Miami is on Sale for Foreign Buyers

With the continued depreciation of the U.S. Dollar and the realization that attractive real estate in Miami is relatively cheap by international standards, the activity level of foreign national buyers purchasing prime Miami real estate is going to continue to increase.  You may argue that the dollar is going to continue to devalue, and you may be right. However, for the average investor, there is no better hedge to a devaluing currency or inflation, than real estate.

There have been several encouraging transactions in the bulk condo market these past few months. The sale of the Caribbean condo project, located at 3737 Collins, by Corus Bank to a New York investor was just one of these recent key transactions in the market. According to several sources, the original mortgage of $127.7 million on this 103-unit luxury oceanfront condo project, was sold for approximately $320 per square foot, or at a discount of over 50 percent.

In anther recent deal, Hyperion Onyx Partners, a local development and management company, purchased the outstanding construction on the 28-story Onyx on the Bay condominium in downtown Miami. Hyperion Onyx Partners, paid an undisclosed price for the note securing the remaining unsold 40 units, which is rumored at $155 per square foot and represents an approximate 50 percent discount over the original note at $303 per square foot.

A number of local condo developers are working out deals with their existing lenders to offer attractive financing  to purchasers of the unsold developer units in their projects. Canyon Ranch Living in Miami Beach, Asia on Brickell Key, and the Mei in Miami Beach, are three such examples.

According to an article published by the South Florida Daily Business Review, Lehman Brothers has plans to help fund up to $200 million of individual condo mortgages for buyers of the 580-unit condominium project. Americor Mortgage of Birmingham, Michigan, is responsible for originating the purchase money mortgages, which they will then sell to Lehman Brothers. At the Mei in Miami Beach, the developer is offering a seller financing package to purchasers. Progams are either a 5 YR or 7 YR ARM, with 65 percent or less loan-to-value ratios, and interest rates in the high 5’s to mid 6’s. 

The abundance of these recent bulk condo sales and the willingness of banks to sell loans at such large discounts is helping to set a floor under the new construction condo market, and in particular, in several projects where these transactions have taken place. While the number of re-sales in the luxury condo market are at very low numbers compared to the boom years, the level of interest in this segment is definitely increasing along with the number of closed sales.

It is encouraging to see this trend emerging, and even more exciting to see the level of foreign interest increasing in our incredibly diverse real estate market. With the Euro currently trading at $1.46, or the Brazilian Real trading at $1.79, the opportunity to acquire a second home or investment property in Miami is now!

Are you looking for a Miami or Miami Beach property at a deep discount? Are you looking for a discounted short sale or bank owned property? Ross Milroy of Miami Angel Properties, LLC may be reached at 305-673-5300 or info@miamiangelproperties.com.

Copyright © Miami Angel Properties, LLC

Priority of Liens in a Foreclosure Sale

September 22, 2009 – Last year, I published a blog post summarizing the Florida laws pertaining to foreclosure sales. Subsequently, one of the most common questions that we have received are specific to the priority of  liens in a foreclosure sale in Florida. Chapter 702 of the Florida Statutes governs foreclosures of mortgages, agreements for deeds and statutory liens in Florida.

In a foreclosure sale, certain liens become superior to the lien being foreclosed. Therefore, some creditors will receive their money and some creditors might not. Real estate taxes, special assessment liens and federal estate taxes will take precedence over all other liens. Special assessment liens, which is typically a tax levied by a city for improvements, are ahead of junior liens in priority and second only to real estate property taxes.

The following table illustrates the priority of liens in a foreclosure sale in Florida:

In today’s residential real estate market, when a foreclosure sale takes place and any outstanding real estate property taxes are paid, it is not common to find any proceeds from the sale going to any junior lien holder other than the first mortgage mortgage lien holder.

Are you looking for a Miami or Miami Beach property at a deep discount? Are you looking for a discounted short sale or bank owned property? Ross Milroy of Miami Angel Properties, LLC may be reached at 305-673-5300 or info@miamiangelproperties.com .

Copyright © Miami Angel Properties, LLC

Highest and Best Scenarios

The Village at Sailboat Bend

September 21, 2009 – A few months ago having to explain a highest and best request form to your client was unheard of. In today’s “affordable” price range under $200,000, it is almost always a requirement and many asset managers even add it to their preliminary document package when submitting the initial offer.

