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Tuesday, June 12, 2007

Tax relief may work against real estate vultures

Tax relief may work against real estate vultures

mhaggman@MiamiHerald.com

For two years Magdiel Guillemi watched the condominium towers go up across South Florida and waited for his chance to buy in. Now the 25-year-old aluminum company executive thinks his time has arrived.

With the housing market stuck in slow motion, more and more condos nearing completion, and many jittery preconstruction buyers wanting out as closing day approaches, Guillemi's betting he'll be able to buy at steep discounts. Then he hopes to sell for a profit, just as flippers did when the market was on the way up a few years ago.

Call it the contrarian view of real estate investing. While the market appears stone-cold to many individual buyers and sellers, others -- the so-called vulture investors -- see opportunity.

Guillemi says he's already finding bargains but he wants to act fast: The Florida Legislature starts a special session this week to consider lowering property taxes -- a move he thinks could spur renewed buying activity and endanger the low-cost deals he's scouting.

''If they cut taxes that will motivate individual buyers,'' said Guillemi, who plans to start buying in the next few weeks. ``And I want to get in before they do. I don't want to be left with the crumbs.''

Large investor groups and hedge funds are also scouring the region for bulk deals at bargain prices.

At the height of the 2001-2005 housing boom, it seemed everyone was getting into real estate, hoping for fat profits. But a separate class of speculators sat out during those frenetic days, betting the market would be bid to unsustainable heights yet still hold long-term value.

Their gambit: Buy on the dip and ride the market up.

The question for these investors is when to buy. Many observers say the market hasn't yet hit bottom, others say the time is right.

But for the vulture investors, who have pooled cash and waited for their big chance to score from a market correction, this week's special session brings a twist. It's spurring some like Guillemi to accelerate their plans and others are hoping legislators don't accomplish much.

Peter Zalewski, a former journalist who a year ago started condovultures.com -- a company that helps buyers find bargains in a downturn, said he fears decisive action in Tallahassee will provide a jolt that could potentially undermine his plans.

''There is an urgency that is being created by the legislative issue,'' Zalewski said. ``If they resolve the property tax issue, the market will get some medical attention. We don't want that, we want to bleed out the market some more.''

Of course, few will feel badly if vulture investors' prospects evaporate. Home builders, brokers and many homeowners hope Zalewski's thinking that a cut in property taxes will give the region's anemic housing market a shot in the arm is right. The Latin Builders Association and Builders Association of South Florida are both pressuring leaders in Tallahassee for sharp cuts.

But not everyone is convinced a property tax cut in Tallahassee will cure the housing markets ills. Among the other issues the market must work through are:

• A giant oversupply of homes: more than 76,000 were listed for sale in April in Broward and Miami-Dade counties compared to some 50,000 a year ago. Over the next 18 months about 20,000 new condo units are expected to come onto the market in Miami-Dade County alone, possibly spiking unsold inventory as those units are put back on the market for resale.

• Insurance rates have not come down. Condo associations and individual homeowners are still grappling with hefty premiums.

BIG BUYERS

Analyst Jack McCabe, who is advising large vulture investors on bulk deals, said big investment groups aren't as worried about tax rates as individuals -- saying such costs can be spread out across big buyers' portfolios.

Last week McCabe announced the completion of the first market-corrected deal he's worked on since the slowdown began. While short on specifics, McCabe said a multibillion-dollar private investment fund bought a substantial block of newly built condominiums from a publicly-held home builder in Florida. His investor client, he said, was chosen because of its ``ability to close quickly in an all-cash transaction, noncontingent on financing.''

Currently, he said the market is too sick to recover from a tax reduction alone. A big property tax cut may reignite buying now, he said, but would effectively create a false bottom.

''Meaningful reduction will slow down the correction cycle but the correction is still inevitable,'' said the Deerfield Beach analyst, who has warned for some time about too much construction going up too fast. ''The market is so sick it will take a while to cure this,'' he said. ``This is not a head cold, it is more like pneumonia.''

But such doomsayers also believe the market is poised for brighter days ahead. McCabe says that barring calamitous hurricanes, the market will have righted itself by 2010 -- just as the first baby boomers turn 65.

