7 Contracts Remain
Two more contracts signed. Thank you! More updates coming!
Assemblage Update
I hope Everyone had a wonderful Thanksgiving and enjoyed the beautiful weather. Presently we have contracts still unsigned. We have made contact with ALL remaining unsigned owners and provided them with any and all information possible. Nobody has said “NO” to signing their contracts with the assemblage. Not a single person. All remaining individuals are fully aware of this opportunity. We have spoken with all of them. If we aren't in receipt of signed contracts by the remaining unit owners by 5 PM on 1 December 2017 they will be counted as a "NO" to signing with the assemblage. If we receive an official "NO" from any of the unsigned unit owners the assemblage team will update the blog immediately informing everyone that the assemblage is incomplete, and the deal is off. We encourage all of you to please speak with your neighbors about the importance of this deal. The property is worth approximate...
I'm going to post this each time we have a blog post update, as we are fast approaching the deadline to sign, which is TODAY at 5 p.m. 95% of your neighbors have agreed to sell. That alone should let you know how generous this deal is.
ReplyDeleteTo the hold outs:
A little background on me. I am a Mensa member, have an Ivy League (Wharton classes competed) degree in economics and am a cash based real estate investor. I have purchased around $600,000 in ITP condos in the last 3.5 years that I have sold for around $1,000,000. Compare this ROI to what any other investment is paying, and hopefully you will agree that I know what I am doing in this regard.
1. $287.65/ft is a GIFT for this building. You can buy in the Eclipse, 325 Paces, 2828 Peachtree, Buckhead Village Lofts, The Concorde, Park Lane on Peachtree, Mathieson Exchange Lofts, Ovation, Phoenix on Peachtree, etc at that price per square foot. That is just in our zip code. Those building are light years nicer than ours. All those buildings have had sales in the last 6 months at that $/sq. ft or less!
2. I had my unit on the market for almost 11 months - a loft (only 6 exist in here) - the nicest one bedroom in the building on the market in Sobu (pix here: https://www.realtor.com/realestateandhomes-detail/374-E-Paces-Ferry-Rd-NE-Apt-110_Atlanta_GA_30305_M56289-69935). It was appraised 6/27/17 at $135k for 910 square feet. That is $148.35/ft. I had to show my unit about 50 times, which means I had to waste an hour cleaning it and an hour giving building/home tours to each lookie loo. You don't have to do that in this deal - they are buying your place sight unseen! This deal would appraise my old place at $261,762, which is almost DOUBLE what it appraised for less than 6 months ago! The only reason my unit sold was because the person was hoping to be a part of the assemblage. If my 910 square foot loft with 10 foot ceilings, real HVAC, huge windows, quartz countertops, larger tub/sink, stainless professional level appliances, a back door next to your parking spot and no neighbors above you on the first floor was appraised at $135k, what is your unit worth? Not NEARLY as much as you think it is! My loft unit also appraises for $10,000 more than the standard units (8 foot ceilings) due to a $5,000 upgrade for ceiling height and $5,000 upgrade for having a real HVAC system (not a wall unit). One of the major complaints from the holdouts is their unit is upgraded and worth more. My unit was a LOFT - the appraiser completely ignored my upgrades. He gets paid the same whether he does a thorough job or not. He basically takes the last 3 sales in the building similar to your unit size, divides by 3, and applies that price per square foot to your size to come up with a price. If my LOFT was appraised at under $150/ft, your STANDARD unit (126 of 132) is worth that MINUS the $10,000 bonus I get for 10 foot ceilings/real HVAC, which you CANNOT achieve in your unit.
3. We are now flagged as a non warrantable condo that banks won't loan on unless you have at least 10% down due to low reserves. I lost a deal due to this fact.
4. Our HOA fees are already 56 cents a foot and they are going up 10% in the new year to 61 cents a foot. Newer, nicer buildings have much lower HOA fees/ft - around 33 cents a foot (HALF). You not only will have a much nicer place compared to what you had before (using the proceeds from the sale and spending a similar amount), you will pay a few hundred less per month in HOA fees. The main reason our building is not appreciating is due to the fact that most of our condo fees are over $400/month. That is the invisible barrier that pushes people to look elsewhere. Ask any realtor.
5. Your leaseback includes no HOA's/property tax and you can sublease to whomever or enjoy your unit with no costs for 1 year since you already paid for it out of your sales proceeds. The new owners will also be on the hook to fix anything wrong in your unit and will probably include a concierge service for us.
6. More than 25% of the people here are renters. The board is starting to enforce that rent cap with $750/month fines for illegal renters. Only 1 person left who haven't signed is approved to rent. If we DO assemble, you can sublease to anyone you want for a year. The reason many people bought in here was due to the condo board looking the other way and allowing illegal renters - that gravy train is now over! This is a double whammy as it makes it impossible for people to rent illegally AND drains our reserves by not having the money coming from those illegal renters.