First, let’s talk about asking prices of bank owned properties. In South Florida, many asset managers and listing agents are purposefully pricing their new product at very attractive prices. There may have been one or two recent comparable sales higher than the asking price. However, in order to attract attention and competitive bids from the pool of cash buyers in the market, they release the property at an attractive or below market price. 

A few good examples of this intense bidding and highest and best situations are in the condo projects of the Grandview Palace in North Bay Village and The Collins in Miami Beach, as well as in the Village at Sailboat Bend in Fort Lauderdale. For several months there were a dozen or more distressed units on the market, and then one or two units finally closed at a very attractive price per square foot, and everyone jumps on this price over-correction in the condo project.

In the Grandview Palace this was the bank owned unit # 1517 that closed at a price of $100,000, or $97 per square foot, to a cash buyer in April 2009. A large two bedroom unit,  featuring a split floor plan, good location just minutes from Miami Beach, and fantastic open views of the bay. Since,  there have been another dozen or so distressed sales at prices up to $165,000 for an identical sized unit with a similar view.

In the Village at Sailboat Bend we experienced a very similar scenario. Following the sale of 411 SW 13th Terrace at price of $130,000 in May 2009, which was $1,000 below asking price, compare it to the recent sale of 418 SW 13th Terrace. This was an identical unit, and also a bank owned property, and it sold at a price of $160,100, which was practically $23,200 over the asking price!

If you are in a “highest and best” situation and are unsure of how to proceed, the latest from Fannie Mae, Freddie Mac and other major sellers of REO properties, is that they want CASH with at least a 10 percent initial deposit and preferably a second deposit of 10 percent. Remember that if you feel confident that at the asking price the property is a bargain, so too are other cash buyers. So don’t be hesitant to bid up over asking price if it works for you.

So what if you are offering a deal subject to conventional or FHA financing?  Well, be prepared to be even more aggressive to entice the lender, including providing a copy of your credit scores, a recent mortgage pre-approval, and even a bank statement to show proof of funds for the deposit[s], reserves and estimated balance due at closing.

Are you looking for a Miami or Miami Beach property at a deep discount? Are you looking for a discounted short sale or bank owned property? Ross Milroy of Miami Angel Properties, LLC may be reached at 305-673-5300 or info@miamiangelproperties.com.

Copyright © Miami Angel Properties, LLC

Miami Real Estate – August 2009

Summary - August 2009

For the month of August 2009, the Miami real estate market experienced a slight drop of 13 percent in overall closed sales. While the median price for single family homes remained constant at $173,000, condominiums and townhomes actually realized an increase in the median price from $126,670 in July 2009 to $135,000 in August 2009.

We think that this slight increase in the median price of condominiums is primarly due to the pent up demand for second homes and investment properties in Miami. In today’s market, it is not uncommon to find multiple cash offers on condominums in desirable locations and somewhat “stable” condo projects.  Additionally, according to the MLS data on the sale of bank owned condos in the Miami Beach area priced at under $500,000, more than 80 percent of all closed sales were all cash transactions. Additionally, there were several examples where the purchaser closed at a price up to 25 percent over the asking price.

The majority of properties trading in the lower price ranges continues to be dominated by distressed properties.  While buyers appear to be having more success closing on short sale deals with financing, if you are looking to be competitive and negotiate terms, be prepared to come with an all cash offer.

Featured Sales - 

800 S Pointe Dr #1203, Miami Beach “The Apogee”

Balconies in the Apogee feature complete outdoor kitchens

According to Miami Dade Public Records, attorney Jan Carson Cheezem of Cohen Fox P.A. in Miami, purchased this 3 bedroom 3.5 bathroom luxury condo in The Apogee on South Beach for $3.8 million or $1,378 per square foot. This unit on the 12th floor, which overlooks Miami Beach to the north, downtown Miami to the west and the oceanbeach to the east, was on the market for 248 days with an asking price of $4.1 million.

