Earlier this week I had my first intimate dinner with 1399 of my friends at the Harbourside Event Center in downtown Fort Myers and last night I ate with another thousand or so people at The Ritz in Naples. They both served chicken. But the similarities stopped there. The first was a "for profit" venture - The Market Watch - a presentation given by Frank D'Alessandro and Denny Grimes about market conditions here in Lee County. The second was a fund raising event with syndicated talk show host Neal Boortz as the guest speaker and the main topic was The Fair Tax.
First let me mention The Market Watch. My son Christopher and I were hosted by Christina Boyhan of First Horizon Construction Lending. First Horizon had reserved two tables for clients and friends and the always charming Christina even had to juggle some overflow to other tables. The speakers addressed sold out crowds and discussed both the commercial (Frank) and residential markets (Denny). Frank spoke first and his conclusion on commercial was absolutely brilliant (In other words I agreed with him).
Commercial is where to put our money now. Vacancy rates on commercial properties remain at unprecedented lows and construction and development activity is high. Rents are increasing in response to very tight supply.
Denny had a more sobering picture to paint on the residential market and while he is as optimistic as I am in the fundamentals of the market, a severe over-supply of inventory has caused an apparent softening of the market. His charts did show demand only slightly decreasing on the resale market but supplies are souring. Unfortunately he is unable to track new inventory and sales unless they are on the MLS. This is, in my opinion, a big hole in the data. You can read a review of the meeting that was in the News Press here (http://www.news-press.com/apps/pbcs.dll/article?AID=/20060222/RE/602220443/1014/BUSINESS)
The remarkable thing to me was the elephant in the room that was ignored. What was not talked about at the meeting, at least by the presenters - is the downtown high rise market and downtown development in general. Here developer inventory will far outpace absorption in the mid term future. Beau Rivage, the first project completed, is still very far from being absorbed by users and if all the proposed projects get to the construction stage, there will be even more competition for end users.
In my opinion, now is not the time to get into preconstruction residential buying unless you are buying for your end use or you plan on holding at least two years after closing. Now IS the time to look for deals - and we have them, by the way. Now it is more important that ever to buy smart. I also suggest buying projects that are already out of the ground.
Next to The Ritz. The event was Quest 2006, a three event series as a fund raiser for Quest. (http://www.questforkids.org/). We had the pleasure of a pre-dinner drinks and conversation with Neal and his wife, Donna . Boortz is a Libertarian talk show host that has been on a campaign lately for The Fair Tax. (http://www.fairtax.org/). He gave a very convincing presentation for about 45 minutes after dinner about why we should go to the federal consumption tax . I was convinced enough take home a signed copy of his new book. I started it last night. I suggest you check out the web site link above.
Oh, back to the chicken. The information and networking were unsurpassed at Harborside, and I commented to Gail when I got home that I was impressed that my pastry wrapped chicken that we were served, while rather cool, was probably nourishing. But nobody does Ritz like Ritz does Ritz. The 1000 or so bejeweled guests were elegantly presented a hot and exquisite meal that bore no resemblance whatso ever to the chicken in Fort Myers ( or the price, by the way) But the absolute most memorable item of the meal was the edible real gold decoration on my key lime tort. Listen to Boortz on Monday morning. I am certain it will get mentioned. ( By the way, I ate mine)
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Now to business. I have many opportunities to discuss.
The Citadel (http://investinwaterfront.com/citadelpa3.shtml)We have some big changes in the project. The entire exterior is being renovated. Chemical treatment and cleaning of the roofs, all new paint, and a general sprucing up of the grounds. I was there this week and the west building is done. It looks brand new to me.
The developer has two good opportunities here. The first is that he is releasing two condos at $225,000. These are available until renovation is complete. Closing must be within 30 days.
