‘Reconversion Trend Is Accelerating’
The USA Today reports on failed condo projects. “There’s relief in sight for some renters as the oven-hot real estate markets cool off: A huge number of new condos could be converted into rental properties over the next 18 months.”
“In Las Vegas, Phoenix, San Diego, Washington, D.C., and much of Florida, an estimated 25% to 40% of condos under development or apartments that were converted into condos for sale will be put back on the market as rentals, says an investment brokerage firm.”
“In recent months, though, the inventory of condos for sale has swelled. And buyers have vanished. Developers are turning condo projects into apartments or canceling them. Some landlords are inviting back tenants because they can’t sell the units.”
“The ‘reconversion’ trend is accelerating. In Atlanta, Lane Co. is all but abandoning condo development. Two of its current projects are now destined to be apartments.”
The LA Times. “The recent craze for converting apartment buildings to condominiums, which is drawing political heat in Los Angeles and elsewhere, may be slowed by market forces before City Hall has a chance to act.”
“One possible indication of a coming slump was the number of people willing to pay $1,800 for investment advice on the topic. Only about 50 signed up for a two-day West Coast Condo Conversion Conference.”
“‘Even six months ago, this room would have been packed,’ said Delores Conway (of) the USC Lusk Center for Real Estate, as she glanced around at dozens of empty chairs in the chilly auditorium.”
“With interest rates up, real estate prices stagnating and many new condo units coming on the market, the easy money possible for conversions two years ago is a thing of the past, Conway said. ‘The whole market has slowed down. The speculators are gone,’ she said. ‘I think condo conversions are always the last part of the cycle.’”
‘I think condo conversions are always the last part of the cycle.’
They are and that is why their appearance was a sure signal the end was coming. Why didn’t this lady make the connection?
IMO, the way these apartments got bid up in recent years means these ‘reconversions’ lost money for the developers.
Just curious - why exactly is it that condo conversions always seem to signal the end of a real estate boom? I’m sure it’s a combo of things but being that I live in a place that is “converting” now, I’m interested.
They are done because it is the quickest way to get in on a fading boom. RE experts like Jack McCabe have pointed out that condos are a similar tactic, but appear earlier. IMO, the key is to understand that these booms occur in cycles and there are recurring development patterns found in each stage.
In my opinion, it’s a manifestation of the economic concept of substitution. For most people here in the U.S., a single family house is the preferred type of structure for home ownership.
Condo conversions tend to gain momentum in the cycle when the prices of single family houses start to get beyond the reach of entry level homebuyers.
Back to your question - when a booming real estate market is approaching it’s peak, the condo conversions start showing up en masse to satisfy the demand of the priced out entry level buyers.
I agree to a point. But is it just coincidence that as the condo boom exploded the past few years, we were told that a ‘new urban living trend’ had emerged? Like the ’second home phenomenon’, it is likely a theory drawn up to explain part of a mania, after the fact.
The urban trend is real, driven by Starbucks, upscale dining, the reduction of crime, etc. As Gen y ages, they (as with every previous generation) want to be different from their parents. There is very little difference between suburban and urban living today as far as comfort and amenities. So why not live in the urban areas for cheaper and closer to attractions?
It’s too bad it was tied to the condo boom. I wholeheartedly agree with you on the ’second home phenomenon’.
THere is no urban trend. Hasn’t been an urban trend since the 1910 Census. Most large US cities are nowhere near their 1950 populations. There is no reduction in crime, crime has merely returned to very high levels from incredibly high levels. There are huge differences twixt cenurban and exurban living. Only prourbanist advocates trying to convince themselves say otherwise. Urban areas are far more expensive in total and indeed there are very few instances of specific elements being cheaper. The cenurbs were the last to pick up and will be the first to fall. The Condo phenomena existed only because people could not afford what they wanted. The urbanist blip existed only because of the inability of providing prefered residential options.
