Sunday, October 21, 2012

NCC's 5 'Owned' units:

Q)   NCC now officially 'Owns' 5 units here - but do we actually 'Own' them?

A)   No, they are advertised on Craigslist to rent them out.

$795 / 2br - 2 Br, 2 B Condo For Temporary Home (Panama City Beach)

Date: 2012-06-28, 11:57AM ED [Reply to:

Leasing today, 2 bedroom, 2 bath condo just down from the pool.

Note: The HOA is holding title to this unit, which is being foreclosed on by the bank, so the lease will be for six months and one day. The bank is required to honor the lease or buy the renter out of the lease if the foreclosure moves forward before the lease ends.

A $50 application fee per adult is required, and no pets will be accepted. There is a $500 deposit due at move in.

This is perfect temporary home in Nautilus Cove, 13700 Panama City Beach Parkway. (850) 235-1009.

First approved applicant(s) can move right in!
We ended up with 5 units which are available on a temporary basis to rent out, as we can't sell them as all five have first mortgages on them from institutions that lent the money to the original buyers and those filings take precedence over our deeds. So those banks or mortgage companies will eventually come after us so they can take title and auction them off. We have them on a temporary basis and can and are renting them out.

I believe most are going in the area of $795-895 a month and those funds will be used to pay down the delinquencies owed. There are some problems with this and here are a few:
1) So we collect $795 a month in rent, however, that really is only $570 because we don't get the $225 in 'dues' as we own the units,
2) We have to pay taxes on them and in some manner we must be paying extra for insurance on them,
3) My back of the envelope calculations indicate that we need to retain and rent them out for between 18 and 20 months to 'break even',
4) When the first mortgage holders eventually wake up and come after us we will incur additional legal expenses of an unknown amount.
5) Our lawyer (Hess/Applebaum) have made over $20k in profit so far, they are the only ones who will actually make money on this course of action.
6) Obviously we are responsible for keeping the units up so they can be rented out, possibly painting, carpet cleaning, anything broken that needs to be replaced etc.

So we now have 5 units, so ask in 2 years and find out if we lost money or broke even.   Doing some rump calculations it looks like we will have to hold and rent them out for 18-20 months each to break even and that isn't taking into consideration any attorney fees we will have to pay when the first mortgage holder comes after us to get 'their' units back.

I can't see us actually coming out with any profit and I hope we don't get involved in filing any more foreclosure actions, leave such things to the banks and mortgage companies and we will collect from them when they sell the units, we had liens on all of them that had to be paid before any clear title could pass to new buyers.

Misc: The units we now own and their original owners are-
506 - Grass
701 - Jarrett
401 - Thomas
702 - Ussery
705 - Reyes