''No one is more bullish on Florida long-term than me,'' McCabe said.

It's such thinking that prompted corporate raider Carl Icahn to announce last week that he would continue efforts to buy Bonita Springs-based WCI Communities. And Zalewski spent last week showing property in South Florida and Central Florida to two investor groups, one from Michigan and another from Colorado.

DEEP DISCOUNT

Guillemi, meanwhile, is focusing on a unit at the Brickell on the River condo in Miami. He said the owner bought it for $341,000 and is trying to sell for $280,000.

''The seller has two other properties under foreclosure and is having trouble making mortgage payments,'' said Guillemi, operations director of FDS Aluminum in Pompano Beach. ``I'm trying to pick it up for $260,000.''

So with an eye on the special session in Tallahassee, he's ready to move now. ''With tax reform you will have two things pushing people into the market: lower prices and lower taxes,'' Guillemi said. ``I'm not going to wait. Of course, you have to be smart about it. There is a lot out there and you can't get married to the first girl you see.''

 
Posted at 2:41:31 PM
 
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Updated: Thursday, July 18, 2019


A New HomeWithout Moving

What if there was some way to get that lsquo;new homersquo; buzz without the hassle? Well, of course there is, and thatrsquo;s why people spend time and money updating their homes.

Here are five ways to get yourself a new homehellip; without moving

  • 1. Extend

  • A lot of people move home because their current house is becoming a bit of a squeeze. Maybe children have come along or you now work from home. If you have the garden space, it can make financial sense to build an extension rather than find a new property. The key thing is to do the sums up front, set a budget and stick to it.

    The joy of an extension is that you have a new rooms to plan and >

  • 2. Update the kitchen

  • The kitchen has become the heart of the home, with many properties now featuring a large living space based around the kitchen. Whether or not your house will allow for a big space for cooking, dining and just hanging out, replacing your kitchen is a great option. It will renovate your house, add value and give you that lsquo;new homersquo; pleasure.

    Work with a kitchen planner to create a perfect layout, but donrsquo;t be afraid to shop around to get the update done at a price you like. Itrsquo;s often cheaper to buy appliances independently rather than through the kitchen specialist.

  • 3. Blitz the bathroom

  • Lots of us love staying in hotels and luxury apartments because of their opulent bathrooms. If this is you, think about bringing a boutique bathroom to your home. A new bathroom suite costs less than you think and will revolutionise how you feel about your bathroom. You could focus on updating your shower-bath or creating a luxurious walk-in shower, and then adding new tiles and flooring to suit your personal >

  • 4. Change the layout

  • If extending isnrsquo;t an option for you, you might look to knock down an internal wall to create a more spacious room ndash; a larger living room or an extended kitchen space. If your floor plan doesnrsquo;t give you that option, think laterally about changes you could make. Could you move to a different bedroom? Swap a dining space with a living room? Add an en-suite to your room? All of these options will give your home a new lease of life.

  • 5. Open up your loft

  • Our attics and lofts are nearly always wasted ndash; theyrsquo;re just dark, dusty storage areas. Making better use of this space will give you access to a whole new room. A master bedroom, an office, a den for the childrenhellip; You can either formally convert the space with dormer windows, or renovate it yourself. There are lots of great ideas here.

    So, with a little imagination you can achieve that happy new home without all that house-hunting, packing and spending. Enjoy your new property


    > Full Story

    Six Creative Ways to Drum up Interest in Your Home

    Organize a block party

    If you live in a neighborhood where everyone knows each other, fantastic Get everyone together on the street and offer to serve drinks or dessert in your house so you can make sure everyone comes on in. If yoursquo;re not super friendly with them, a block party is a great way to get to know the neighbors yoursquo;ll soon be leavingmdash;and maybe uncover someone whorsquo;s interesting in finding a new place in the same neighborhood.

    Have an estate sale

    A garage sale may attract mainly ultra-bargain shoppers, but an estate salehellip;thatrsquo;s another story. Not only do you have an opportunity to sell some of the items you donrsquo;t intend to take with you to your next home, but you may find a potential buyer, too. If you donrsquo;t have enough items to sell, enlist a few neighbors. They might be more than willing to haul over their old sideboard and china set for a chance to get it sold with minimal effort.