The second opportunity is that the developer is offering four Citadel units with a lease-back at $1500 per month. This is an 18 month lease with sale prices at $269,000. My suggestion to investors or end users here: Buy a condo for $269,000. The developer will lease it from you for 18 months at $1500/mo. With the proper down payment and financing (We can help you there) these units will cash flow. You will have leveraged yourself into a condo close to the beach. In 18 months you can either move in, rent it, or sell it. Contact me to discuss your strategy here.
I have been telling you about office condo investing. I now can offer you two opportunities right here in South Fort Myers. Stand alone office buildings on Brantley Road off of Summerlin from $600,000 and up. This is so new for us that we have no web site yet for it. Ground breaking has begun and sold buildings will be completed before the end of the year. I rate these as an excellent buy. The strategy here is to buy for leasing (not flip). You can buy for as low as $237/sf. Ideal for medical, by the way. Email me at gregg@ma-realty.com. Signs are not even up yet and six of the eighteen buildings are sold.
The second opportunity is Cyperlin Center (www.cyperlincenter.com) This will be the premier building in Fort Myers. Call me to discuss. By the way, the website is up now, please take a look at Christopher’s work. I think he has done an excellent job of getting my message on the opportunity out. If you live in luxury, you should work in it. Take a look at www.CyperlinCenter.com. If you buy preconstruction, we will handle leasing for you. I do not suggest this as a flip, but a buy, hold and lease.
____________________________________I get many questions about condo hotel investing. I have never done it., but I have said that I think is a wonderful deal for the developer, but not so good for you. There was an EXCELLENT article in today’s Wall Street Journal. I can't provide you a link, but if you are even thinking about this get a copy of today's WSJ (February 25th). The conclusion? The purchase may be good if you want to use it, but probably not good as an investment. Resale history is not good. If you do buy, treat it as if you were selecting a hotel. In other words, get near the attractions (the beach, the restaurants, the airport etc.).
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Market America Realty and Investments, Inc. is growing. Look for an announcement next week of three more additions to our professional staff.
By the way, I am very proud of what we have done with Market America Realty and Investments and I want to remember to thank all our service providers, our customers and our suppliers.
We are a company with a vision. To me, that vision is very clear. It is our primary goal to serve our clients, not our pocketbooks. We are relationship builders, not just short term problem solvers. Whether you are a residential buyer or an investor, after meeting with you we should be able to tell you:
"This is where you are heading, let us show you the way".
As a buyer you have many opportunities and many alternatives. The large inventory of homes, condos and investment possibilities makes decisions even harder. You need an experienced professional that understands your objectives and your needs. Let us help you figure out where you are heading and let us help you get there. Email Tatiana@ma-realty.com and ask her to put you in touch with one of our professionals.
Thanks you for your business and thanks for your comments.
GreggGregg@ma-realty.com
Saturday, February 25, 2006
Sunday, February 19, 2006
Take the Tours
Gail and I spent our first night in our new home yesterday. We have been preparing the home and "moving in" for the last three months. I had been joking with friends that we have a "sleeping house" and an "eating house". The last three months we spent renovating our new waterfront home and gradually moved everything into it save clothes and bathroom items. But walking over for sunset cocktails and dinner and then coming home to sleep was taking its toll. Now that we have moved out, our home on Gasparilla (Take the Tour here) will always be ready for prospective buyers to tour.
I did hold it open yesterday and had eight couples come through. Of those I believe three were actually in the market for a home. I will hold it open for tour today as well. One thing that always surprises me about open houses is the almost total absence of Realtors touring. I believe that in the few dozen times I held this home open a total of two Realtors came to preview for knowlege of the market. Future buyers seem to have no trouble previewing a house months before they atually decide to buy, but I believe agents that proport to know a neighborhood should see all the homes in their niche...and most do not. My advice to those of you that are trying to select a Realtor to work with; ask them how well they know the type of product you are looking for. Has the Realtor that is asking for your listing seen the other homes in the area first? Did they ever tour your home when it was listed with someone else?
