I have had a chance to review the revised lease application checklist that is now required by the association at One Miami. There have been a few changes made to the leasing requirements that must be met prior to tenant approval. The revisions were made by the One Miami Board of Directors as mentioned in my previous post entitled “One Miami Notice“. In addition to a common area’s deposit equal to one month’s rent, the One Miami association has implemented a building pet deposit of $250.00 which is non-refundable. The common areas deposit is refundable as long as damages are not made by the tenant during the length of the lease. Another significant change made by the One Miami association is that a maximum of one lease will be allowed over any 12 month period. Previously, they had allowed a maximum of two leases per year. It seems that the Board of Directors feels that eliminating short-term rentals could be a good way of alleviating some of the tenant problems. Lastly, the revised application checklist mentions that all maintenance payments must be paid to date prior to any tenant application processing. All other fees and regulations have remained the same.
Although these changes will put a damper on the rental business that I conduct at One Miami, I feel that this is a move in the right direction for condo owners there. While investors in the building may be negatively affected in the short run, I feel that the long term investment picture at One Miami has improved as a result of these changes.
Short-Sale @ Neo Vertika in Brickell
A short-sale at Neo Vertika just came 0nto my radar yesterday. It is a one bedroom flat with 638 square feet of living space. It has parquet wood floors and is currently tenant-occupied. This condo unit, located on the 10th floor, faces south and overlooks the swimming pool and amenity deck. At a list price of $260,000, it is currently the third best priced unit in the building, but still has room for a few more price reductions before it is snagged by an investor. The great thing about a short-sale is that you are dealing with a bank. Banks hate having bad loans on their books and risk having the property go to auction where they could lose a large portion of the outstanding loan. With foreclosures on the rise, banks have become more open to accepting significant discounts on properties so they can write off the bad debt and avoid foreclosure. It wouldn’t surprise me if this one goes for around $200,000.
The maintenance on this condo unit is $322 per month. I’m trying to find out how much the current tenant is paying but units of this size tend to get anywhere from $1,250 to $1,450 per month in rent. I am going to try to see this condo in the next couple of days to take some pictures and a quick video so I can post it for everyone to see.
Neo Vertika was built in 2006 and has a fabulous lobby and amenities. There have been some construction issues that have tainted the building in the past 6 months but it is currently one of the best priced buildings in Brickell for sales and rentals. It is located along the Miami River and southwest 1st Court. Many of the condo units at Neo Vertika offer great views of Biscayne Bay and the Miami River. Neo Vertika is considered a loft building, with both flat-level and split-level floor plans which have 10-foot and 20-foot ceilings, respectively.
The video below will show you the common areas and amenities at Neo Vertika.
Today, condo owners at One Miami received an email notifying them that the Board of Directors has approved some revisions as of May 10, 2007. It goes on to say the following:
The lease and purchase applications are new and require additional documents and fees. All new applicants for lease or purchase must be notified to contact the Management Office and apply for approval from the Board of Directors prior to moving in to the premises of One Miami.
Although it may not seem like it, this is actually good news for condo owners at One Miami. This move was highly anticipated and long overdue. My guess is that the Board of Directors has decided to toughen the rental policy at One Miami and will most likely enforce a common areas deposit for the building which has become more and more common in newer buildings in recent years.
One Miami has the reputation of being a very social building. As one of the more affordable luxury high-rises in Downtown Miami, it has attracted a lot of renters. In recent months, I have heard complaints from residents at One Miami that the building has had some wear and tear attributable to the renters who reside there. It is common knowledge that a condo owner will, in most cases, take better care of the building in which he or she dwells than a renter. It looks like the Board of Directors is cracking the whip to alleviate this problem.
Built in 2005, One Miami is a recent addition to the Downtown Miami neighborhood. It is ideally located on the mouth of the Miami River and Biscayne Bay. The riverwalk in front of the building connects to Bayfront Park and Bayside Marketplace. Almost all condos in the building have some sort of water view and some even have views of the ocean. It is one of the more affordable luxury high-rise buildings in Downtown Miami. One Miami has five-star amenities such as concierge, 24-hour security, two swimming pools, two clubs rooms, two state-of-the-art fitness centers, valet service and much more. Along with the rest of the Miami real estate market, prices at One Miami have dipped a bit in the past year but have held up relatively well considering the number of new units in Downtown Miami and Brickell that have become available in the past year and the inventory of condo units that will come on-board in the next 12 moths. The three fundamentals of real estate are location, location, location and One Miami has all three with water views that will never be lost.
