June, when you looked at those foreclosures, did you happen to notice when they were originally purchased.  Here in Santa Clara County, it seems like many NODs are being issued on properties purchased in 2007.  In other words, the buyers never made a payment and skipped with the rent money.  I would think luxury condos would be a good target for that sort of fraud because they would be easy to rent by the month, week, or day.

June:  Wow, only $800,000.  Now just where did I put my checkbook.  I had it here somewhere.  Also, I guess I never thought about that... purchasing one, not making payments, and renting it out.  Not a good thing to get mixed up in.

Hi Frank - The following is the Saga of the Turnberry Foreclosures as I know it after doing a bunch of investigating:

 The 11 Las Vegas Turnberry Place foreclosures were purchased (actually the buyer bought 13 of them - he sold 2 successfully at $ 1.4 million during the hey day), preconstruction in about 2004 - Construction was completed at the end of 2006. He had some sort of foreign hedge fund backing him for the downpayments during the preconstruction stage which required 30% down, and for some of the debt service.  In order to service the debt he did some high interest rate loans that were layered with 2 or 3 mortgages.  He was not flexible on his pricing as the market began to turn & just stopped paying when the foreign hedge fund went under. 

Bottom line - the guys in first did very well.  They had great units - great paper & were happy to foreclose. They in turn, sold a few at auction for a small but quick profit. The HOA dues on these units were over 1000 per month - with 11 of them plus taxes & debt - he didn't keep abreast of the market very well.  Initial purchase prices were $ 1.1 - $1.3 million in 2004.  That is still the market value today because the unit he chose are amongst the best in the city & unique in design, and our Las Vegas real estate pricing has rolled back to that 2004 level, in my estimate.  Some folks are asking as much as $ 1.4-$1.8 for similar units all done up...not that they will get that especially now that these foreclosures detroyed the comps!

That is the story behind the units - as for the 3 newest ones - probably just a sign of the times....Turnberry Place is luxury high rise condo that is quite posh with strong HOA's that permit 1 rental per year wiith association approval of the lease. So the skipping with the rent money scenario does not apply here. And the unit are sold with finished kitchens & baths & then the buyer has to build out the interiors.  That is one of the reasons they were hard to flip.  The original buyer was out of touch with the end user profile of the high rise buyer - they do not want to come into town & then deal with contractors while servicing debt & putting up with all the rules & regulations of what contractors are permitted to work in the towers & under what conditions.  In other words - he didn't do his due diligence very well. 

But many folks did not, during what I call "the Great Condo Craze of 2004". 

All the Best in 2008!

June, thanks for the detailed reply.  The rent limitation makes sense, though people who set out to commit fraud aren't likely to follow the rules.  $1000 per month HOA is staggering!  You make a great point that a lot of pain could have been avoided by staying abreast of the market and pricing accordingly.  Banks need to stop worrying about losses due to short sales and start worrying about losses due to not selling at all.  Around here I've heard that very few short sales actually close and that most auctions go back to the bank.  Sometimes you're better off taking your lumps now rather than risking chasing the market down further. 

Well said Frank.  of the 26,000+ properties in our MLS, 49% are vacant as of 11/1/07.  Staggering numbers. The banks need to be more realistic in their pricing.