At Market America our residential agents know condos. In particular we know waterfront and preconstruction condos. This is our area of expertise. We normally will have one agent that will "quarterback" a community and be the source for the inside scoop. But we all like to tour the project, know the floor plans, and in particular we like to show them to prospective buyers so we can see the condos from the buyers view point. If we can, we will have a sales meeting at a project so we can further immerse ourselves in the surroundings, the layout, and get to know the on site sales people. We do not like to have just one listing in a community. It is inefficient. It's inefficient from a marketing sense as well as from a knowledge sense.
We are starting to do work with a little advertised project called Rivers IV. After the entire team visits a project we have a focus group about it. What do we think about the location? The price? The name? How can we best market this community? Indeed, is it worth promoting to our clients? We have concluded that Rivers IV is a winner - we love the location, the pricing, and the quality. Let us give you a tour!
Other projects we have immersed ourselves in:
Paramount at the Shores in Gulf Harbour. Our entire team has been there on a number of occasions and in fact we will host a sales meeting there later this week.
Two weeks ago we were all at Grand Isle in Burnt Store. This is my pick as best buy for waterfront condos.
At The Citadel we host constant open houses. We can do that because we specialize in the community. We know the condo docs, the floorplans, the neighbors. The Citadel is a great buy and near the beach and beach trolly. Of course there are many fine communities that we do not promote. This does not mean that they are not worthy, it just may mean that we have not immersed ourselves them yet.
In a previous column (Click Here) I talked about the need to examine alternatives as a backbone of real estate investing. I have talked alot about this with my associates since I wrote that. The point was brought up that if you are always looking at your alternatives, you will be a much wiser buyer (or seller). If you are listing your home or condo with a Realtor, ask them about all your potential buyer's alternatives. You should know your competition or at least make sure your professional does. Ask your agent how many homes in your niche he/she has toured. How does your home compare? Are your prices right? Why would somone buy your home rather than another one? Is there something you should change?
When you are a buyer, if you look at a large number of homes by going to open houses, for example, you will already know your alternatives and when the right home comes along, you will be an informed buyer and prepared to make a quick decision.
_______________
The commerical market here is very hot, probably as hot as the residential market was two years ago. I have found that there are many buyers out there looking for income property and land bank deals and not enough properties to sell them. Commerical deals do take a while to put together but I will be announcing some of my own projects for commerical condos. We will be announcing a project on McGregor Boulevard for office condos. These will be geared to the three to four person office and we are taking names for a private release now. Email Tatiana@ma-realty.com. Tell her you want to be put on the McGregor Condo List. We also have stand-alone buildings available preconstuction, completion before the end of the year. These are ideal for medical offices and you can design the build out. I like these purchases as an investor. Email me at Gregg@ma-realty.com for info.
My Cyperlin Center (www.CyperlinCenter.com) project is moving along very nicely. We have added a penthouse amenity level that will bring class A office space to a new level in the town. My feeling is that you live in luxury, why not work in it? Check out the new ad by clicking the above link. I have also added four 2500sf office condos to the mix and three of them are still available for reservation at $1,250,000 a piece.
Thanks for your comments and emails
Gregg
I did hold it open yesterday and had eight couples come through. Of those I believe three were actually in the market for a home. I will hold it open for tour today as well. One thing that always surprises me about open houses is the almost total absence of Realtors touring. I believe that in the few dozen times I held this home open a total of two Realtors came to preview for knowlege of the market. Future buyers seem to have no trouble previewing a house months before they atually decide to buy, but I believe agents that proport to know a neighborhood should see all the homes in their niche...and most do not. My advice to those of you that are trying to select a Realtor to work with; ask them how well they know the type of product you are looking for. Has the Realtor that is asking for your listing seen the other homes in the area first? Did they ever tour your home when it was listed with someone else?
At Market America our residential agents know condos. In particular we know waterfront and preconstruction condos. This is our area of expertise. We normally will have one agent that will "quarterback" a community and be the source for the inside scoop. But we all like to tour the project, know the floor plans, and in particular we like to show them to prospective buyers so we can see the condos from the buyers view point. If we can, we will have a sales meeting at a project so we can further immerse ourselves in the surroundings, the layout, and get to know the on site sales people. We do not like to have just one listing in a community. It is inefficient. It's inefficient from a marketing sense as well as from a knowledge sense.
