The beautiful but beleaguered Veranda Park condos in MetroWest finally had their remaining units picked up by a Canadian buyer from the bank.Â The sale, towards the end of last year means that the Canadian buyer Geosam Veranda LLC,Â now has a majority interest in the residential block. This means they can raise the monthly dues (COA fees) if they wish. For example, they could raise them on a 2-bedroom, 2-bathroom from about $350 to about $950. Oh look, they just did.
We’re not sure what the rationale is here but a one might almost assume that there is an attempt underway to push the remaining 20 owners out of the building so that the Canadian group can control the entire inventory. On the other hand, I’m sure the Canadians would say that since there are only 20 owners in the building (the rest are rented), it’s just a question of Â dividing the monthly obligations by the number of owners… et voila, that’s an extra mortgage payment from you all each month, thank you very much. And if the current owners say, “You gotta be sh*tting me” and foreclose, guess who’ll be there to buy them back from the bank… Something doesn’t smell right here – but does it ever?
So, while Veranda Park is still one of my favorite projects in Orlando, and while I’ve been recommending it to investors in prior Veranda Park blogs, I can’t imagine anyone really wants to pay home owner fees in excess of the rent itself without any assurances that the condo fees won’t include your first born child by this time next year.
So for now Geosam will just continue to rent out the units and cashflow them as best they can. One thing’s for sure. When they resell them as the market improves, they’ll be looking to recoup the millions they spent investing in the purchase itself. For that, I can’t blame them. The purchase was a risky one and there’s a lot of work to be done to bring the building back up to par, after several years of neglect.
Watch this space and also the MetroWest real estate blogÂ for future pricing.