Sometime the real life stories beat any and every imagination.
The owner of 3 units in the Fountain Beach Resort, a condo-hotel in Daytona Beach, was not paying Assocaition fees for quite some time. I thought he would sell his units, but he is a wheeler-dealer and always bought and sold himself, so I was sure he would do the same thing this time. He would come to our office (and we are in this building), ask us about the market, what the units were going for, and then shake hands and walk away.
I can't say that the guy does not have business sense, on the contrary. It was a shock to me when it happened, that the association got the units. It was not that often when there was only one small mortgage (there are rumours that he owed money to other people for these units, but it was not recorded).
Two days prior to the foreclosure sale, another owner in the building offered him a bailout, but the guy said that he was OK and he did not need it.
They were in the same car driving to the court house, and they were a bit late, and the guy kept saying that everything was OK, and that they have plenty of time. When they came to the court house, it was already gone, over, finished. It took 10 minutes to do it, that was it. No bidding war, nothing...
How deep in denial has one to be to let 3 units go with about $30K in unpaid fees and small mortgage, when he could realistically get with the most dicounted price about $150K-$200K? Even if he could get $130K for all 3, which is a crazy-crazy price, but still he would walk away with $100K in his pocket and he really needs it.
And what the Association would do with these units? They might be very tempted to keep and operate them, and then sell at high point of the market, and thus make up for some of the money they lost due to lack of business sense, but with mediocre rentals, they are not going to be in the black if they rent it in rotation like every other unit. Then they will not make any money, and, actually, would have to subsidize from the Association fee, paid by every other owner. If they rent them first, then they would actually force everyone to cntribute (in the form of lost income). If they sell, they will have to deeply discount... They are between the rock and the hard place.
What a time...
To see all available units in the Fountain Beach Resort, click HERE