We are starting to do work with a little advertised project called Rivers IV. After the entire team visits a project we have a focus group about it. What do we think about the location? The price? The name? How can we best market this community? Indeed, is it worth promoting to our clients? We have concluded that Rivers IV is a winner - we love the location, the pricing, and the quality. Let us give you a tour!
Other projects we have immersed ourselves in:
Paramount at the Shores in Gulf Harbour. Our entire team has been there on a number of occasions and in fact we will host a sales meeting there later this week.
Two weeks ago we were all at Grand Isle in Burnt Store. This is my pick as best buy for waterfront condos.
At The Citadel we host constant open houses. We can do that because we specialize in the community. We know the condo docs, the floorplans, the neighbors. The Citadel is a great buy and near the beach and beach trolly. Of course there are many fine communities that we do not promote. This does not mean that they are not worthy, it just may mean that we have not immersed ourselves them yet.
In a previous column (Click Here) I talked about the need to examine alternatives as a backbone of real estate investing. I have talked alot about this with my associates since I wrote that. The point was brought up that if you are always looking at your alternatives, you will be a much wiser buyer (or seller). If you are listing your home or condo with a Realtor, ask them about all your potential buyer's alternatives. You should know your competition or at least make sure your professional does. Ask your agent how many homes in your niche he/she has toured. How does your home compare? Are your prices right? Why would somone buy your home rather than another one? Is there something you should change?
When you are a buyer, if you look at a large number of homes by going to open houses, for example, you will already know your alternatives and when the right home comes along, you will be an informed buyer and prepared to make a quick decision.
_______________
The commerical market here is very hot, probably as hot as the residential market was two years ago. I have found that there are many buyers out there looking for income property and land bank deals and not enough properties to sell them. Commerical deals do take a while to put together but I will be announcing some of my own projects for commerical condos. We will be announcing a project on McGregor Boulevard for office condos. These will be geared to the three to four person office and we are taking names for a private release now. Email Tatiana@ma-realty.com. Tell her you want to be put on the McGregor Condo List. We also have stand-alone buildings available preconstuction, completion before the end of the year. These are ideal for medical offices and you can design the build out. I like these purchases as an investor. Email me at Gregg@ma-realty.com for info.
My Cyperlin Center (www.CyperlinCenter.com) project is moving along very nicely. We have added a penthouse amenity level that will bring class A office space to a new level in the town. My feeling is that you live in luxury, why not work in it? Check out the new ad by clicking the above link. I have also added four 2500sf office condos to the mix and three of them are still available for reservation at $1,250,000 a piece.
Thanks for your comments and emails
Gregg
Saturday, February 11, 2006
A Rising Tide Raises All Ships
I talked last week about the real estate wave and the stage we are in now. The tide is still rising, but the waves are receding right now. Jerry Starkey of WCI reported in the News Press today that traffic in his sales centers is down 49% from one year ago. (Article here) Sales, however, have been steady and he still expects a very healthy year. Since last year the number of projects that have opened sale centers has more than tripled. Heck, we study the market and it is even difficult for us to keep up with all the new communities. Flipper investors are rightfully taking a cautious approach or have left the market. There are more condos than buyers and it will take some time for the rising tide of buyers coming here from the north to absorb the high inventory of products. In short, there are deals out there now and it is a great time to buy.
My suggestions are to get out and take the time to tour existing projects - even ones that may not be exactly what you are looking for. Learn what is being built today. Look at all your alternatives. Look at the bricks and mortar so you can better understand printed plans and promises.
(Note: Last weeks column went out via new software and many of you did not get it. (Click here of you didn't and want to see it). I am going back to my old software; it's slower, but hopefully more reliable. There also seems to be some sort of global email problem this past week. Many of my emails during the business week also did not get to their recipients.)