The video below will show you the beautiful riverwalk in front of the One Miami building and the outdoor artwork located along the walkway. The riverwalk currently connects from the building known as Brickell on the River to the shops at Bayside Marketplace but will eventually run further west along the Miami River.
The following video will show you a two bedroom at One Miami with bamboo floors throughout. It is a south-facing unit with views of Brickell Key, Biscayne Bay and the Miami River. This condo is available for sale or lease. The list prices are $499,000 and $2,600, respectively.
Vue at Brickell – Overpriced or Insanely Overpriced?
I’d have to go with the latter on this one. A look at the current inventory of condo units for sale at the Vue at Brickell will show that the average price per square foot that these units are currently listed for is over $550. $550 per square foot! That’s for a non-waterfront condo unit, with partial bay views at best, in a building that is, by most standards, NOT a luxury high-rise building. In fact, Vue at Brickell was formerly known as Summit Brickell View when it was a rental building. The acquisition of the Summit Brickell View was made in December 2004 and conversion of the 323 units to condos began quickly thereafter. Grant it, the Summit Brickell View had recently been completed when the acquisition was made, and almost 70% of the units had never been occupied. Either way, it had, and in most cases still has, the features of a rental building. The majority of the units currently for sale still have the ceramic tile and carpeting throughout just the way they were sold when the units were sold as condos. The pictures below will show you a typical unit at Vue at Brickell.
Keep in mind that this is a typical unit at Vue at Brickell. I realize that some units have upgraded flooring and appliances, but the majority of units listed at Vue at Brickell look like this. Some units are even listed at over $700 per square foot! Those better come with marble floors, a Sub-Zero refrigerator, a Miele dishwasher, and a butler and maid! But they don’t even come close. In fact, two of those listings priced at over $700 per square foot come with ceramic tile and carpeting throughout, just as they were when the building was known as Summit Brickell View. One of those listings says “motivated sellers”. Motivated? Maybe they’re motivated to WAIT. Even the three bank-owned listings in this building are overpriced, ranging from $436 to $510 per square foot.
So what made this building so insanely overpriced? Did everyone get together and smoke the wacky tobacky without me or is something more afoul going on here? A look at closed sales for 2007 in the building reveal that mortgage fraud may have been the culprit. Three of the eight closed sales in 2007 sold for prices much higher than the asking price. Here they are below:
List price: $549,995
Sales price: $720,000
List price: $619,000
Sales price: $770,000
List price: $647,000
Sales price: $830,000
These types of cash-back deals have been the focus of a recent mortgage fraud investigation throughout the country. A cash-back scam occurs when a buyer offers to pay a significant amount more than the asking price, with the difference returned to them at closing. Most banks like to keep the cash-back amount to no more than 3% of the purchase price, and almost all lenders have a ceiling of 6%. In most cases, the seller and the listing agent are not aware that anything wrong is occuring and are just happy to have finally sold the property. Lenders, on the otherhand, are unaware of these large cash-back payments because the details of the arrangement are concealed within an addendum that does not get submitted to the bank along with the rest of the sales contract. Unscrupulous appraisers are often used to justify the inflated value of the property and the bank lends based on the purchase price stated on the contract after review of the appraisal.
It is no secret that Florida is well known for the mortgage fraud that has been running rampant throughout the state. In fact, according to a report released by the Mortgage Bankers Association, Florida led the nation in mortgage fraud in 2006. Hopefully, the mortgage fraud investigation throughout the state, and the rest of the country, will put an end to this nonsense so property values can return to an equilibrium state as dictated by the law of supply and demand.
If my assumptions are correct, and previous condo owners at the Vue at Brickell did fall prey to this sort of cash-back scam, then prices there will come in for a crash landing. There’s another building in Brickell that I feel may have a similar fate but I’ll leave that for an upcoming blog entry.
Shoddy Construction at Neo Vertika?
