Grove Garden Foreclosure Story
July 17th, 2009 | categories: Coconut Grove Condos
Last week I posted a great foreclosure opportunity in Grove Garden. I had a large response from my readers who were very interested in the property and I took several of them to see it. You can read the post here.
One of my clients decided to put in an all cash offer for the unit. After submitting our offer, the agent called to let me know that we were only 1 of several cash offers on the table. The bank requested that the highest 3 offers make their best and final offer. My buyer, who really wanted the unit made an offer of $327,000 which was eventually accepted by the bank.
Now that the bank was working with my client’s offer, it was time for us to do our due diligence on the building. After meeting with the Property Manager, I found out several disturbing things. First, that there are 50% investors in the building and 50% renters. Second, there are 8 units currently in foreclosure and possibly several more on the horizon. And finally, there are surely going to be issues with the Association’s reserves and its ability to pay its bills.
Upon finding all of this information out, I concurred with my client that it was not in his best interest to purchase the property and we withdrew our offer. This unit is certainly still a great deal, but the buyer must be willing to take on a significant amount of risk. There will be more foreclosures coming on the market in this building, and any potential buyer will have to be a cash buyer as the association does not meet the minimum standards to get a mortgage.
The status of this foreclosure now? The selling agent informed me that there were about 5 backup offers waiting in the wings and it will surely go under contract today.