Gail and I had the opportunity to attend the Symphony fund raiser at Riva Del Lago this last Thursday night. John and Lucy Armenia of The Armenia Group ( The Developer of Riva) and Kevin and Terri Manning of BBL ( The Builder of Riva) took Gail and I on a tour of this truly World Class project. If there was ever a case of "you gotta see it to appreciate it" Riva Del Lago is one case. If you would like to arrange a tour, please email Tatiana or call 239-425-0771. We will arrange to have one of our agents get you in. Another one you MUST see is Paramount at The Shores in Gulf Harbour. Email Kathy for a tour of Paramount. You will have to wear one of our nifty hard hats, but it will be worth it. Paramount will be completed in a few months.
Today ( Saturday February 11, 2006) Gail and I and many of our team will be at Grand Isle in Burnt Store Marina for a Grand Opening and tour of about thirty condos. Please come up and visit with us. Gail and I will be in Grande Isle II 602 which we are offering for sale. This tour will give you an opportunity to see and compare a large array of condos and price ranges. Burnt Store Marina is Southwest Florida's largest deep water marina - and Realmark has recently purchased the amenities in the complex from WCI. I believe this will have a very positive effect on prices and the quality of the community. (Realmark Presentation here)
What's new?
Paradise Preserve struggles for approval. (Article Here) The 158 condo midrise has hit a snag.
Cyperlin - We have added an eighth floor amenities level that will make this office center seem more like a luxury home than an office. The penthouse will house a 5000 square foot lifestyles center with library and board room, a fitness center with showers and lockers, and a living/dining area for lunches and relaxing breaks from the office. We are now taking reservations for condos here, starting at $2,000,000. Completion in late 2007.
I expect a new project just the other side of the Cape Coral bridge. Midrise residential condos, with slips. The property is being entitled now and we should be hearing something about the details by summer.
Like marina communities? I also expect at least one more large project up river from town. 225 condos with 125 deep water slips. We will be first to have info on the project when we are given clearance to release.
Please check our communities page for other new projects. Tatiana and Holly update info daily, so come often.
Thanks for your emails and Comments.
My suggestions are to get out and take the time to tour existing projects - even ones that may not be exactly what you are looking for. Learn what is being built today. Look at all your alternatives. Look at the bricks and mortar so you can better understand printed plans and promises.
(Note: Last weeks column went out via new software and many of you did not get it. (Click here of you didn't and want to see it). I am going back to my old software; it's slower, but hopefully more reliable. There also seems to be some sort of global email problem this past week. Many of my emails during the business week also did not get to their recipients.)
Gail and I had the opportunity to attend the Symphony fund raiser at Riva Del Lago this last Thursday night. John and Lucy Armenia of The Armenia Group ( The Developer of Riva) and Kevin and Terri Manning of BBL ( The Builder of Riva) took Gail and I on a tour of this truly World Class project. If there was ever a case of "you gotta see it to appreciate it" Riva Del Lago is one case. If you would like to arrange a tour, please email Tatiana or call 239-425-0771. We will arrange to have one of our agents get you in. Another one you MUST see is Paramount at The Shores in Gulf Harbour. Email Kathy for a tour of Paramount. You will have to wear one of our nifty hard hats, but it will be worth it. Paramount will be completed in a few months.
Today ( Saturday February 11, 2006) Gail and I and many of our team will be at Grand Isle in Burnt Store Marina for a Grand Opening and tour of about thirty condos. Please come up and visit with us. Gail and I will be in Grande Isle II 602 which we are offering for sale. This tour will give you an opportunity to see and compare a large array of condos and price ranges. Burnt Store Marina is Southwest Florida's largest deep water marina - and Realmark has recently purchased the amenities in the complex from WCI. I believe this will have a very positive effect on prices and the quality of the community. (Realmark Presentation here)
What's new?
Paradise Preserve struggles for approval. (Article Here) The 158 condo midrise has hit a snag.
