Strategies for profiting off of the Florida Condo Crisis?

[James McGovern]

What are some good Strategies for profiting off of the Florida Condo Crisis?

[Randall Alan]

@James McGovern

I really don't see any up front angle on this situation. It's lose-lose for those that own the condos. What is likely to happen is that people who have financed properties could walk on their investments, or do a deed in lieu of foreclosure if they have very little equity. I'm sure those who cannot afford the assessments will just stop paying and that will send those properties into foreclosure with the first position lenders foreclosing. I'm not sure where that leaves the HOA in regards to needing each unit's contribution to fix the property? Will they be able to maintain that charge against the unit when a new buyer comes in?

Many of those that do stay and pay will be upside down on their investments if they have to pay some large fee for structural repair. Others will attempt to sell and probably include the condo surcharge in the price of their sale.  But it becomes a much less attractive investment to an outsider when you know you could be facing future special assessments like that.  

Think about this from an investor perspective.  Maybe you were clearing $500-1000 a month as a rental, and now your profit just evaporated for the next 10 years (or what have you!) where you take out a new mortgage to pay the assessment!

With all that risk and unknown, I wouldn't be going there until all of this settles out!

All the best!

Randy