Posted by steve on August 01, 2008 at 12:21:41:
and we thought you knew everything. Now you admit to not being sure how to spell it.
To sell or not to sell (beach condo for 183K) - Posted by George
Posted by George on July 30, 2008 at 18:24:04:
Well, we are sitting with my wife and absolutely cannot make up our minds.
On one side, we have a qualified buyer willing and able to buy our direct
ocean view FL 2/2 condo for 183K even though the appraisal came in at
$175K
On the other hand, the contract price was $192K, but since the appraisal
came in at $175K the contract calls for a new price adjustment (no more
than 5% over the appraisal).
A little background: these condos were selling in low $300’s in 2005 and we
are able to rent it out as a vacation rental at an average of $1,500 per
month for most of the year (as much as $2,500 per month in the summer).
Obviously we do not know where the bottom is, except I feel it might be
very close to $160-175K, but I’ve been wrong before, many times.
We are not short selling, not desperate, have a fixed 15 year loan at 5.75%
and that’s why we cannot decide wether we should sell or not at $183K. We
have an option to back out.
Any suggestions, thoughts are welcome.
Re: To sell or not to sell (beach condo for 183K) - Posted by Brian_Wa
Posted by Brian_Wa on August 02, 2008 at 17:56:49:
You have an opportunity to sell beyond the appraised value and you’re not taking it? Just sell the darn thing already. You’re in the real estate business and yet you’re struggling with this seemingly small dilemma?
Brian
Re: To sell or not to sell (beach condo for 183K) - Posted by Eric in FL
Posted by Eric in FL on July 31, 2008 at 05:46:16:
George,
I have been in the short term rental business a long time and I can tell you to sell now. The numbers don’t work as you have described. Trust me, you said your taxes went down? Right? They may have at face value on property taxes but get ready for the condo tax, or the vacation rental FL tax, or the tax you because we are spenders tax. Get my point. The state will never get less then they are now and this is coming in a big way. With the huge supply of condos that are going to come on the short term rental market this is a bad property to have at the current numbers you are describing. You would essentially need to get $3000 - $4000 a month to make it work. Sell and wait for the very bottom and buy again.
Best Regards,
Eric
Re: To sell or not to sell (beach condo for 183K) - Posted by Ming
Posted by Ming on July 30, 2008 at 23:39:24:
I am missing a very important piece of info: what is your loan amount, and monthly debt service? Did you imply you paid in the low 300’s?
After you calculate your income and expense, are you in the black or red each month? Unless you’ve put down a large down payment, at the rent level, taxes, hoa given here…you are likely in the negative.
You are holding an asset here that has gone down almost 50% ( low 300’s to 175 ) . From this level, you need to double your value to get back to where you started. What do you think is the liklyhood of this happening in the foreseeable future?
Your predicament: should you keep bleeding a little (or a lot) each month and hope that the price will increase to a reasonable point, to either sell or refinance…or should you sell at a lost ,now ?
It is a personal decision within a personal set of circumstances ,unique to you, that only you can make.
Re: To sell or not to sell (beach condo for 183K) - Posted by Corine
Posted by Corine on July 30, 2008 at 19:10:09:
1,500 per month. Net in your pocket? Or is there a 40-50% management fee in that. Better check. I’m a realtor in Myrtle Beach, soon heading back to CA. Been here three years. Point. I can’t tell you how many investors I’ve spoken to in the last year with the exact same product your describing. Check and double check your numbers and cross examine the management company. You could be in for some major surprises.
I just realized I’m talking about ocean front condotels. Either way, you get my point.
I think your right! - Posted by Wayne-NC
Posted by Wayne-NC on July 31, 2008 at 19:36:17:
We can discuss the details further on this as I will arrive again in St. Augustine for the week beginning on 12/28. Remember our meeting that wasn’t last year? Lets make it happen. My answer to this debacle is to buy a timeshare. They are cheap on the secondary market. I will put my money where my mouth is. We will be at the Village of Golf, a really nice trade for our Outer Banks (where we live anyway) unit that we literally stole from a motivated seller. REI principles apply everywhere.
