Need local opinion re this property
What do you guys think?
TAMPA
http://www.loopnet.com/xnet/mainsite/listing/Profile/Profile.aspx?LID=17940507&PreviousLinkCode=10850&PreviousSourceCode=1lww2t006a00001&&LinkCode=10850&SourceCode=1lww2t006a00001
tried inserting the link, no luck!
To get more feedback you'd probably want to state where it's located.....
This one is in Wesley Chapel, FL (Pasco County) in the north Tampa Bay area (maybe that'll hit some people's keyword alerts).
What you're looking at here are 19 condos and not an apartment building. It's a failed condo development at that with most lots undeveloped. I'd have to see the sellers numbers to give you feedback on the CAP rate but my guess is it's completely fabricated. The average condo around here has COA dues north of $300/month so I doubt at that price you'd see anything close to a 10 CAP after expenses. With it being such a mess I'd imagine the COA dues could be even higher and resale of the units would probably be extremely difficult unless the rest of the units are constructed, sold and stabilized.
If you want to buy the rest of the developer's trash heap in that complex you can see it here http://www.prucomm.com/listings/5937
It depends on how this condo complex fits in to the larger development, especially when it comes to maintenance of the infrastructure. The PUD will have these details. You may be dealing with a Condo and Homeowner's association, so be careful.
It looks like there are very few rooftops built to maintain the roads already built, and if the builder has bailed, its the responsibility of the owners of the existing condos to make up any shortfall in the master association (assuming there is one). This means that the real association dues can be much more than the monthly dues, as there may be special assessments at year's end. You will really need to dig into the HOA / COA financials and agreements to find that out, as well as the details of the agreement with the "country club."
That being said, the nearby comps are .60 to .80/sf which would put these units at around $700-900/ mo range gross. That doesn't leave a lot of room for condo fees, etc. Its not a terrible area, but caveat emptor. Best of luck,
Ben
Ardijan I tell my clients to stay away from fractured developments like this where you have limited control.
You do not want 1,500,000 liability for an investment and not have oversight over all the development.
I would pass and look for something you have control over the whole look and feel of the complex. I would own all of this or none of it and the price would have to be really cheap to put the time and resources in to make the whole project a success.
Hey Ardijan
This is about 5 miles from my place. I wouldn't say the whole area of Wesley Chapel but a good 85% of the homes, especially condo's are loaded down with CDD fees. Not to mention the mass exodus in 2006 (before the crash) because of all the shoddy building. I personally had a friend buy a condo new in that area about 1/2 mile from there. They had structural problems, mold problems and sinkhole problems all through that area. I'd really recommend staying away from Wesley Chapel and the very north part of New Tampa. These places were built during the height of the mania and very little due diligence was done on the land and almost no oversight on the building construction.