    Show off the goods

    Have a newly renovated kitchen you want to show off? Ninenbsp;out of 10 property purchases are decided by women, so invite the neighborhood moms over for wine and hors drsquo;oeuvres. You never know who will fall in love with your kitchen island and decide they need to move.

    Let your neighbors know on Nextdoor

    Depending on how your neighborhood Nextdoor is run, your post may be flagged and taken down. But, before that happens, you just might be able to zero in on a prospect or twomdash;before you even list your home for sale

    Rent a gaming truck

    For a couple hundred bucks, you can rent a gaming truck to park in your neighborhood. Invite all the moms to hang out inside with you, where they can ooh and ahh over your home while the kids are occupied and having fun in the truck.

    Ask your neighbors to put the word out

    Turning your neighbors into an extension of your real estate agentrsquo;s marketing team is easy. After all, they care about who their future neighbor will be, right?


    > Full Story

    10 Tips for Creating a Calmer, More Peaceful Home

    Add some greenery

    Studies have shown that plants can make your home feel calmer and ease anxiety. Plants like jasmine and English ivy can improve sleep, lavender and rosemary can lower stress, and several other plants have been shown to improve air quality so you breathe easier.

    Hide the electronics

    ldquo;Nobody wants to stare at a tangle of cords,rdquo; said Houzz. ldquo;Thankfully, we have more options than ever for keeping our tech devices hidden away. When possible, choose smaller, wi>

    Get a dog

    Or a cat, a bird, or a turtle, for that matter. Yes, having a pet can mean more noise and more mess. But, there are all kinds of studies that show that having a pet lowers stress. ldquo;Researchers found that pet-owning patients with high blood pressure could keep their blood pressure lower during times of mental stress than patients without pets,rdquo; said AnimalSmart.org. ldquo;Another study showsnbsp;that pet owners may also have increased odds of surviving for at least a year after having a heart attack.rdquo;

    Clear the clutter

    Going all Marie Kondo on your home can have surprising effects on your mental state. ldquo;Clutternbsp;can playnbsp;a significant role in how we feel about our homes, our workplaces, and ourselves,rdquo; said psychologist Sherrie Bourg Carter innbsp;Psychology Today. ldquo;Messy homes andnbsp;work spacesnbsp;leave us feelingnbsp;anxious,nbsp;helpless, and overwhelmed.rdquo;

    Tone down the harsh colors

    Therersquo;s something to be said for going bold, but soft colors can bring on a calming feeling. If you want a deeper color, consider shades of blues and greensmdash;two colors that are known to be more serene than, say bright yellow, orange, or red.

    Clean up your entryway

    Itrsquo;s the first place guests see, and while you probably donrsquo;t pass by or through your front entry all that often if you park in the garage, it may not feel as welcoming as yoursquo;d like when you do.

    Soften the lighting

    Harsh overhead lighting can make you feel like yoursquo;re being interrogated, and can also be hard on your eyes. If you need to keep it because the space will be too dark otherwise, a dimmer can at least give you some control over just how bright it is, and allow you to create a mood with lower lighting as needed.

    Limit the patterns

    ldquo;Opt for solids and subtle patterns,rdquo; said Houzz.nbsp;ldquo;Busy patterns have their place, but if yoursquo;re aiming for calm, then solid fabrics are your friends. Donrsquo;t be afraid to include subtle patterns, though: herringbone, tone-on-tone stripes, and tiny dots can add textural interest without competing for attention.rdquo;

    Buy some fresh flowers

    According to a study by Rutgers, ldquo;The presence of flowers trigger happy emotions, heightens feelings of life satisfaction and affects social behavior in a positive way far beyond what was originally believed.rdquo;

    Make your master bedroom a zen zone

    Getting good rest is key, and there are several ways you can create a soothing space. Keeping the colors serene is key, and so is a good mattress. Loading the bed up with soft textures can also help. ldquo;The sensation of touch is often overlooked, but a powerful way to unwind,rdquo; said Mass.gov.


    > Full Story



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