Condo investors having a nightmare

Condo investors having a nightmare

Dick Svelta, an investment manager with an MBA from Dartmouth and a net worth close to $10 million, liked the looks of a condominium project being built near Eau Gallie Boulevard. So much so, he took his banker up on an offer in 2004 to introduce him to the man behind the deal, Patrick Daleiden.

Brevard was booming, and the developer envisioned the planned mix of condominiums and shops as something akin to Worth Avenue in Palm Beach. Svelta and others invested an estimated $6 million, and banks loaned Daleiden’s companies behind the project, Eau Gallie Development and Casalina Condo, almost $11 million more from 2001 to 2006.

The sprawling project seemed poised to transform a stretch of boulevard known up to then for strip malls, run-down mobile home parks and tangles of Brazilian pepper trees. One of the beachside’s most prolific Realtors would be hired to sell units.

But Daleiden, apparently new to condo development, had a recent history of failing investors and lenders in other businesses, leaving a trail of judgments from Maryland to Brevard, a review of court records found. He faces more than $2 million in judgments against his other companies.

Listen Up: Four Scams That Fool New Yorkers

Listen Up: Four Scams That Fool New Yorkers

Let’s not get ripped off today, okay.

City dwellers pride themselves on being smart. We are not the kind of people who are going to hold money for an importunate prince in Nigeria, or to send our bank account information to some Joe who has the skills to copy the eBay logo in an e-mail.

We do, however, need places to live, and sometimes our need for housing can cause us to be a little less wary than we ought to be. I’ve seen it happen before to clients: They see their dream apartment, and the sophistication and cynicism that normally keep them from being conned fall away.

Panama’s new prosperity

Panama’s new prosperity

My passport says I’m writing this column from Panama, the country, not the city in the Florida panhandle. A quick auto trip to the old Panama Canal Zone to see the boats crossing the isthmus confirms I’m in the right country.

Yet, I get confused when I look all across the city. The skyline is much like that of Miami between the Rickenbacker Causeway and the MacArthur Causeway, where dozens of cranes signal upward growing skyscrapers. If Miami’s real estate boom still shows growth in buildings to house offices and homes for new urbanites, despite a recession in the overall market, Panama is heading only in one direction. Upward! Forever upward! The sky is the limit!

All this in a city of little over a million people; one in three Panamanians live in the capital or its nearby suburbs.

The signs of the building booms are everywhere.

Condo slowdown trips up bulk buyers [South Florida]

Condo slowdown trips up bulk buyers [South Florida]

Back when condos were still hot, mom-and-pop investors all over South Florida waited overnight in lines that snaked around the streets just for a chance to buy in.

Not the men behind The Formula, a company that bought condos in bulk directly from developers and flipped them. These three — a paralegal with a taste for fancy cars and the heirs to a Dunkin’ Donuts fortune — made millions until the market turned, and they turned against each other.

The story of The Formula offers a glimpse into the billion-dollar game of large-scale condo speculating that played out from South Florida and the Caribbean to Las Vegas, waged in the shadows of the condo frenzy far from the eyes of ordinary buyers. It also raises questions about how much of the condo market is built on the greed of gamblers — and how deep and long the downturn will go because of it.

Carolina Mall Owners Deal in Alleged Real Estate Scam [South Carolina]

Carolina Mall Owners Deal in Alleged Real Estate Scam [South Carolina]

A failing mall in Columbia, S.C., is now under scrutiny to discover what happened to cause its fall over a 20-year time span. Now named Midtown at Forest Acres, the mall has previously been known as Richland Mall, and Richland Fashion Mall.

Although the mall is now owned by Richland Joint Venture, out of Sarasota, Florida, the previous owners are under suspicion by the North Carolina attorney general for an illegal one hundred million dollar real estate investment scheme.