Delete7. Normal commercial sales agents charge 10%. When you sell yourself, you usually have to budget 6% to a realtor and 3.5% for closing costs. So 6% is a great commission rate and we should be happy to pay that amount.
8. I have owned 3 units in here since 2012. I love this place. But real estate is cyclical. If we don't take this deal, we will have wait about 10 years (5 years down, 5 years up) to see a similar one. We are at the all time high in prices in the Atlanta market. One hiccup (North Korea, etc) and we could see another recession. No unit ever in the history of Sobu has ever sold for the almost $300/ft they are generously offering us. Don't forget, units in here were selling in the $20,000 range just 5 years ago, and yes, you read that number correctly! (I bought one of them).
9. This building only zoned for certain height, etc. The fact that they want to use it for what it used to be and can close quickly, for a million more than last time is a GIFT! I was expecting $259/ft which was the last offer around 10 years ago. This is almost $30/ft higher! This added about $25k to my expected return.
10. They put up a building blocking ALL of the southern facing units and destroying our skyline view from the rooftop deck. They are going to do the same to the west. If we don't take advantage of this current deal, our property values are just going to continue to plummet. Our pool may be rendered useless for getting sun depending on what they build to the west.
11. If they have to fix the plumbing, it will cost over $1,000,000. Please reread that number as many times as you need to. The roof is caving in. The building is closing in on 75 years old. The writing is on the wall here.
12: No one has lived here more than about 15 years. This is not a childhood home, or some such with memories attached. This is a lifeboat pulling up to the Titanic - get IN and paddle AWAY fast!
13: You have a YEAR to figure out where to move after the last signed contract. We live in the exact center on Atlanta, many of the buildings I mentioned you could walk to!
14. Moving isn't fun, but neither is dying in a sinking ship. There are many reputable bonded/insured companies you can use, and I'm sure many would be happy to give you discount if you referred your neighbors to them.
15. I know about 5 friends/contact/neighbors here at Sobu. I have emailed/called/texted/Facebooked each one asking them to sign. I encourage you to do the same. This is a group effort!
16. For example, just between myself and three friends who live in the building, our total gross profits between the 4 of us on our 5 units would be $677,381 if the assemblage goes through. If the holdouts are costing just 4 people a chance to make an average of over $135,000 a piece, what are they doing to the other 121 people who have already signed? At this point 5% of the people are holding up the financial futures of the other 95%. This is life changing money for most people.
16.5 We are now just under $17,000,000 (SEVENTEEN MILLION DOLLARS, said in my best Dr. Evil voice) in profits that the 125 who have signed can realize based on my extrapolating out the amount of money the 5 units can make times the number of total units signed. So the 5% that are unsigned are holding back $16,925,000 million in potential profit to all of your neighbors. We all live here, we all have the same access to the building. Don't spoil the chance to spread $16,925,000 in joy to your neighbors this holiday season by signing - you also get to partake in the festivities!
Delete17. The other point the holdouts have made is they want to retire here. You want to retire in a non warrantable building that has 61 cents a foot fees, over 25% illegal renters, no reserves, no view on two sides, no skyline view from the roof, an impending $1 million dollar charge to fix the plumbing, and who knows how much to fix the roof? The OLDER the building, the more problems it has. You can take the DOUBLE the amount your unit is worth the developer is offering and move into a MUCH newer, nicer building with higher prices (which means better neighbors and amenities AND lower fees). I'm sure the 95% who want to move don't mind pitching in by carrying/packing a box or two to help the 5% who haven't signed yet. You have a YEAR of free rent, with no HOA/fees, taxes or maintenance costs, to figure out your next move, after the last contract is singed. We are all moving out of tiny condos - not McMansions.
18. Only ONE person of the final seven who haven't signed is legally allowed to rent their unit. NONE of the final 7 live here full time either.
Woohoo! Keep em coming!
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThank you to those who have signed this afternoon, much appreciated!
ReplyDeleteLord, I pray your will be done. Thank you to those who have signed and to the the team acting on our behalf.
ReplyDelete🙏 Amen 🙏
DeleteThanks to those who have signed!
ReplyDeleteTo the remaining unsigned, according to the spreadsheet, you are all looking at a nice profit, well above what you could sell for in the next 10 years... If you paid more for your place than you would have looking back, this is your chance to make more than you would sitting on the property, paying inflated fees and assessments. The whole point of investing is to make a profit... Congratulations, you did! If you sign in the next 20 minutes, that is. ;)
To the Board: In case the deal does not go through, is it possible to backdate the fees for the illegal renters? Could help pay for some of the needed repairs. ;)
Can you overdoes on Tums? Asking for an owner since 2001.
ReplyDeleteHaha, Right!
DeleteWell, the clock continues to tick...tick, tock, tick, tock. You will need at least fifteen minutes to click-sign your contracts. The window of opportunity is closing fast. Sign your contracts and join your community (loosely) at the closing table! You will be happy you did...
ReplyDeletewell, times up!
ReplyDelete