Guess I’m a little far from the action. What is cenurban?
Cenurban is core city, OPAC (Obsolete PreAutomotive City), inner ring, etc. You see the census and many other reliable demographers only delineate rural and urban. That doesn’t work when discussing built environment development patterns.
bingo, no one wants to actually live in a condo- it’s a 2nd or 3rd choice
Thanks all. And I agree, no one wants to live in a condo - it’s perfect to start with, when you’re single or a young married couple with a baby. But after that, it’s tight, particularly if you’re not a born and bred city dweller used to apartment living.
I agree that the whole urbanization trend is being used to justify the building of condos and conversions - I wonder if they said the same thing back in the late 1980s when the same thing happened in NYC? I think the whole trend is just that - a trend. It’s something many people will get bored of after a few years when they decide to relocate back to the ‘burbs.
‘I think condo conversions are always the last part of the cycle.’
This should read “condo conversions are the NEXT part of the cycle”. The whole point of a cycle is that there is no end, therefore, there can be no last part.
One of our jobs on this blog is to understand which part of the real estate cycle we are currently in and then make decisions based on that knowledge. Other people on this blog have already posted the many parts of the cycle.
Condo conversions were the previous part. Condo reconversions are the current part. Condo owners jumping to their death is the next part.
Just sittin’ here watching the wheels of this giant cycle goin’ round. I’m jumping in when we get to the “real estate is a bad investment, why own when you can rent” part. And then of course I’ll sell as soon as buyers agree to feed the squirrels.
I think we can now include Cruise Ship Condos for this phase of the cycle
You can rent a 3-4 bedroom house in PHX suburbs for less than most re-conversions. And get a garage.
“… And get a garage.”
That recalls the point made by another poster recently — that apartments rarely have garage parking and in most areas, zero apartment complexes have garage parking for all units. That is what makes them so easy to spot, relative to condos.
In northern Arizona, one can rent a $500k brand new home with a garage and on a golf course for $900-$1100/mo. And can take a pick among dozens. Of course, that means having a stuck flipper for a landlord, although there are a growing number of property managment firms handling the properties. I suspect that is because many ‘owners’ are out of state.
“A huge number of new condos could be converted into rental properties over the next 18 months.”
Based on the time frame, the worst time for landlords has yet to come. Rents should be significantly lower within 3 years. Renting out the homes they can’t sell is the only way to slow down the bleeding.
For fun, I called an ad (in Prescott) for a rental in a subdivision FULL of “for sale” signs…3/2, 3 car garage, landscaped, brand new, granite/stainless, etc…$1000 per month. Once I hesitated, the owner immediately cut the price and offered several other similiar homes in same development…turns out he lives in CA, owns 5, can’t sell any of them, will drastically cut the rent. This is just ONE development, just one of several hundred strewn across AZ.
Unbelievable. What were these speculators THINKING? (that’s a rhetorical question)
I know a lot of us have a mental picture of Joe Specuvestor in our head and we don’t feel bad for him/her one bit. The weird part is that I know a guy who did this…and he’s just a regular guy with a regular IT job. No real estate experience, no finance experience. It was just such a gold rush mentality. He figured experience didn’t matter. The money was so easy it was shooting fish in a barrel. I bet a lot of us on this blog know someone like this…?
I don’t feel sorry for him. It’s more that I feel embarrassed for him. Similar to the way we all feel when a friend tells us they bought a time-share. Kind of a cringing I’m-so-embarrassed-for-you feeling.
Gold rush mentality is right. Really, I knew the jig was up when the woman who usually checks out my groceries announced she was buying a 500K home, then would try to flip it. I tried (lamely) to tell her the market was changing (this was last July), but she shrugged it off and said it was a “sure bet…I got a great loan”.
I do feel sorry for some of these people. They are fed a unstop stream of pap that promotes prosperity, luxury items, and get rich quick schemes.
So many people got self-worth mixed up with net worth.