Cyperlin - We have added an eighth floor amenities level that will make this office center seem more like a luxury home than an office. The penthouse will house a 5000 square foot lifestyles center with library and board room, a fitness center with showers and lockers, and a living/dining area for lunches and relaxing breaks from the office. We are now taking reservations for condos here, starting at $2,000,000. Completion in late 2007.
I expect a new project just the other side of the Cape Coral bridge. Midrise residential condos, with slips. The property is being entitled now and we should be hearing something about the details by summer.
Like marina communities? I also expect at least one more large project up river from town. 225 condos with 125 deep water slips. We will be first to have info on the project when we are given clearance to release.
Please check our communities page for other new projects. Tatiana and Holly update info daily, so come often.
Thanks for your emails and Comments.
Saturday, February 04, 2006
Not the Bubble - The Wave
I never really understood the bubble analogy. It brings am image of a layer of soapy water pushing up a molecule thin layer of iridescence and then bursting into nothingness. A bubble has no support, has no power, no substance. If you follow local real estate market as closely as I do, you realize that the bubble talk is a media invention, and as Lee County Property Appraiser Ken Wilkinson said at last Friday’s CCIM breakfast meeting, if it weren’t for the constant questioning of the media about a bubble, the talk would melt away in the face of this strong economy.
The current real estate market in Southwest Flordia has power, sustenance, and the momentum that will continue to push development and the requisite sales that feed that development. I prefer a wave analogy. We are now in the interval between single powerful waves exploding on the beach during a rising tide. The baby boomers are our rising tide, with long term demand creation. The gap between absorption rates and building completions are creating our waves. The waves going in and out will not lessen that rising tide of demand. The important thing is to know the difference and where opportunities lie.
Savy buyers are making their deals now, in between the waves. Just like a shell collector chases the receding waves before the tide rises.
Preconstruction Opportunities.
Many look at preconstruction opportunities as a sure thing. They are not. They are opportunities for both the buyer and the developer but and they are not risk free. When a buyer reserves a preconstruction home, he locks in his price and is given the opportunity to spend 18 to 24 months planning. The good news is that as a potential buyer your only risk is “opportunity cost”. If the reservation is cancelled or the contract returned, you get all your money back, but you may have lost an opportunity elsewhere. That opportunity may have been another pre construction buy, or it may have been a CD rate of return.
The developer, on the other hand, starts preconstruction sales to achieve his pre-sale requirements and to gauge his market while he entitles and plans his project. During this process he continues to spend his money.
There are a number of reasons a project will not go through tp construction: Costs; Entitlements; Sales:
Costs. In some cases the developer’s costs may have increased faster than anticipated and his margins have eroded past the point of a do-able venture. He may have taken reservations at too low a price or taken them too early.
Entitlements. In other cases his entitlements (zoning, height permissions, set backs, density, etc.) may not allow him to do the project as anticipated. Lack of proper entitlements will either kill the project totally or so drastically change the economics as to make the project impractical.
Sales. I have not seen lack of sales hurt a project in our market, but indeed, if the developer can not reach a minimum threshold of sales by a certain time, he may not even start the project.
On the cost issue, I have had buyers tell me, “Well too bad; they made a deal with me and I want them to honor the price.” Personally however, I neverwant to be in a situation where the builder is trying to meet a price point under duress. I don’t want any corners cut on my condo. Do you?
Smart buyers ask about the three points above.
“Do you currently have a firm bid are your costs?” If the developer has not selected the builder yet, you can be pretty darn sure that they have no lock on their costs. Also ask about entitlements and sales requirements.
But, if they are not entitled and they do not have a firm bid on costs, this does not mean that this is not a wonderful opportunity, it only means that there is a chance that your contract will not go through, or that later sales will be at a much higher price – which is good for you. You are taking a relatively small risk, your “opportunity cost” for a potential large reward.
