect sense. Now we are realizing how absurd it was. For example, look at TAO in Sunrise. A developer (Weitzer) and lender (Corus) actually thought it would be a great idea to build twin 26 story towers in suburban Sunrise on the fringes of the Everglades…failing to comprehend that people move to West Broward to live in a house w/decent sf and have a yard, not to live in a shitbox in the sky. I believe the developer felt that living steps from Sawgrass Mills Mall was a strong selling point: another flawed assumption TAO is a disaster, just like several others that defy both logic and real estate principles.
Swiss Luxury, do you know something about Neo Vertica. Since it is in the neibourhood what is your opinion about the building?
Lara: I had a friend who lived there for a year and did not like it.
She reported that the parking garage is narrow and the spaces are very close together – – increasing the chances that a car will be dinged by a neighboring vehicle.
She reported that the glass windows are not low-e glass (or treated) so her unit (2 bedroom) heated up like a sauna every morning when the sun came up. This meant that her electrical bill doubled as the air conditioner ran constantly – – particularly in the summer.
She also reported that residents were up in arms over the noise produced by the two clubs in the neighborhood – – Big Fish and (I forget the other club). These clubs hosted large noisy parties/events that ran all night – – meaning she could not sleep on those nights and the police department did not seem interested in enforcing Miami’s noise ordinance. Several of the residents said they were going to sue – – but never did. Typical. The noise (the clubs and from fellow residents (see below)) , design and other issues drove her out of the building.
One other issue is the layout. Honestly I did not understand it. She was allegedly in a “two bedroom” unit. But based on what I saw, there was one bedroom and then a “nook” on the second floor. She explained that it was a “loft” – – bah. Maybe I am too old fashioned for such new fangled stuff.
Honestly, I think the building is one of many “post children” of poor design and planning built during the housing bubble/debacle. One of the dirty secrets of the building is its fire suppression system (the sprinklers). Somehow the developer used, and the building inspector signed off on, pvc/plastic pipe instead of stainless/cast iron. The consequences were horrific as the pipes burst – – pvc/plastic pipe cannot withstand the pressure – – and flooded several units. Thereafter the developer had to go through the building and replace all the pipe. My friend was living there at the time – – what a mess.
I can also report that the walls are not insulated so if you have a noisy neighbor – – you hear every thing (radios, pets, etc.)
scrivener, thnk you very much for taking your time and expressing your opinion.
scrivener…
I sincerely doubt that the developer used classic pvc pipe in the sprinkler system. Not sure how the city woudl miss something like that and why a subcontractor would use it and be faced with the huge potential liability.
Plastic pipes can tolerate the pressure and are regularly used in sprinkler systems across the US, but they are generally made of CPVC, which is heat resistant and much easier to install than the metallic alternative (no torch, light weight, etc.). A lot of the new buildings in So FL have this system, so it’s not something new
There was probably an error in installation which is what caused the flooding.
Lara, Here are the positives on NEO VERTIKA
1. Low price point
2. Good Location walking distance to mary Brickell & riverfront you can watch the boats go by…….
3. Great views on higher floors
4. Restaurants nearby: River Oyster, Andu, Grazzianos
Negatives:
1. Not super high quality construction
2. Noise (this depends on which way your unit faces)….not only from the 2 river clubs mentioned but they just opened an irish pub bar on the premises “Waxy O’Connor’s” as well…
This property is probably best for the younger crowd and if bought cheap enough might work out as a rental….
Our Latitude apartment when backing out all the upgrades really sold at $200 psf so would not want to pay more than $100-125 psf on Neo product……Hope that helps! Darryl
I recall water and pipe issues a couple of years ago when neo vertika first opened. Almost moved in there, until Lucas showed the pics of a few disaster units. Thanks for the save Lucas!
Are there any steps a unit owner can take to control noise issues? Insulation on the walls, ceilings or floors to suppress neighbor noise? Or are you just stuck with the mess?
Hugo P:
I’m just reporting what my friend/former resident reported. Thanks for the information on CPVC. Neat stuff!
gables: I had forgotten what a great job Lucas did on this issue.
Kudos Lucas!
scriv
gables – There is a special drywall that is sound absorbing that you could just lay over the existing drywall…it is about an inch thick so if you are already finishing out the unit that may be the easiest to apply to the adjoining wall(s). You would think there would be some sort of sound part of the building code….. It is a huge issue in some buildings. I can’t imagine spending $500K+ and being able to easily hear your neighbors or the people in the hallways…absurd when the cost at the time of construction would have been minimal.
Thank you for all your opinions about Neo Vertica. I’ll take it into consideration. It is not that I reached the price point with the owner. If I do not reach it to my satisfaction then forget about it. To me it is a pure investment.
herald’s running an article on the corus sale.
pretty impressive terms. the face value makes it look as if starwood bought it for 60 cents on the dollar. the reality is that the purchase price was $554 million. all starwood has to do is payoff a chunk of 0% notes and a billion dollar credit line (which is being provided to finish construction). presumably, no guaranty exposure. depending on starwood’s hold strategy (along with the value of non-fla portfolio) . they will make a killing. the gov’t is literally giving them free money to finish everything, rent it while paying no interest on a big chunk of debt and then liquidate the portfolio. jorge’s comment in the article seems a bit optimistic once you consider his own capital structure reality…
I thought I would look at a few non-new buildings. Wow, there are some really cr*ppy condo buildings out there…
just a hunch that condo prices won’t be resetting upwards……
Will this video shock you?:
http://www.youtube.com/watch?v=qbUk4H3FRMw
In my opinion, these people are scum. THEY signed the contract, no one put a gun to their head and now us taxpayers will be footing the bill from the damage they create. Also, neighboring property values will also decline as the sales comps for the neighborhood will tank. Gray area of the law? No it is not. Time to prosecute…go to jail. I wonder how many of these people took out all the equity possible to finance their lifestyle…..a majority of foreclosures are due to using their homes as an ATM than just a bad purchase decision. Selfish scum. Completely inconsiderate to the impact on their neighbors, the taxpayers, the common good…it is wrong.