Build-out extensions

[AAbsolute]

I suppose some people like to buy the right to litigate. But why would Joe invite litigation over this issue by subrogating 3rd parties to its rights under the Memo? When the litigation commences, Joe would be unlikely to avoid being dragged in as a defendant - plus, litigators are paid to find many issues, no matter how tangential over which to fight. Then you add that the litigation will involve our newly nationalized banking industry looking to protect their interests lined up with the landowner against Joe and its subrogee, and that paints one hell of an ugly picture. I'd do more than a little due diligence.

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

 

[full time]

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

The same situation in Watercolor is likely to look like one of these two:

Joe to A - $200,000.00
A to B

 

[fisher]

You are 100% correct to be careful and thoughtful.

I don't know how many times Rosemary has exercised their repurchase rights. I do know that 2 times in Rosemary Beach a lot owner was faced with having their lot taken under the provision and we bought the property during the immediate pendancy of the Action. Both times we wound up with double our investment within about 1 year. That's the hard way, but some people or businesses would consider it a successful transaction.

When the Developer exercises its repurchase rights successfully it can be enormously successful. Check out Lot 6, Block 51 Rosemary Beach:
RMB to Sandpiper $95,000
Sandpiper to RMB $95,000
RMB to L.O.F. $550,000

It might be archane in principle, but that's big profit for the right holder. The RMB to L.O.F. was a 5 month hold for RMB. Their assumed interest carry was $5,000 against a return of about $430,000

May have worked in RMB, ain't happening in Watercolor. No one in WC paid $95,000 for their lot. Lowest prices from Joe were in the low $200's and many lots are now listed (but not even selling) in that range.

WIthout giving lot numbers, several examples of why this won't work in Watercolor.

Phase III lot examples (and there are lots and lots of these)-

Lot 1 example, Joe to Person A---$777,500
Most recent comp sale--lot next door WITH a house on it--$825,000
or nearby empty lot $275,000

Tell me why Joe would buy this lot back at $777,500????

Lot 2 example, Joe to Person A---$631,500
Most recent comp, lot next door sold for $420,000 (BEFORE prices fell another 10-20%)

Why would Joe buy this lot back???

Lot 3 example, Joe to Person A---$1,231,500
Most recent comp sale $507,000

Why would Joe buy this lot back???

There is example after example in Phase III of lots that Joe sold for 10, 20, even 60% higher than current market.

Then, there is Phase IV. Average sold price of about $550,000 for 42 lots sold in 2005. You can't give those lots away these days. Why would Joe buy these back???


No way in the world Joe will buy these properties back in the foreseeable future. Some of these lots have been extended for 3 or more years now and now we hear Joe has extended another 3 years. That tells the whole story right there.

 

[AAbsolute]

May have worked in RMB, ain't happening in Watercolor. No one in WC paid $95,000 for their lot. Lowest prices from Joe were in the low $200's and many lots are now listed (but not even selling) in that range.

WIthout giving lot numbers, several examples of why this won't work in Watercolor.

Phase III lot examples (and there are lots and lots of these)-

Lot 1 example, Joe to Person A---$777,500
Most recent comp sale--lot next door WITH a house on it--$825,000
or nearby empty lot $275,000

Tell me why Joe would buy this lot back at $777,500????

Lot 2 example, Joe to Person A---$631,500
Most recent comp, lot next door sold for $420,000 (BEFORE prices fell another 10-20%)

Why would Joe buy this lot back???

Lot 3 example, Joe to Person A---$1,231,500
Most recent comp sale $507,000

Why would Joe buy this lot back???

There is example after example in Phase III of lots that Joe sold for 10, 20, even 60% higher than current market.

Then, there is Phase IV. Average sold price of about $550,000 for 42 lots sold in 2005. You can't give those lots away these days. Why would Joe buy these back???


No way in the world Joe will buy these properties back in the foreseeable future. Some of these lots have been extended for 3 or more years now and now we hear Joe has extended another 3 years. That tells the whole story right there.

I agree with your examples.

Have you read any of the recorded Memo's of Agreement for Watercolor?
Without reading them and understanding the ageement it's probably not very efficient to keep writing.

 

[fisher]

I agree with your examples.

That's the way a majority of the remaining properties look in Joe developments.

Have you read any of the recorded Memo's of Agreement for Watercolor?
Without reading them and understanding the ageement it's probably not very efficient to keep writing.

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

 

[AAbsolute]

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

I've seen a couple interesting Deed transfers in the Public Record in Watercolor. Let's see what happens.

 

[AAbsolute]

Yes I have and I still don't believe Joe will move on these buyback provisions (definitely not for three more years ;-)).

How would you apply the proposed extension of buildouts to this specific Memorandum of Agreement? I don't see how anyone, JOE included, can modify a Memo of Agreement with a casual statement.

Does anyone else with specifics on the law of Memo's against Deed have a valuable opinion to share?

I'd give JOE $25,000 for an assignment of their rights under that agreement for that lot.

 

[fisher]

How would you apply the proposed extension of buildouts to this specific Memorandum of Agreement? I don't see how anyone, JOE included, can modify a Memo of Agreement with a casual statement.

Does anyone else with specifics on the law of Memo's against Deed have a valuable opinion to share?

I'd give JOE $25,000 for an assignment of their rights under that agreement for that lot.

I think you are getting a bit off track. Joe is not going to assign their rights to you so let's get back to reality.

Simple question, why would Joe begin buying back lots. Even the lot you mention. Original purchase price was $206k. That's about the going price for lots in that area right now with prices heading lower every day. They couldn't resell it any time soon for the $206k PLUS commissions PLUS transaction costs of buying back and then reselling PLUS carrying costs.

No way are they going to start buying back lots. Forget the legal reasons why they CAN repurchase the lots and state an economic reason why they WOULD begin repurchasing lots that would simply eat up cash and sit on their balance sheet for a long, long time. No way it's gonna happen in this economic environment.

 

[passin thru]

fisher, where/when/from whom did you hear about another 3-yr extension? as a lot owner, i don't think i've gotten anything on paper in that regard, but i've also been wondering when st. joe would do something about this issue

thanks

 

[AAbsolute]

I think you are getting a bit off track. Joe is not going to assign their rights to you so let's get back to reality.

Simple question, why would Joe begin buying back lots. Even the lot you mention. Original purchase price was $206k. That's about the going price for lots in that area right now with prices heading lower every day. They couldn't resell it any time soon for the $206k PLUS commissions PLUS transaction costs of buying back and then reselling PLUS carrying costs.

No way are they going to start buying back lots. Forget the legal reasons why they CAN repurchase the lots and state an economic reason why they WOULD begin repurchasing lots that would simply eat up cash and sit on their balance sheet for a long, long time. No way it's gonna happen in this economic environment.

It looks on its face like that agreement is intact. It looks like if there is a default in that example JOE's remedy is to buy back the lot for about $206. It looks like JOE would not have to put up its cash until a time of its chosing. It looks the current Owners have agreed to the encumbrance. It looks like upon JOE's repurchase of the property they could endow the property with a new build out period of any duration as an open question of law.

I don't know anything about JOE's business so I am putting forth a complete guess example. What if JOE exercised its option on this or a few other properties to show its resolve in keeping the community build out moving forward for those Watercolor owners who did buy and build? Completion of the community has value to every owner and JOE. What if JOE bought the lot for $206,000 and had Haven Homes put in a valuable model for $325,000 in a partnership arrangement? The market says that JOE could get $700,000 for that product on that lot very quickly. That's an effective use of JOE capital. Where else can they get that ROI (48%) at this time?