1200 West Ave #807, Miami Beach “The Mirador”

The Mirador apartment buildings located on West Avenue in South Beach, were built in the 1960’s and then converted to condominiums by the developer and condo converter Crescent Heights in 2005. With lines of prospective buyers camping out on West Avenue the entire week before the developer opened sales to the public, this condo project was the epitomy of condo conversion frenzy during the Miami real estate rush. This 1 bedroom 1.5 bathroom corner unit with 1,019 square feet of living area, was originally sold by the developer in 2005 for $265,900, then flipped four months later for $383,000, and again six months later in May 2006 for $515,000, only to be taken back by the subprime lender, New Century Mortgage, in December 2008. In this most recent sale last month, the purchaser paid $147,000 or $144 per square foot.

The data used to generate this chart/data is gathered from the Multiple Listing Service (“MLS”) and the Miami Dade Clerk of the Courts. The data in the MLS is deemed reliable but not guaranteed. This data is for August 2009 for single family homes, unless otherwise indicated as condominiums/townhomes. The prices are the actual sales prices of all single family or condos/townhomes that closed during the month of August 2009 and are published in the MLS as of the date of this post.

The Fontana South Beach

PRICE : $299,000 **CLOSED SALE $279,900**

Description |  Fantastic high-end MIMO revival, one of South Beach’s most touted condo conversions artfully completed in 2007. Front corner unit w/ balcony offers everything a buyer seeks – superb location, assigned parking, pool, secured entry, impact windows/doors, washer/dryer, teak wood floors. Stunning loft-style Kitchen w/ sleek stainless/glass cabinets, carrera marble, 36″ gas range w/ grill, double dishwashers, microwave, wine cooler. Duravit bath w/ rainshower. Custom master closet. Call or email us today to view this unit -305.673.5300 or info@miamiangelproperties.com.

Address | 1601 West Ave #101, Miami Beach  -   map it

Property Type | Condominium
Year Built | 1962
Living Area | 691 SF or 64 m2
Bedrooms | 1
Bathrooms | 1
Waterfront | N

Download a full description (PDF):

1601 West Ave U101 (Right click the link and choose “Save link as”)

Surviving A Short Sale Swamp

A short sale transaction is like pulling your Achilles tendon.  It’s painful, needs lots of massaging, plenty of ice, and it keeps reminding you that it’s not going away for a very long time.

After working diligently with a listing agent and seller on a short sale for four months, when the bank and investor finally offered us verbal “terms” to make it happen, my client quickly accepted and was jumping with joy. But the seller had a different plan and pulled a white rabbit out of his hat. Out of left field one of his “relatives” popped up with an all cash offer and we were left high and dry.

Totally unethical, yes, but in reality something totally out of our control. So what are banks doing to avoid just these types of situations?  Not much.

If you find the “Holy Grail” and the bank issues you with the final short sale approval letter, it should stipulate some or all of the following terms and conditions:

• Notification that they will accept a short payoff.
• An approval “exclusive” to the buyer referenced in the letter.
• They may pursue a deficiency judgment for the difference, unless agree to otherwise or prohibited by law.
• If the loan is covered by mortgage insurance, the mortgage insurance company reserves the right to pursue the seller for the deficiency as well.
• The closing must take place on or before a specific date, which is typically 30 days from the approval date.
• The approved sales price and name of the buyer.
• Another buyer may not be substituted without the prior written approval of the bank.
• A detailed breakdown of the closing costs associated with the transaction as of a specific date, including real estate commissions, total closing costs and any allowances for the junior lien holder, HOA liens, repairs and/or inspections.
• The minimum net proceeds to the bank.
• The amount of funds to be contributed by the seller, which may be in the form of a promissory note to be signed and returned to the bank upon the close of escrow, or a certified funds contribution.
• Seller shall not receive any proceeds from the transaction.
• The property must be free and clear of liens and encumbrances, other than those recognized on the approved HUD-1 settlement statement.
• There are to be NO transfers of the property within 30 days of closing.
• If the seller is entitled to receive any proceeds for insurance claim on the property, or any other proceeds, the bank reserves the right to retain or claim the proceeds.

Navigating your way successfully through Phases One, Two and Three, as some real estate professionals like to put it, is quite some task, even for an experienced broker. I am confident that any of my real estate colleagues will attest to such a bumpy ride.

My advice is to ensure that you stay on top of your seller, keep your short sale addendum valid, and you may want to consider adding an addendum giving your buyer a right of first refusal should the bank counter the terms of your contract.

It’s challenging to hold together a short sale, yes, it’s a real Florida swamp.