Need Help with Virginia Beach Condo Analysis

[Ever Espana]

Hi Everyone,

I need help to determine if this is a good deal to get into or not. I will try to give all the details without making it too long.

We have a developer in VA Beach who has 32 units recently built about 2 years ago. Only 4 units sold. The developer has a deal with the bank to keep 11 units, which he will rent and later sell.

Right now, the bank is considering a shortsale offer for the 17 remaining units. The units are on the water and near Navy base, so the units are desirable for rentals or for resell.

The problem with the units was they were overpriced at the time they were completed and the market crashed, the developer hesitate on offers because he thought they were to low and he wanted to wait to see if the market came back. Which as we all know didn't happen.

So now rather than foreclose, he has made a deal with the bank to keep 11 units, which he is buying. The bank will sell the rest and provide 100% financing at 5% for 7 years for new buyers. The market value for the units is $225-250k. The sqft is between 1600-1800sqft. (3-4 br). The rental market for these units would be 16-1800/mo.

My question is should we try to get these 17 units to sell or rent. If we were to resell, I think the most we could pay is $150k each, that way we could rent them if necessary.

Would the experienced developers or investors dealing with these situations with banks and condo's advise if we should try and work this deal or stay away from it. Maybe they can be sold with owner financing at a higher price.

How can you profit from this transaction with the least amount of risk.

Thanks,

Ever