You are right about most of us knowing people like this. A co-worker/friend of mine in San Diego had “gold rush” fever really bad (Spring 2005) and was calling realtors in Arkansas, Oregon, Arizona, etc. He finally chose to “invest” in a condo in Phoenix AFTER I had numerous discussions with him about the danger of that particular area, bubble etc. Even though he agreed with all the warnings I gave him, he went ahead and did it anyway. He had the Zombie mantra about how he couldn’t go wrong (and even though the sales contract said he couldn’t rent the unit he told me that the agent said no one would know as long as he didn’t put a sign in the window, wink, wink.). Paid something like 312K for a 2 BR condo in Fountain Valley and took possesion last fall. Still empty, couldn’t flip it. Last I heard he said he was going to rent it out…good luck. If he can find a renter he is probably $1000 neg cash flow a month. This whole venture was financed with the cash-out refi he took on his San Diego condo which he lives in….classic!
I do feel sorry for some of these people.
Resist that urge! It’s you that will end up paying when she files bankruptcy!
In Pheonix, you really need a garage!
Or at least a covered carport (speaking from experience)..
Canary in the coal-mine (no math)
Coal miners in the 19th-century brought canaries down into shafts. When the delicate birds died from inhaling poisonous gases the miners knew it was time to evacuate.
I have always viewed condo conversions like canaries in a coal mine. They signify that the housing bubble has reached a peak.
If an apartment is being converted into condominiums, it is rational to assume that the buildings are worth more as condos than as apartments and the gains from selling is more than the expected rents from holding the apartments. This is clearly visible in the San Francisco Bay Area in 2006. But why did the builders first construct apartments in the first place?
To understand that we have to go back just five years to the peak of the dot.com boom when rents were shooting up and everyone wanted to build new apartment buildings. We can also assume in that year, rental apartments were worth more than condos. It appears there are time periods when apartments are worth more.
Now that condos are worth more can we assume that this will continue in the future? If condos are always worth more than rental apartments we can expect the stock of apartments to decrease, as there are more condo conversions until there are almost no apartments left. But, this has never happened for any big American city, and most have a mix of condos and apartments. A better assumption is that in the not so distant future, apartments will be worth more than condos.
This can happen in two ways 1. Condo prices fall or 2. Apartment rents rise. Builders converting apartments to condos are betting that condo prices will fall and so they had better sell now, as they will not get as good a price in the future. Condo buyers expect apartment rents to rise and are buying now to avoid paying higher apartment rents in the future. Which one is more likely to happen? I promised “no math” so we have to use more subtle reasoning to choose which side is likely to be correct.
The buyers of condo conversions are very different than the sellers. They are likely to be amateurs (not in the real estate business), inexperienced, and first time buyers. The sellers however are likely to be professionals with years of experience in the real estate industry, who have bought and sold hundreds of units and have access to the best experts in the field.
I would bet on the builders converting apartments to condos being correct and selling now to take advantage of irrational homebuyers. Condo prices are likely to fall in the future.
Great points. The past few years almost no one has built apartments because the rents didn’t ‘pencil out.’ It is another example of how when the cost of renting is lower than the cost of buying, there is a price problem.
Another reason in California, is that the builders don’t want to be sued. So they build apartments, and after 10 years convert them to condos. Then they can’t be sued over build defects.
I’m sure that an ambitous lawyer could find some grounds for a suit on a conversion. How many conversions do you think were done by unskilled labor over the last several years when high-quality labor was in short supply? Just substitute “conversion defects” for “construction defects”.
You are using math. You are not using numbers, but you are using math.
The ones that don’t use math don’t even get this close.
Does this mean that in places where people really do want to live in multi-family units, such as NYC, Coops with all their rules are superior to condos? Always a debate here.
