Miami Beach Condos: The New Miami Condo Market: Goodbye Investors?

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By Robbie Whelan
Last month, when we profiled Miami “condo king” Jorge Pérez, whose Related Group of Florida built more than 5,000 condos during the housing boom, and who is now planning a comeback involving a number of new construction projects, we explained his new strategy this way:
Related also plans to finance much of its new projects by unconventional means, requiring buyers to pay more than 70% of the cost of building their condos before closing, instead of just a 20% down payment on the property, as was typical in the past.
In an interview Thursday, Mr. Pérez elaborated. In two new projects that he plans to start by the end of 2011, as well as in three more large condo projects in Related’s pipeline, the company plans to ask buyers for a 20% down payment, another 20% at the start of construction and another 40% during the construction period. That means that condo buyers will be expected to shell out 80% of the cost of Related’s new units before setting foot in them.Mr. Pérez explains that this strategy is typical of how things work in other countries, and , Miami is crawling with international buyers these days.“Ninety percent of the deals in Latin America, where we expect almost all our buyers to come from, are done in this way,” Mr. Perez says. “The name Related will become very important here. We will give the buyers our corporate guarantee that it will be completed on time.”Accordingly, Related has formed a partnership with International Sales Group, a large brokerage that says it has a network of real estate agents in South America it can tap to recruit buyers. The first deal to make use of this financing structure will be Apogee Beach, a 200-unit condo building in Hallandale Beach (not far from Pérez’s failed Trump Hollywood project), which is expected to break ground in September. ISG says pre-sales have begun on the project, which is expected to cost $60 million, 20-30% of it paid for with cash from Perez’s pockets, and they are selling mostly to South Americans.

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About Pamela's Blog

Pamela Diaz-de-Leon With an accomplished background encompassing Diplomacy, Architecture, Business and Film, Pamela Diaz-de-Leon brings to the real estate industry the entrepreneurial expertise which stem from her interdisciplinary experience. Her world wide network of distinguished personalities carefully knitted of relationships formed in her five years as the Cultural Attaché for the Instituto Cervantes, serving the King of Spain, in Chicago, and her Hollywood connections acquired while working with a recognized film distributor, give her the global platform in which she has developed her business with great success. Knowledgeable, informed and organized she holds ethics and integrity as her highest values thus, providing her customers with an excellence of service that ensures their utmost satisfaction and their continued loyalty to her work. Office. 305.677.5055 Cell. 305.720.8439
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