The Floridian 3 Bedroom Condo Foreclosure in South Beach – A Fantastic Deal at $444,900

This blogger has been following the trend in Phoenix of bank owned properties being priced at “too good to be true” prices leading to actually bidding wars…. sounds like a good strategy:

http://www.foreclosureexpert.info/2008/03/multiple-offe-1.html

A client submitted a bid on a foreclosure property in South Beach about a month ago and we were told that there were 8 other offers on the table. We didn’t get it.

Yes, but Lucas I think this is still too high considering that the world is ending and that the Floridian will be knocked down and sold for spare parts, no?

Wait a minute. According to several experts that post here, isn’t Miami Beach supposed to have a protective shield over it that prevents prices from declining in spite of a multi-year supply?

How did this happen – a 30-38% decline in value (depending on which comp you use – last sale of this particular unit was $630 in ’04 – a year before the peak)?

Miami Beach is supposed to be “different”. Prices are not supposed to decline here. This is nonsense!

This is crazy. I agree. They should knock down the Floridian and sell it off for it’s parts, no?

I have heard their cooling system is a copper bonanza, but really, this is almost too good to be true. The original owner purchased in 2004 for $629,500; it is tax valued at $803,350; and the bank is owed $688,043. An interesting wrinkle is owner transferred to a land trust after foreclosure started, bank gets final judgment, then land trust quit claims back to owner, sale is held, bank gets certificate of title from sale. Could someone explain this apparently evasive action to attempt to delay or invalidate the foreclosure? There are people marketing these land trusts, anyone have any… Read more »

Lucas, you really think that the status will be changed to pending by the end of the week? I’d bet against that happening. …but we will see, no?

Hey Perez
Help me out how did you do that flawless research. Seriously, good work.

I would expect prices to go lower. Miami-Dade Court records show a high amount of negative activity taking place at the Floridian.
Ditto that for most buildings posted on this blog.

The Merrill Lynch prediction of 15% decline this year and 10% decline next year is a reasonable estimate. With the recent Fed decision to more or less take over some of this poor quality debt instead of more large interest rate cuts will strengthen the dollar which will dampen the last market (the foreign buyers). This will also help to stabilize prices in non-bubble markets but will do little for the bubble markets (rustbelt – OH, MI, IN and speculation/fraud – FL, AZ, CA, Las Vegas) other than falling 50% more. We are also going to see some problems in… Read more »

It’s not a ‘great’ building and I wouldn’t buy there personally, but I would agree that the price makes sense for someone who wants bayside South Beach. Just.

BFG – yep, I know, but ssshhh, don’t upset the other commentors (sic).

Roughly $360 / sq ft for a high floor facing the Bay. Floridian IMO is comparable to the Waverly. If I recall correctly, did the Waverly get converted at around $340 / sq ft in 2003? Can’t recall the specifics, but I remember alot of developers telling me that was an insane price for the build. Quite a few people were calling the market top in 2003 when that got floated LOL. That’s the problem with trying to guess the top of a boom and the bottom of a bust. If you try to think rationally, you are always going… Read more »

Thanks Kevin, I have people; not really, most info is public.

I occassionally come across these land trusts in researching foreclosures. The owner transfers to a trust, the public records only show the trustee as the owner, so the equitable owner’s name does not appear in the public records. Those wanting privacy use these trusts, but also those trying to hide assets; I just wonder how effective these are in avoiding creditors, liens, and foreclosures.

Kevin,

It is all public information. You just have to dig.

I’ll bet it gets put under contract soon too. “Foreclosure” seems to be the buzzword. I missed out on one in the arts district recently due to multiple offers and my client’s offer was for full price and 30% down.

I think its misleading to compare the current listing price to comps from almost a year ago. Just because two fools paid $700K +/- in the Floridian last year doesn’t make $450K a great deal. Note in the MLS listing that there are very few interior photos: because the unit is dated/dull, just like most of the Floridian units that haven’t been renovated since the conversion. Keep in mind you’re buying in a former apt bldg, so expect the half-assed and cheap fixtures, hardware, appliances, flooring, etc. And 1234sf for a 3/2 is rather cramped. Nice view, though.

I just called to show the unit at The Floridian. They already have 3 offers on it and it was just listed yesterday. Like I said, this thing is gonna go fast.

No matter which way you slice this, 445k for this unit is a GOOD deal. Everytime I’ve seen a condo sell at a low foreclosed price it has been sold in a week. it happened last month on a 2/2 at one miami. people are out there just waiting for the real good deals, and when they come people are jumping on them faster than flies on honey. if the price is right there are many many buyers out there with lots of cash.