In NYC, it’s less a matter of “wanting to” than having little choice unless you are either very wealthy or willing to live in one of the less-dense fringe neighborhoods (or now both—houses in places like Bay Ridge and Ditmas Park have gotten close to townhouse prices).
Coops have a lot of rules but traditionally have been more financially stable because of them. Most new contruction is in condos, though.
You have to be approved by the board in NYC co-ops, which keeps the riff-raff out.
Hard for me to grasp how other NYCers fail to understand just how bad the co-op ownership structure is. Here are some points to ponder while you are enjoying the absence of riff-raff:
1. Before selling the building to the tenants, the sponsor took out a second mortgage removing 100% of the equity. This is like buying a $300,000 SFH by getting your mortgage for $300,000 and then discovering that you ALSO have to pay the underlying mortgage for another $300,000. The sponsor knew he wouldn’t be paying off the second mortgage so he didn’t bother to get very good terms. Wrap-around mortgages that pay no principal and have ten-year balloon dates are not uncommon.
2. Co-ops are virtually unknown outside NYC.
3. Co-op boards fund most large projects by borrowing meaning that you are paying interest. And yet the fundamental NYC dictum is, “Only schmucks pay interest.”
4. In a co-op, unlike a condo, the board can refuse to permit your sale for any reason except illegal discrimination. They don’t have to give any reason and usually don’t. Who in his right mind would buy a “property” without the right to sell it? I have seen sales refused to financially qualified buyers because the Board didn’t like the price! Perfectly legal.
5. Ditto for subletting. No rights there either, mr. shareholder.
It should have served as a major warning when a 20 year old complex charging $850/mo for 2-br apartments was converted to “luxury condominiums” where the same apartment sold for $200k+, or approx $1500/mo after all fees and insurance.
Why anyone would pay double to own is beyond me, especially with the proven history of reapartments in this area.
Condo’s become starter homes and the buyer thinks it is a good deal. He forgets he needs to be in a house as a home he can live in for 5-10 years. Greed and overpricing of entry level homes. Nothing is left after condo conversions ALTHOUGH everytime I think they have run out of ideas, the markets shifts in a new direction.
Katrina refugee housing in the Wal-Mart parking lot?
Here in Phoenix there are condo conversions everywhere you look. Last night on my way to play golf at Rolling Hills in Tempe, I passed three or four such completes all right next to each other on both sides of the road. There must be 500+ plus units for sale.
Yesterday was miserably hot and today is going to be even worse. No one was on the golf course except the group I play with. It felt like a blast furnace with humidity.
az, i can’t believe you’re even out there. certainly not between 10:00 and 4:00
lots of sunblock and bottled water my friend
I play Rolling Hills every Thursday at 5:00PM in the summer. We only play nine so it’s not too bad. Last night was the first time I did not walk the course. When the guys see me renting a cart, they know it’s really hot. I use a 45 sunscreen and do drink alot of fluids. I have the worst looking golf tan you have ever seen.
115 degrees there today. No wonder “everyone wants to live in Phoenix”!
115 degrees? More like “everyone wants to DIE in Phoenix”!
I love sunshine. And earning $83 per hour and $90 per hour overtime working 50 hour weeks while the maximum AZ tax rates are half of what California’s are somehow makes the 115 degrees like a spring day in the Valley of the sun. $300 per month air conditioning and paying $500 per month rent on a shared apartment. I do the math: $8000 per month mortgage in Hermosa Beach near the other apartment I rent (also cheap, due to roommate). Give me a minute to think this over……Ah yes, I prefer my living in Phoenix!
I have a question, does anyone have a way to look up home buyers who sold there more expensive home and droped down to a less expensive home? For instance a family who own’s a 1mil to 2million dollar home sold it because they cant really afford it, then bought a let say 850k home something they can afford, because they know prices are dropping made a profit ya da ya da ya da. Anyone?
Why do you want to know ?
Well they talk about buyers moving up all the time, If there moving down there still keeping the price up, even if there buying a reduce home right?
