My parents won some kind of big lottery last night where they were given the right to purchase a water-front condo (2 bedroom, somethin like $250k) in a new building in palm beach. Apparently they don't have to pay up front, only 10% now and then another 10% in 90 days. They only pay the rest after the condo is built in a year. Now, I don't know much about real estate, but to me it really looks like these guys are trying to sell as many of these as possible in anticipation of a real estate collapse. Am I on the right track or is this a standard way of paying for new constructions?
igOr, That is exactly what is going on in Florida real estate! Developers are trying to crank out as many buildings as absolutely possible before the inevitable "rise in rates" occurs. If you think about it logically, any smart businessman would do the same thing. IMHO, there is currently a "Bubble Mania" going on with Florida real estate. The developers sell these units pre-construction, and with the 10% down, plus 10% more when they break ground, plus X% later, they essentially have no risk â the project is paid for by the frenzied buyers. I visited over a dozen new projects in the last few weeks, and I was totally amazed that the first question I was asked at almost all the sites was ... "Is this for an investment?" I find it amazing that people seem to have enough extra cash to pay $500K to $1M for a condo as an âinvestmentâ in Florida. Only time will tell, I could be totally wrong, and rates will drop to -5%, and real estate will double again in the next 3 years? Regards, Slave2Market P.S. Even if you pay cash for one of these condos, it can still end up costing you about $1.5-2K/mo in condo dues and property taxes.
Thanks for the response So what do you suggest would be the best action? Do you think we would be allowed to resell the rights? Simply throw it up on EBAY
I am not sure I understand, what good is a "right" to buy something and still have to put 20% down almost immediately? Isnt that a standard deposit? Plus I personally would NEVER buy anything before it is built if I can't have an idea of what it would be like to live in there. This lottery sounds like a marketing gimmick .
I currently live in one of those Florida condo buildings in Aventura... "Turnberry on the Green"...lol actually I have lived here when they were renting only. Now that there are frenzied buyers everywhere here, all the rental condos turned into "luxury condos for sale" its insane 24 hours a day here with all the marketing gimmicks they are using--free this, free that.... all over the newspaper you have insert after insert about all the pre-construction condos going up....sooo many its amazing. They are just not moving enough units in the building where I am living. Although its funny because every building down here advertise as 99% sold.....rofl, what a joke people buying 2 bedroom, 1600sqft condos in Aventura and Miami beach "from 1.2mil" pre-construction.... let' the fools have their way.... these builders ain't stoopid..
IMO, in addition to cheap money, there's a few demographic dynamics fueling the sharp appreciation in SoFla. With housing so expensive in NY/NJ those who move to Dade/Broward/PBC as either snowbirds or new full time residents are coming South, equipped with big bucks. If you've just sold your home in Short Hills or condo at 77th&3rd all of a sudden 660k on Collins or Galt Ocean Mile doesn't look so daunting. Also, people just aren't dying. 15 years ago if a guy lived to 80/85 it was a rarity. I know more women in their 90's than I can shake a stick at. Used to be the joke about New Yorker's scanning the obits to find an apartment. Now the obits are as skinny as the job section. Not to mention that continued South American instability brings moneyed immigrants into the area, no pun intended, by the boatload. Lastly, except for these new condos that are replacing many of the old 50's motels, SoFla is becoming rapidly "built out." Because of the Glades you can't build west of Sawgrass so Miami/Lauderdale is on it's way to being like California, albeit with NO personal income tax. I wouldn't say I'm bullish at these prices but I do think homes in SoFla were undervalued for many years.
This is most likely " ethnic " deal. Some local agent contact customers in their country of origin or language they speak. Filipinos call on Filipinos, Russians calls on Russians, Cubans call on Cubans and tell them about that great deal. Problem is that if you find the name of a development and go with established broker like Remax or Caldwell, Watson and such, you will pay at least 15% less then with those " compatriot " agents. Lottery? Do not make me laugh...
Bought townhouse in Boca, hoping prices rise as there isn't much more land to build on. We'll see, but they keep building more North now, such as Jupiter, Port St. Lucie, Wellington. Wellington was in Money magazine as one of the fastest growing cities.
I was checking out the latest issue of Unique Home magazine over the weekend. It's basically one of those 3 inch thick magazines that have the nicest homes in the country. Man I could not believe my eyes some of the homes in Florida. I mean we are talking castles here. And they just keep building. I mean these aren't starter homes they are building. We are talking 10,000 to 40,000 sq feet!!!!!! I mean Jupiter Island is sick! Who the f*ck lives there.