Kevin – the Dade clerk’s site contains all the public records documents (mortgages, deeds, judgements, liens, etc): And of course, the appraiser’s site has owner, sales and tax info: Dade’s clerk and appraiser sites aren’t as useful as some other counties. But you can still find almost anything if you dig through it. One useful feature that I use on the clerk’s site is the features where you can search by the recorded plat number of the building you want to search. The plat book and page are listed when you do a search on an owner’s name in the… Read more »

It’s actually quite interesting to see this blog’s participants acting like a market. Lucas puts the price of the ‘issue’ up and people are making judgments as to value/price. Our own little auction… Seemed pretty clear that that both price per sq ft and quantum have a big part to play in why so many of us thought this was, at the very least, a decent price. I’d be interested to know how important quantum was in people’s assessment of value? Or was it simply sticker price we reacted to? So my question to the readership – how many people… Read more »

Only if the unit was completely gutted and then renovated to a more open floor plan w/ significantly larger bathrooms and larger balcony (which obviously could not happen) and then completely updated. And upon proof that the association is financially sound and also assurance that the bldg was at least 75% owner occupied.

Then $900K might be ok.

By the way what are monthly assessments for this $445K unit?

Julian – I think the higher the square footage, all else equal, the lower the price/sf gets. I don’t think you can just double the square footage and assume you’d get double the price. Two 1,250 sf condos would obivously be worth more than one 2,500 sf one. As you add more square footage, there will be a diminishing value – again, assuming that everything else is the same (location, view, quality). I’m not surprised at all that this unit would get snapped up right away. There are still enough buyers out there right now that are still thinking in… Read more »

Just noticed that this building is also a condo conversion. Converted from apartments and sold initially in 2004.

BFG – that’s true. But seems rarely reflected in condos of less than 3000 sq ft.

As for condo conversion – I don’t get what the fuss is about. Yes finishes and design might not be the same as a flash new build, but most countries in the world don’t differentiate between rental buildings and owner-occupied buildings. You get a mix of ‘occupiers’ in either or both types.

Julian- one of the reasons all these bldgs have been “blacklisted” by lenders is that the % of renters v. owners is too high. The unit is less likely to hold its value with a bunch of renters, for obvious reasons (little investment, transient population, little personal/financial stake in the association and amenity upkeep, etc.) That’s the truth of the matter, even though I personally agree with BFG re being the loser renter in the nice bldg vs the smart buyer in the second-rate bldg. Besides, the owner/renter issue is different from the condo conversion issue–since conversion products were originally… Read more »

Concur w/Drew re: materials in a rental. I have a friend who lives in the Floridian and have visited many times. The whole building feels like an apartment (e.g., thin walls, dimly-lit common areas, narrow hallways/doorways, low-ceilings and cheap finishes throughout). As reflected in the square footage, the bedrooms are very tiny in the 3BR’s. And it is definitely a party building on the weekends.

Here is a link for the Miami-Dade County mortgage foreclosures search:

Not very useful format (you have to click through each page and look at each legal description). But since Feb 11, 2008, there have been 3,976 lis pendens filed with the clerk. Not all of those are mortgage foreclosures, though. Like I said, it’s not a very useful format.

Foreclosure.com is somewhat useful, but you have to pay extra money for detailed info. It’s good for just looking at what’s been generally filed.

“low-ceilings and cheap finishes throughout” Curious, how would you value a 2 Mill condo if it had 9′ vs 10′ ceilings. Does it matter much to most people? I remember a friend of mine buying a bunch of Murano Grande presale units back in the day and we went up to check out one of his 3,000 sq. foot units that was getting floors installed. I was expecting to be really impressed as most condos down on the Beach max out well before 2,000 sq.ft., but ironically, the 3,000 sq.ft felt slightly claustrophobic. It was quite a surreal initial impression.… Read more »

JL,
That’s exactly the effect that ceiling heights have — not only in larger spaces, either. The difference between 9′ and 10′ on paper is very minimal; in reality, this 10% difference is pronounced, at worst: creating a claustrophobic effect in larger floor plans and at best: making it patently obvious that this is a rental conversion, since nearly all commensurate condos have at least 10′ ceilings it seems nowadays. The Floridian screams early 90’s in decor and finishes. Even the Vue (another rental conversion) had a more condo-y feel to it, and that’s downright scary…

JL – that was hilarious. Good summary of how we got into this mess. Can’t wait to see how the government and Wall Street will F’ it up even more over the next few years.

JL

high ceilings add great value as well as the feeling of greater volume to any condo; easiest way to see the difference is to check out any condo which is located at the pool level of any building.

Since the common areas usually have 11ft ceilings, these condos have the most volume per sq. ft. of the entire building.