Re: To sell or not to sell (beach condo for 183K) - Posted by George
Posted by George on July 31, 2008 at 06:31:06:
Ming,
I actually bought it at a reasonable $160K and my debt service is $1,030
- $310 condo fees + $400 taxes and insurance = $1,740
why you can’t make money in … - Posted by steve
Posted by steve on July 31, 2008 at 16:38:52:
re sales, you want 40-50% management fee. probably want 8% on sales too.
Re: To sell or not to sell (beach condo for 183K) - Posted by George
Posted by George on July 30, 2008 at 19:17:53:
Corine,
No, this is not a condotel, it is at 1,200 sq ft 2 story townhouse style
condo overlooking the ocean across A1A. I manage the unit myself, so
no fees involved. Taxes have dropped to $3,800 and condo fees are
$310–all of which is not that bad, which is precisely why I cannot
make up my mind.
Re: I think your right! - Posted by Jen
Posted by Jen on August 03, 2008 at 04:11:28:
True…I bought a nice September week at Outer Banks Beach Club for $1 on ebay. No kidding.
Re: To sell or not to sell (beach condo for 183K) - Posted by Lightwalker
Posted by Lightwalker on July 31, 2008 at 09:18:42:
Hmmmm… Looks like your negative most of the year.
$1,740 debt service… $1,500 rent… -$240.00. Does this bother you? I have never owned a prop w/negative cash flow… This would definitely bother me. $240 per mo. for say 9 mos. is $2,160. Can this be made up over the summer months?
Unless I could get the prop to cash flow in the positive, then this would be a sale all day long for me.
lol… - Posted by michaela-CA
Posted by michaela-CA on August 01, 2008 at 08:53:34:
yes, you little burmese spirit (nat), shoo… . That’s always how you get rid of spirits. But then some people can’t get rid of their ghosts no matter what they or others do 
Re: why you can’t make money in … - Posted by corine
Posted by corine on July 31, 2008 at 17:06:10:
Steve, your like a nat that won’t go away. Shoo already. Your a pest.
Re: To sell or not to sell (beach condo for 183K) - Posted by corine
Posted by corine on July 30, 2008 at 19:26:03:
Hum. I see. Well, I’m a sporadic poster here, usually show up when I have a Q: Guilty of not contributing. Have made enemies…oh well. Do I know what I’m talking about. For the most part.
I personally will never buy or own another condo if I can help it, unless it’s a screaming deal that I can turn quickly.
I can’t stand the BS of group ownership. I have a condo in CA that I love, but can do without all the petty BS from neighbors, management, by-laws. I’ve had this opinion for the last three years. I only buy houses, with the exception of my first property which was that condo.
MY “collection” - Posted by Wayne-NC
Posted by Wayne-NC on August 03, 2008 at 05:02:51:
I never did that good!
Lawai Beach Club, Kauai $5K e-bay (buy it now) that is every year usage and floating week. I can go anytime.
Barrier Island Station, Duck week 48 $1,700 Great for points and used for my 2nd week in Hawaii.
Penthouse Beach Club, Treasure Island, Fl. $500 week 1. I bought that while staying there and met the owner of 4 weeks that he wanted to sell due to health reasons, so I bought one. It is an old building but I figured that just the land value alone divided by the number of unit/weeks is easily worth 5 times that! It has strong trading power so I stay in St. Augustine in a resort of HUGE proportions. Coincedently, I have a week reserved today at the OB Beach Club so a friend from NJ can come down so I will get to see it first hand as I check in for him today. I live 2.5 miles north of it. You have a nice time of year there. I love Sept. The only thing to watch out for is the occasional hurricane. Evacuations can put a damper on a week.
Re: To sell or not to sell (beach condo for 183K) - Posted by George
Posted by George on July 31, 2008 at 15:28:48:
Lightwalker,
$1,500 was the average assuming the summer at much higher rents
and then vacant during the fall for 1-2 months.
You are making a good point. We in FL almost never see positive cash
flows, breaking even is hard to accomplish, too. Of-course we had
10-20% appreciation to make up for the difference, but that’s out of
the picture now. I assume hardly anyone on any coast can break even.
What part of the country are you in, just out of curiosity?
We are leaning towards selling as well.
Re: why you can’t make money in … - Posted by Corine
Posted by Corine on August 01, 2008 at 05:00:41:
Gnat, a fruit fly. A pest that won’t go away.
Just correcting my typo. Actually, I wasn’t sure how to spell it.