In the Great Real Estate Debacle of 2007-2008, many developers got caught (particularly in Florida, Arizona, etc.) between the rush to finish construction and a fading market. Often, only a minority of units were sold when default occurred and those lending institutions which had provided the construction money stepped in.
Typically, the remaining unsold units are rented out and the construction lender then seeks to sell these units as a singular block.
Investors can find real value in such acquisitions as the properties are relatively new with great amenities, etc.
Finding the debt financing, however, can be a challenge.
If the units acquired constitute a majority of the original project, it’s helpful and attractive rates and terms may be available.
If the units being acquired represent a minority, Banks and other first-choice lenders will shy away from potential HOA conflicts, etc.
We’ve had success finding capital for these transactions in both cases… If you have a potential need along this line, let us know.