Carlyle Capital — Caught a falling knife, got cut and now will go under. Lesson: don’t jump in if you’re going to use debt to get in since you need to understand a 50% cut may be down the road. Even smart money people do dumb things in a declining market.

JL and JGM glad you liked the mortgage crisis piece.

If a topic gets started on this let me know, my email is just my name at site address. We can work something out and I will get you the original images.

Freddie/Fannie – Worst housing market in the last century. Things are going to get ugly…er.

Just talked to the listing agent of the Floridian 3 bedroom foreclosure. He’s received 10 offers so far, including one that I submitted yesterday. He said that 6 are all-cash offers and almost every one is full price or above. I tried to get a feel for how much above the asking price we’d need to come in at. He said, “Let me put it this way, you would need a desperate buyer. Someone REALLY wants this condo bad”.

Good to hear someone is able to create a buying frenzy somewhere. Nothing creates demand like having someone else wanting it too……

I think all the “SMART MONEY” is still in the bank waiting.One condo sale and everybody is getting excited.GOOD LUCK to the new owner.

I agree. I may be in the minority here but I don’t see this as a good deal at this point.

All the offers are probably from non-local buyers who are being fed a load of filtered information (crap) from their brokers and the listing agent, esp regarding the prior sale price.

Check back in a year and this $445,000 “steal” will seem like a rip-off.

Its really about a $500,000 condo, considering it needs about $60,000 in upgrades. Good to see prices finally at levels they should be.

If it needs 60k in upgrades then its definitely not worth the 445k price. Brian must be the listing agent or bank rep.

carlyle’s fall doesn’t make much sense. yeah, they were leveraged to the hilt, but freddie and fannie securities shouldn’t be selling at significant discounts. they are quite discernible in terms of risk (and thus, pricing) when compared to other RMBS. frankly, if the banks repossessing this collateral can’t move it (part of the fed’s most recent liquidity move), it’s going to get ugly fast.

kevin,

That is an old rental building, so it is worth knocking down, no? Can you hear your neighbor whisper on the tele?

Is 445K a hot deal? I doubt it. In the last few years, people have lost sight of value of money. It will take a while for people to adjust to what real values are. The inflated values in 05-06 has skewed perceptions of fair value. One good example is the condo I checked out a few months ago. It is located right next to Marriotte south beach (opposite 112 prime). The tiny 2 bedroom condos were selling for high 300K range in 02 and now it is for sale for $890K.. WTF? What happened in the last 5 years… Read more »

“What happened in the last 5 years for that condo to triple in value? Did the number of condos go down?” Duh, what a dumb question. Come on man, it’s obvious. Like 6-7 years ago, Madonna and most of the cute, friendly REAL models left the Beach while Rosie O’Donnell and a bunch of skank porno “models” started moving into the Beach, now that’s HOT. I’m surprised Real Estate didn’t go up 500% cause of that. But on a more serious note, what happened is a bunch of white collar criminals from New Yawk and Europe followed the porno models… Read more »

It did have to do with the tech bubble. Once the tech bubble popped, people wanted a safe place to put their money and real estate is usually a good place. Then 9/11 happened and people freaked and wanted to nest, the govt. lowered interest rates to prop up the economy. Those items caused more people to get into real estate which caused a shortage, which caused prices to go up, which peaked everyones’ interest, which caused builders to build, which caused more investing in real estate as builders couldn’t keep up with demand and home prices were rising, interest… Read more »

i agree with tom—the whole real estate bubble was created by the tech bubble bursting and everyone moving their money into real estate. the last big real estate bubble was in 1990 with savings and loans going under. At that time all the Japanese were buying up all the real estate because of a strong Yen and got left holding the bag when the big bang happened This time it will be the Europeans you will not see this problem end for a few years–and don’t think these are such great deals until you see prices back to the 2003… Read more »

The “6 offers” on the table at the Floridian are all cash? If the credit crunch leaves the bargains to cash only buyers its not a good sign. The ~22% of the units in this building that are listed for sale, not including this once incidently, is a little scary given among other reasons the slew of IO loans about to reset in the coming months.

The only relation to the tech bubble is that the Fed was forced to lower rates and kept them there far too long. As a result, “free money” fueled the excesses of the real estate and many other markets. Big problem, far bigger than just real estate, and likely to get much worse before it gets better. Put on your seat belts!

This is just the start next year you can pick up a 2 br in the floridian for $250K and 3 br for $300. Have you seen the whopping inventories!!! This is a down trend. Remember the trend is your friend not the other way around. Bank are going bust and will not finance anything to anyone. I lived in the Floridian for 4 years and the finishing are terrible. Lot of gat sex in the Jaccuzi. No offence to gays but I lived 4 floors up from it.

Oh yes the tech bubble is nothing compared to this. This is a mega problem.