Note Deals Take Off in South Florida

Note Deals Take Off in South Florida

When Robert Lechter heard Banco Popular North America was selling a note secured by a recently completed condo tower in Miami’s Brickell area, he knew it was no time to be timid. Lechter says he won the bidding with a $10.2-million offer for an $18-million note secured by the 62-unit Brickell Station Village.

Besides offering $1 million more than the second-highest bidder, he agreed to pay cash and to put down $2 million soon after Banco Popular accepted his offer. “I pursued it very hard,” says Lechter, principal of REMS. Group, a Hollywood-based developer. “In these transactions, you have to be aggressive.”

The condo’s developer, Royal Explore Development, signed the project over to Lechter’s company at the same time REMS closed on the purchase of the note in mid-August. The total cost per unit was about $164,500.

“It was almost like a short sale,” Lechter says, adding that he plans to rent out the units for three years and sell them when the market improves. Lechter is among a growing number of investors who are buying distressed notes at big discounts as lenders step up efforts to shed bad assets and cut the cost of carrying unwanted projects.

Foreclosure crisis far from over for South Florida

Foreclosure crisis far from over for South Florida

If you think the torrent of foreclosures affecting every city and nearly every neighborhood and street in South Florida is as bad as it can get, here is a harsh new reality:

There’s a new wave of foreclosures making its way through the courts that has nothing to do with exotic subprime loans, real-estate flippers out to make a quick buck or people who bought way more house than they could afford.

Now, double-digit unemployment, sagging home prices and a lingering recession are to blame.

“The second tsunami of foreclosures is coming,” said Miami Beach-based John Tur, who teaches people how to invest in real estate.

Detroit real estate: A bargain home or a money pit?

Detroit real estate: A bargain home or a money pit?

Detroit’s four-figure home prices are unusual, but investors around the country think foreclosed houses are too cheap to pass up. How to tell a great deal from a money pit.

For a foreclosure, the house at 15461 Kentfield St. in Detroit needed surprisingly little work. The new owner, an investor from the Chicago area named Kevin Holmes, slapped on a coat of paint, pulled up the dirty carpets, and replaced the stolen water heater. The car stashed out back, he learned soon enough, belonged to a neighbor, not a thief using the three-bedroom as a makeshift chop shop.

The simple brick home really wouldn’t look out of place in any middle-income Midwestern neighborhood. But in distressed Detroit, the Kentfield house sold for less than half the sticker price on a new Chevy coupe: $6,900.

Tips for Buying a Condo at a Bargain

Tips for Buying a Condo at a Bargain

These days it’s not easy owning a condo, or any house located in a community that requires homeowners to pay fees. As more owners in these communities feel financially pinched, many aren’t paying dues. That means residents who keep up with the bills have to pay a bigger share of the burden—and if there aren’t enough reserves to pay to replace worn-out roofs or fix a cracked sidewalk, they face the possibility of bumped-up dues or an unexpected special assessment.

On the flipside, prices are low. And for the brave home buyer, there are bargains out there. The trick is looking closely at the homeowner association’s health. As I’ve written before, buyers need to question the association board about dues payments, and have their inspectors examine common elements before committing to a purchase. It’s also important to review the financial documents that every buyer has a right to inspect before closing.

Consumer Advocate: Look before you leap into a reverse mortgage

Consumer Advocate: Look before you leap into a reverse mortgage

The reverse mortgage – available to homeowners 62 and older – has met criticism lately from federal regulators and consumer advocates who say aggressive sales tactics are pushing the loans on consumers who don’t fully understand the consequences.

The National Reverse Mortgage Lenders Association has pushed back by saying reverse mortgages have consumer safeguards but are getting a bad rap from unrelated problems – the subprime mortgage mess and the history of fraud against seniors.

So is the reverse mortgage right for you?

“Right person, right circumstances – excellent solution,” said Martha Cox, spokeswoman for Family Foundations of Northeast Florida, a nonprofit that provides mortgage counseling. “Wrong person, wrong circumstances – disaster.”

First-time homebuyers: For many, $8,000 tax credit proves nearly impossible to get

First-time homebuyers: For many, $8,000 tax credit proves nearly impossible to get

This summer, Brian Smith decided he should buy a house.

The 35-year-old was in the break room at his Maitland office talking to a friend about the idea, and the timing seemed perfect.

Prices were at record lows; “for sale” signs were common, and, most importantly, he could get a tax credit of as much as $8,000 for first-time buyers if he bought before December. But four months later, after looking at more than 40 houses and condominiums, Smith quit his search in frustration.

“Honestly, my heart was so broken,” said Smith, an associate at a financial-investment company. “I hate it I am going to miss the tax credit. But it’s better to wait and get the place you need and want than to get a place and not be happy with it.”