Plus it another sign we should look at?
good thought, but my first pass at it makes me think there aren’t many people moving down. If they can’t afford where they are living, chances are they don’t have any equity in the house, meaning they will owe money when they sell, plus the expense of selling….these people on the edge of bankruptcy aren’t going to be buying ANY house, esp. if the previous one didn’t work out financially. They will become renters.
Anecdotally, I have had people apply for rentals, who had recently sold a house and said that they were downsizing.
But I have no idea how you would find a list of such without access to the IRS database and a good data-mining program.
And just think!!!With ONLY another 50,000 condos under construction and another 50,000 planned coming to market in the Miami area, prices should double again….. right???
The new vacation slogan for Miami will be , ” come to Miami, get a FREE condo.”
Didn’t Miami sell about 10,000 condos the past decade? 50,000/10,000 = 5 decades. There is a 50 year supply under construction? There are no words in Webster’s dictionary to describe this. I would assume the other 50,000 will be scrapped, correct?
No, NO, NO !!!
The baby-boomers, with their high savings and BIG PENSIONS, all want to live in Miami…..along with lots of RICH foreigners.
They are all coming to Miami and sales will skyrocket in just a year or two. Never too much inventory.
(Past results are no guarantee of future performance…please consult with a professional before making any decisions based on this information).
Miami could end up looking like Bangkok after their last major recession — even today there are large skeleton buildings scattered throughout the city, unfinished and in endless litigation.
when you talk about miami, you got to talk about south florida. miami is building like crazy. the cement is already poured. all of the suburban miami-dade, broward and palm beach is condo crazy+ condo converts. i kept telling people that there are too many condos and not enough buyers. investors and retirees are not moving here to work in the mall or mcdonalds. 90% of the people in south florida cant afford a home. this was in the paper this week. now you see high school kids working everywhere. there is soo much blood on the streets right now, wait until gas becomes 100 dollars a barrel. other major hurricane and no insurance company will insure a house in south florida. these condo apartments will look like honeycomb cereal, full of holes. 2007 is going be “ugly”
In case you were wondering why (why, why) people would ever buy in such a poison market:
I scanned in the cover article of the Home section of San Diego U-T (couldn’t find it online).
The author is Steve Ring.
http://century211st.com/steve_ring
I now must toss the paper because it has spit right about where the guy’s picture is adjacent the article. Excuse me.
Here is the piece:
By Steve Ring
Owner/Broker, Century 21 1st Choice
There are a multitude of buyers, about 5,000 each
month, who don’t seem to care about
San Diego’s high prices when making the decision
to buy a home now. They come from
all across the economic spectrum, from
entry-level “first-timers” to the rich
and famous.
But wait a minute…why would anyone
think of buying a home in San Diego
now? Haven’t they heard that prices
may have peaked here, a housing bubble
might burst, or that it might be better
to wait to see if prices decline? Maybe
today’s home buyers know something
that others don’t.
Maybe today’s buyers are
having a “light-bulb moment”
when they realize there are several
other reasons why buying a
home now is the right decision,
regardless of the uncertain market
direction.
Today’s buyers may know
that, unlike cars or stocks which
can lose value that never comes back,
real estate tends to always
go up over time. Even if prices
do go down, history has shown
it’s usually temporary and will
recover the upward trend. Despite
market ups and downs,
buyers know they can “build
wealth” anyway by paying down
their home loan and from tax
savings. This wealth is built in
ways you’ll never get from renting.
How?
The first way is simply by paying
your monthly house payment.
Even if home prices decline, the
loan balance will grow Progressively
smaller with each payment
toward principal. Eventually your
home is completely paid off,
years before your friends who
waited to buy. Then you’ll have
zero payment for the rest of your
life, sitting on a giant nest egg
worth thousands of dollars of
untapped money. You’ll never
get that from renting.