The size and reputation and experience of the builder, by the way, while important, does not preclude the need to ask these questions. An experienced builder may be even more likely not to proceed than a smaller less experienced one.
The opportunities between these waves right now are on existing projects or projects that already are under construction. I like the following projects for various combinations of value, location, and quality. All of these are under way or completed.
The Paramount at the Shores – we now have the opportunity to sell condos here that are undoubtedly the best marina front homes in a mid-rise that we have ever seen. For the past four month Gail and have been admiring The Paramount from the deck of the yacht “Scandalous”, who belongs to our dear friends Richard and Sandy. You see, the view of The Paramount from the Gulf Harbour Marina is stunning. Al lthe pasenges would comment on it obvious fantastice views. Our first guided tour inside the building did not disappoint us. Ronto (The Developer) and BBL (The Builder) outdid themselves with this project that will be completed second quarter 2006. The amenities and the views are unsurpassed in Lee County. Indeed the term “luxury” is over used in this town and certainly at The Paramount there needs to be a new superlative. Since construction is under way you will need to contact Kathy Brewer to make an appointment to take a privatetour.
Grande Isle. This coming Saturday (Noon to 5PM) there will be a Grand Opening and over 30 models will be open for inspection. I list this as best value for Marina Front living. If you have not been up Burnt Store Road lately you need to see the progress for your self. At Grand Isle we also have a few leasebacks available. Come see some decorator furnished models on Charlotte Harbor at South West Florida’s largest deep water marina. Virtual Tour Here. Email Deb Krikorian for open house details. Gail and I will be there all day by the way, and we would love to meet some of my readers. We will be hosting in the furnished model.
Rivers IV This is actually a BBL Development project. John Sullivan of BBL gave Market America a private tour of the construction under way. This one is a hidden gem. BBL is quietly building this Cape Coral project and only a select few have even heard of it. The building sits right on the water and slips are available. Email Tatiana to set up a tour.
North Star Kemp Demming invited us for a private showing this week. There are only 30 units left and there is a reason for this. The prices are superb ( Kemp locked in his costs with BBL), the layout smart, and Kemp is very good at "under promising and over delivering". With special arrangement, Market America agents can get you a special pricing here. But this is only for contracts executed in February. You will be hearing more about Mr. Demming and his next projects in future columns.
Bella Terra and Island Cove are two completed communities that have some wonderful opportunities where early buyers want to sell.. Email Deb Krikorian for more info.
The Citadel For price and location, you will do well at The Citadel . This well established project with prices starting at $249,900, has just announced a total renovation and face lift. Less than four miles from arguably the best beaches in Florida. Remember Location, Location, and Location. Email Tatiana for more information.
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© Copyright 2006 Gregg A. Fous All Right Reserved
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The current real estate market in Southwest Flordia has power, sustenance, and the momentum that will continue to push development and the requisite sales that feed that development. I prefer a wave analogy. We are now in the interval between single powerful waves exploding on the beach during a rising tide. The baby boomers are our rising tide, with long term demand creation. The gap between absorption rates and building completions are creating our waves. The waves going in and out will not lessen that rising tide of demand. The important thing is to know the difference and where opportunities lie.
Savy buyers are making their deals now, in between the waves. Just like a shell collector chases the receding waves before the tide rises.
Preconstruction Opportunities.
Many look at preconstruction opportunities as a sure thing. They are not. They are opportunities for both the buyer and the developer but and they are not risk free. When a buyer reserves a preconstruction home, he locks in his price and is given the opportunity to spend 18 to 24 months planning. The good news is that as a potential buyer your only risk is “opportunity cost”. If the reservation is cancelled or the contract returned, you get all your money back, but you may have lost an opportunity elsewhere. That opportunity may have been another pre construction buy, or it may have been a CD rate of return.
The developer, on the other hand, starts preconstruction sales to achieve his pre-sale requirements and to gauge his market while he entitles and plans his project. During this process he continues to spend his money.
