A few weeks ago I was at the county Foreclosure auction in Deland, our Volusia County seat. Deland is a nice quaint small town, home to Stetson University, and numerous local government offices.
A condo-hotel unit in Harbour Beach Resort in Daytona Beach was scheduled for the auction, and I was curious to see what happens to it, along with a few other properties to be sold at the auction.
We waited until they announce the priced up to which the Lenders were going to bid, otherwise known as the lowest the Lender would accept. The condo-hotel unit was not discounted and the lender was asking for about $35K (I do not remember the exact amount). We thought that nobody would be bidding on it, as the lowest price you could by a unit there now was $27K, but with no view. Still, for the auction that was not a bargain.
But we were wrong. A gentleman offered one dollar on top of the minimum set by the Lender, of course there were no other bidders and he got it.
I knew the prices in this condo-hotel, and though this was a nice unit, it was coming too expensive at $35K. I knew that Harbour Beach Resort has just completed concrete restoration, and if the Seller has not paid, that, together with any other unpaid maintenance fees, would become the liability of a buyer.
But the Buyer did not look clueless. He was the type of a man, that can do pretty much everything, those who were not afraid of rolling the sleeves.
I came up to the Buyer after the auction and asked him whether he owned other units in the resort. I was right, he had other units, and was hunting specifically this unit. He knew the prices in t he building and he was not deterred by paying relatively high. I asked him whether he knew of unpaid Association fee and assessments, and yes, he knew, he even had a printout. He would have to shell out about $21K on top of the purchase price (plus the doc stamps and court costs). So, he was buying a unit for $56K.
I could get you a unit in similar or better properties for less. And I told him that. It was not a surprise for him. And still he wanted this one. Intrigued, I asked him why.
Well, as I thought, he has another condo-hotel unit in Harbour Beach Resort. He fixes it very nicely and then he rents it himself. How is it going for him? Well, last year he had it vacant only 4 weeks. So, he had it rented 48 weeks at $549 at slow time. This is a great occupancy, and no hotel on the Beach can brag they can do it. His maintenance and taxes are about $4K-$4.5K, so he is getting rather good return on his investment.
It is not only the price, it is also the experience and knowledge. I am getting my clients better deals in terms of purchase price. But he is getting way better rentals. Sometimes I am surprise how people get attached to investment property.
Why would anyone in their sound mind hunt units in Harbour Beach Resort? No front desk, a property with a feel of the 70s and 80s… But really knowing what he could do there made it his niche, and he really makes it work for him. Even at $56K, that the unit would finally have cost him.
My hat is off to you, sir
If you in the market for a good deal, call me 386.405.4408
I write how I feel. So, do you really expect me to tell people that this is a great place?
Built in 1975, the Resort had seen better days. Until 5 years ago we considered it a nicer property and liked to bring our customers there. Then the property started slowly deteriorating, management and maintenance going down the hill.
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