Better yet, before the loan is
paid off, the growing wealth can
be put to work for you. You can
borrow from it to buy a car,
improvements to your home,
your children’s education or even
more real estate purchases.
You’II never get that from
renting, either.
Further, many buyers have figured
out that while their rent may
seem lower than a monthly home
payment, the home’s tax deductions
will give them the “extra
cash” they need to fill that gap.
Yep, you guessed it… you’ll
never get that from renting.
Today’s buyers also recognize
that even if prices go down,
interest rates may go up. A higher
interest rate means you could
pay a higher monthly home payment
(about $300 to $400 more
per month), even with a lower
home price, possibly wiping out
any savings you thought you’d
get by waiting. If prices dropped
a whopping 10 percent and
interest rates went up a mere 1.5
percent, your monthly payment
could actually be higher for a
lower priced home!
Finally, many home buyers
know that they could rent out the
home they buy, using someone
else’s money (the renter) to create
all of the above benefits for
themselves.
Hey Steve: ‹^›_‹(ô¿ô)›_‹^›
Steve, soon you will cleaning my skiis and boots, after I pull it out of your arse.
Can you guys believe this guy? What a POS!
steve ring is about as timely as an amway salesperson. his notions are so 2003.
people who bot into his script in 2003/05 on arms and negams are now sweating bullets, and cursing the day they ever shook hands with this man
“steve ring is about as timely as an amway salesperson.” - I love it!
This article is so ridiculous and full of holes that it’s not even worth discussing. Let’s just laugh.
Desperate times seek desperate measures. While I want to be a homeowner, I am not going to kill myself to do it. I am saving for a large down payment so I will have some skin in the game from day one. When prices drop, my mortgage will be less. I am not that concerned about the rates. I’d rather pay a higher rate on a lower balance than a lower rate on a higher balance. I can always refi lower, but I can’t lower what I paid for the house. What this guy says is true, when we are not in a GIANT HOUSING BUBBLE!!!! Conventional wisdom needs to be adjusted in frenzied times. Also, the stock market has an uptrend just like real estate. It is just more volatile. As the cycles move forward for both stocks and RE, we make higher highs and higher lows, but that doesn’t mean each of those lows aren’t painful.
don’t forget, it was common practice in the old days for sellers to take back paper. rates can be negotiable like anything else.
An interesting possibility, though not likely to be in noticeable numbers, could be zero-% financing by the seller, as a face-saving and sale-saving measure, for part of the selling price - maybe 10-20% of it.
“real estate tends to always go up over time”
Why not just say always, Steve? Not quite sure of yourself, buddy?
Send Steve an email - he’d love to hear from yall.
I’m into year 3 of a 15 year mortgage. My interest payment is now less than 50% of my total payment, that means that the “tax” benefits of homeownership are rapidly going away - after only 3 years. Rents would have had to go up a lot to counter act the loss of the tax benefits. Why does no one seem to want to mention that the “tax benefits” of homeownership are very transitory? Notice that your payment does not go down to compensate either, you’re making the same monthly payment, but get progressively less tax break.
one word….interest only loan (oops…that’s three words)
Indeed. I don’t know about where you are, but I think I make pretty good money, and my marginal tax rate is only about 31% this year. (Two years ago it was 22%) So that big tax break for my $250k house on a cheap mortgage, while not insignificant, is hardly going to make me drool over gettig into a bad deal on a house! For some of my relatives, their marginal rates are 15-18%, hardly worth even worrying about! Heck, they might not even get up to the standard deduction on their tax return. But we don’t live in California, either. (Thank God)
Now if I had a big tax break on a higher-rate $500k mortgage, well, I’d still be 69 cents out of pocket on every dollar of that money I paid in interest, and given the ratio of rent:own costs, I’d be a fool to be buying my place right now at today’s prices and mortgage rates instead of renting it. But then, unlike Steve Ring (or more precisely, his clients), I do the math and add it all up before making my move.
