Miami Foreclosure List Is Gold Mine for Low-Priced Condos- By: John Cutts
Investors looking for low-priced condos can find them in still high number in any Miami foreclosure list, based on the number and frequency of foreclosures on condo projects in the Miami area over the past months.
The average prices for condos have been falling since 2006 when the market started to bear the weight of condo overbuilding in the Miami area. Analysts said that condo prices have dropped by a total of 45 percent since 2006.
Just recently, units in several condo projects in the Miami area have been added or are in the process of getting added to repo homes listings, including units at Filling Station Lofts in the Miami arts district, the Bel Aire condo complex in Miami Beach and the condo towers of Biscayne Landing project.
The Filling Station condos were foreclosed upon in August last year by Versa Capital, which bought the $26.9 million condo loan from Ocean Bank in April last year. The original loan, amounting to $3 million in 2005, was further increased to a $26.9 million construction loan in 2006. Versa Capital filed a foreclosure case against the property in August 2009 to collect $23.6 million.
However, the case to put the Filling Station condo project into a Miami foreclosure list could be thwarted by an involuntary bankruptcy case filed by four creditors, namely Biscayne Construction Company, Gulf Plumbing, B&R Engineering and Budget Construction. The developers owe these contractors more than $1.39 million.
A big condo project with portions already in foreclosures listing is the ambitious residential and commercial project in North Miami called Biscayne Landing. This project was envisioned to be a model private-public development project, planned to feature almost 6,000 housing units and a mix of hotel, office spaces, commercial spaces and a sports training facility.
But because of the economic downturn that battered Florida, as shown by its high ranking on charts of foreclosures homes by state, Boca Developers was only able to construct the 373-unit Oaks condo tower at Biscayne Landing. A total of 160 units at Oaks are scheduled to be auctioned off in May if Boca Developers cannot come up with $35 million to pay its loan owed to iStar.
Additionally, Boca also owe First Boston and Credit Suisse a total of $206 million in construction loans. An auction for the development rights has been scheduled for July, covering the foreclosed $45 million portion of the loan.
The condo units at the Oaks are expected to inflate another Miami foreclosure list if iStar would ultimately take back the units.
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