This has been a blog topic that has been on the back of my mind for the past couple of months. I kept brushing it off as nothing more than residents griping out loud, but after delving deeper into the issues, I now realize that there are major questions to the quality of construction that was put into the development of Neo Vertika. Neo Vertika resides in the neighborhood of Miami known as Brickell, or West Brickell to some. It was completed in August of 2006 and has had nothing but problems since its inception. There have been three major water leakages, two of which resulted in entire floors being flooded; the building sprinkler system has needed replacement, requiring worker-access to each and every unit; and the air conditioning system is unusually loud. I have personally spoken to a few condo owners at Neo Vertika who received hefty insurance checks after having their units flooded, which had destroyed their recently laid hardwood floors. While these payments might be justifiable to the afflicted parties, they will inevitably be paid for by current and future condo owners of that building, either directly or indirectly. My guess is that a major increase in association fees is just around the corner for condo owners at Neo Vertika.
Prices at Neo Vertika have dipped in the last six months. The various problems with the building, such as the ones mentioned here, will likely pour salt in an open wound and make matters worse. I have also heard similiar construction complaints about the first Neo LLC development known as Neo Lofts. This makes me wonder how sound the other two developments currently under construction by Neo LLC, known as Wind and Cima, can be. Maybe Coastal Construction Group, the construction company used to build Neo Vertika, can get it right this time with Wind and Cima.
In other news at Neo Vertika, the pool-side bar is now complete. While Miami has the reputation of being a 24/7 party, this type of action is unheard of for a condo building in Miami. Prior to the installation of the pool-side bar, I have had several clients complain that the building has turned into a fraternity house. While this might be an ideal situation for some, most condo owners there will suffer. I’m guessing that the opening of the pool-side bar, and the money that will be made from it, is management’s answer to the ensuing insurance hike that will inevitably occur. Anything not tackled by the profit of the pool-side bar will eventually be passed along to condo owners in higher association fees.
At least the construction of the bar looks good. Take a look at the pictures above and the video below to see it for yourself. Cheers!
There’s a good short-sale opportunity in Brickell in a development known as Brickell on the River. The building is fairly new, having been completed in 2006, and has amenities which include: valet parking, a tri-level state-of-the-art fitness center, business center, 24-hour security, concierge, swimming pool, hot tub and club room. The monthly association fees also covers basic Cable TV, DSL, water, sewer and garbage.
I took a look at the unit in question last night and was very impressed with what I saw. Click on the thumbnails above to see full-size pictures of the actual unit. The 1 bedroom/1 bathroom condo located on the 27th floor has 775 square feet of living space, a balcony, stackable washer/dryer, stainless steel appliances, track lighting, blackout blinds, marble floors in the bathroom and hard wood floors throughout the rest of the unit. The unit faces west and has great views of the sunset and the boats passing by along the Miami River.
The current owner is in the foreclosure process and the bank has decided to accept short-sale offers. The owner paid $341,000 for the unit in September 2006 and it is currently listed at $280,000. I took a look at the closed sales in the building for the past six moths for 1 bedroom units with the same floor plan. There were only two closings for 1 bedroom units with the exact same floor plan as the unit in question. Both units were sold “decorator-ready” which means that the unit was sold without any flooring, light fixtures or window treatments. The first unit is located on the 12th floor and sold for $290,000 in February of this year while the second unit is located on the 16th floor and sold for $325,000 in December 2006. Keep in mind that the foreclosure unit is fully decorated and doesn’t require any additional money to make the unit complete. I am relatively confident that the bank would accept an offer in the ballpark of $240,000 to $250,000.
The unit is currently occupied by a tenant who is paying $1,650 per month. The lease ends at the end of July but the tenant has made it clear that he would be willing to terminate the lease early if the buyer is looking to occupy the property prior to the lease termination date. The maintenance fee is $440 per month.
Feel free to call or email me with any questions that you might have.
The Miami Condo Investments blog aims to be the authoritative source for all news relating to Miami and Miami Beach real estate, with a specific focus on condominiums and lofts. We will provide investors with the best information relating to Miami and Miami Beach real estate investment opportunities. Preconstruction, foreclosure, pre-foreclosure, and short sale opportunities will be especially highlighted throughout this blog. We will also discuss various condominium developments in Miami and Miami Beach along with condos and lofts for sale that are good buying opportunities and/or are worth mentioning as well as comment on news articles that are relevant to the real estate industry and specifically to the condo markets in Miami and Miami Beach, Florida. We look forward to providing you with the best insight into the condominium markets in Miami and Miami Beach, Florida.