“Maybe today’s home buyers know something that others don’t.”
Like not to rely on spreadsheets? Believe your RE broker instead! Yeah, that’s it.
Like the saying goes: Lotteries are a tax on people who are bad in math. Well, buying real estate these days in most parts of the country is similar.
Suze Orman — as much as everyone loves to bag on her (and she is aimed towards the “masses”) — always points out that the mortgage interest rate rebate is “25% of money you’re SPENDING!”
And that’s if you exceed the standard deduction, Steve.
I think Steve and Suzanne should get married. Or share a cell.
Or both.
Feepness mentioned this below — the real break you are getting is only the amount of tax you save beyond what you would have paid if you had taken the standard deduction. That is a super-easy compare with any tax software. A lot of buyers and owners fail to make that calculation. A huge percentage of taxpayers now take the standard deduction rather than itemizing and that number is definitely not just renters.
This gentleman, on the other hand, is not using math.
I think downtown Los Angeles is one of the few places where building new condos is currently profitable and feasible. If I could afford to buy one, I’d love to own one since I spend a lot of time downtown. We’ve seen more and more condos being built based on the European idea of housing over retail spaces. Anyway, they are nice — just way too freakin’ expensive.
Only “profitable” because it is subsidized.
i dunno kiddo. dtLA has nothing going for it except convenience.
i think the missing link is water.
sd, sf, even long beach seem so much more livable.
“I think downtown Los Angeles is one of the few places where building new condos is currently profitable and feasible.”
Do you get subsidized trips to the bronchial surgeons with your HOA? Seriously, downtown LA is the absolute worst place to live in the entire basin. There are more days than not when you can taste the air. I was never so happy as the day when I left a job in downtown.
The cost of getting a contractor & subcontractors to build anything in the last decade has pretty much appreciated along the path that housing has. Everyone in housing was getting a proportionate piece of the bigger pie. Current building cost alone equal costs for what land plus improvements were for almost any RE type five years ago in California at least. Obviously rents have not appreciated much in the last five years. I don’t think there will be much motivation to build apartments (or anything else) until prices contactors charge get back in line with the return on investment owners hope for. As you all likely perceive, the reconversion trend is simply damage control. I would be shocked if a new construction repartment broke even. Conversions might do better since they are less labor instensive and the developer may have started with some equity.It seems not only that there will be high un-employment in construction but also that there will be a correction in contractors ability to charge that parallels the housing bust. For the bargain hunters on the blog…..There will likely be a glut of trucks, tools and equipment to be had inexpensively.
I had a nice conversation about a condo conversion on a reverse mortgage appointment yesterday. I was visiting my clients yesterday just north of Tampa. I passed an obvious condo conversion project yesterday and it was notably vacant. I spoke to my clients about it. They told me it used to be apartments for section 8 recipients. The apartment complex was sold and the new owner decided to turn it into a condo conversion. That mean the section 8 people were kicked out to make room for the new condo owners. Of course the management company had to “upgrade” the apartments in the interim. Needless to say, things haven’t quite gone as planned. Even the speculators have avoided this place. Markets can be a b@tch sometimes.
50 people paid $1,800 for advice on how to wreck their finances. They could have received better advice coming over here. And they wouldn’t have had to lighten their wallets.
One thing about investment seminars. If the person giving the seminar were really good, he’d be doing what the seminar tought. Not charging to teach others. If he really wanted to “just share the information so that everyone could become a millionaire”, he could just put all of the information on a free website.
I herd during the last bubble of the 90’s, condos were the last to rise, and the first to fall. Since I, Joe six pac knew this, why didn’t the smart money people know about this?
Because people thought Condos were a gold mine just like houses. It was the last chapter of the Ponzi scheme. Everyone I know has lost money w Condos/Townhomes as well. Esp when they just glorified apartments. Better to rent a Condo than own one. All of the benfeits, none of the risk.