There are a number of reasons a project will not go through tp construction: Costs; Entitlements; Sales:
Costs. In some cases the developer’s costs may have increased faster than anticipated and his margins have eroded past the point of a do-able venture. He may have taken reservations at too low a price or taken them too early.
Entitlements. In other cases his entitlements (zoning, height permissions, set backs, density, etc.) may not allow him to do the project as anticipated. Lack of proper entitlements will either kill the project totally or so drastically change the economics as to make the project impractical.
Sales. I have not seen lack of sales hurt a project in our market, but indeed, if the developer can not reach a minimum threshold of sales by a certain time, he may not even start the project.
On the cost issue, I have had buyers tell me, “Well too bad; they made a deal with me and I want them to honor the price.” Personally however, I neverwant to be in a situation where the builder is trying to meet a price point under duress. I don’t want any corners cut on my condo. Do you?
Smart buyers ask about the three points above.
“Do you currently have a firm bid are your costs?” If the developer has not selected the builder yet, you can be pretty darn sure that they have no lock on their costs. Also ask about entitlements and sales requirements.
But, if they are not entitled and they do not have a firm bid on costs, this does not mean that this is not a wonderful opportunity, it only means that there is a chance that your contract will not go through, or that later sales will be at a much higher price – which is good for you. You are taking a relatively small risk, your “opportunity cost” for a potential large reward.
The size and reputation and experience of the builder, by the way, while important, does not preclude the need to ask these questions. An experienced builder may be even more likely not to proceed than a smaller less experienced one.
The opportunities between these waves right now are on existing projects or projects that already are under construction. I like the following projects for various combinations of value, location, and quality. All of these are under way or completed.
The Paramount at the Shores – we now have the opportunity to sell condos here that are undoubtedly the best marina front homes in a mid-rise that we have ever seen. For the past four month Gail and have been admiring The Paramount from the deck of the yacht “Scandalous”, who belongs to our dear friends Richard and Sandy. You see, the view of The Paramount from the Gulf Harbour Marina is stunning. Al lthe pasenges would comment on it obvious fantastice views. Our first guided tour inside the building did not disappoint us. Ronto (The Developer) and BBL (The Builder) outdid themselves with this project that will be completed second quarter 2006. The amenities and the views are unsurpassed in Lee County. Indeed the term “luxury” is over used in this town and certainly at The Paramount there needs to be a new superlative. Since construction is under way you will need to contact Kathy Brewer to make an appointment to take a privatetour.
Grande Isle. This coming Saturday (Noon to 5PM) there will be a Grand Opening and over 30 models will be open for inspection. I list this as best value for Marina Front living. If you have not been up Burnt Store Road lately you need to see the progress for your self. At Grand Isle we also have a few leasebacks available. Come see some decorator furnished models on Charlotte Harbor at South West Florida’s largest deep water marina. Virtual Tour Here. Email Deb Krikorian for open house details. Gail and I will be there all day by the way, and we would love to meet some of my readers. We will be hosting in the furnished model.
Rivers IV This is actually a BBL Development project. John Sullivan of BBL gave Market America a private tour of the construction under way. This one is a hidden gem. BBL is quietly building this Cape Coral project and only a select few have even heard of it. The building sits right on the water and slips are available. Email Tatiana to set up a tour.
North Star Kemp Demming invited us for a private showing this week. There are only 30 units left and there is a reason for this. The prices are superb ( Kemp locked in his costs with BBL), the layout smart, and Kemp is very good at "under promising and over delivering". With special arrangement, Market America agents can get you a special pricing here. But this is only for contracts executed in February. You will be hearing more about Mr. Demming and his next projects in future columns.
Bella Terra and Island Cove are two completed communities that have some wonderful opportunities where early buyers want to sell.. Email Deb Krikorian for more info.
The Citadel For price and location, you will do well at The Citadel . This well established project with prices starting at $249,900, has just announced a total renovation and face lift. Less than four miles from arguably the best beaches in Florida. Remember Location, Location, and Location. Email Tatiana for more information.
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