Condo Spotlight: Madison Oaks at Palm Harbor

Palm Harbor, in case you’re wondering, is on the Gulf side of FL near Tampa (West Coast.) This condo conversion looks like a great leaseback deal for investors / overseas buyers… i.e. when you purchase here, they will guarantee full rent for at least two years regardless of occupancy, plus pay 2 yrs of taxes and maintenance (HOA) fees. For more information on Madison Oaks, contact us on 407-901-5161.

2 Comments

  1. Can you explain, in greater details, the lease-back and other financial terms mentioned in the advertisement?

  2. Hi Eli, good question. Here’s my understanding of the way it works. It’s not really “lease-back” as such, but an “option-back” as follows:

    2 year master lease which provides a monthly check a rate of 6.5% based on a 20% dp

    2 years Taxes which we pay on HUD directly

    2 years of HOA

    Plus you keep rent meaning they collect for the first 2 years and wire direct into an interest bearing account earning 5.7 % compounding.

    So, here’s how it works… Lets say a persons mortgage, HOA and taxes all come out to $1,500. And lets say rent is $900.

    When the master lease is over, they have that side account which rent has been deposited into for two years (in this case it is $21,600).
    Now they have to pay their mortgage on their own after year 3 which includes taxes and HOA that comes out to $1500. Keep in mind they still have a tenant paying $900 so you minus the 900 from the 1500 now you are short 600.

    But guess what? You have that account of 21,600 that you have saved, so 600 negative multiply by 12 months comes out to 7200 so you minus 7200 from the 21600 to cover year 3, you do the same for year 4, and year 5.

    Make sense? It can actually work up to 9 years at Madison Oaks.

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