Real Estate Supply

[Smiling JOe]

Thanks! I have learned on this forum that buildout time means commencement of construction, but I have also read that it takes time to get plans drawn up and approved. I'm wondering how much leeway developers would give to the new buyer.

Some developers may be willing to negotiate, yet others may ask you work that out with the seller. i.e. - not my problem. Some sellers with fast approaching start times, already have the house plans drawn and are including the plans in the sale.

 

[Joe Complete]

Our contract with Watercolor stated fines of $1000 per month or they could buy the lot back from you at the purchase price if you did not begin construction by the contract date. Supposedly Watercolor is also allowing people to buy extra time in order to delay the construction commencement date.

 

[Kurt]

Our contract with Watercolor stated fines of $1000 per month or they could buy the lot back from you at the purchase price if you did not begin construction by the contract date. Supposedly Watercolor is also allowing people to buy extra time in order to delay the construction commencement date.

You might think that with the slow market, leeway would be granted, but there are contracts signed. I don't know how you could change the deal after the fact and remain fair to everyone.

 

[SHELLY]

You might think that with the slow market, leeway would be granted, but there are contracts signed. I don't know how you could change the deal after the fact and remain fair to everyone.

I think JOE may look to folks "buying time" as a revenue generator for the company--or allow more free-time "if" owners are willing to contract JOE-certified builders & architects for their projects. That smiling, friendly "George Baily-type" JOE representative that sold lots several months ago can very well transform into "Mr Potter" overnight.

I'm expecting JOE's 4Q to come out on the downside and they'll be on the hunt for revenue-generating business as real estate hits a--shall we say--soft patch, going into the year. (Prediction: I have a feeling that JOE may announce a bump up in the dividend [or some other piece of news] before the Feb 8th 4Q release to create a price bump to beef up the CEO's "monthly $1.X million stock sale" and to cushion the not-so-good quarterly news coming down the pipe--or not. )

 

[Santiago]

Our contract with Watercolor stated fines of $1000 per month or they could buy the lot back from you at the purchase price if you did not begin construction by the contract date. Supposedly Watercolor is also allowing people to buy extra time in order to delay the construction commencement date.

It's funny that you mentioned that. Our contract does mention the buyback option but makes no mention of the $1000 per month penalty. In fact, "a friend" was recently offered the option of paying $2500 per month for a period of 12 months to delay his buildout. Apparently, this option has been accepted by 15 or so property owners who had no intention of building. The problem with this as I see it is that in the past, JOE has not enforced their buildout requirements and has not imposed any penalties. I can attest to this firsthand as I have been significantly late in starting 2 homes and did not receive any notification of this fact from JOE. Needless to say, I did not pay any penalties. I think that the problem lies in something that my attorney friends call precedent. In other words, I ain't gonna pay if everyone else didn't pay. I have been involved in several developments from their(JOE's) side and my attorney has always told me that uniform enforcement is critical when dealing with issue. To sum this up, Shelly may be correct in calling this a revenue generator. Kurt, I assume you know the identity of everyone on this board. If that is so and my identity gets divulged to "the man", it may cost you your firstborn. Just kidding but I would appreciate extreme discretion.

 

[Santiago]

As a follow up to the prior post, Rosemary Beach has always enforced their start dates and penalized the owner 1% of the original purchase price. I have been on the receiving end of these penalties and willingly paid them because i knew going in that I would have to. Again precedent is key.

 

[Camp Creek Kid]

Kurt, I assume you know the identity of everyone on this board. If that is so and my identity gets divulged to "the man", it may cost you your firstborn. Just kidding but I would appreciate extreme discretion.

Too late Santiago. I don't know you personally, but I think I know OF you. Too many clues including your old SoWal neighborhood (I have friends who live there) and the gender of your children (I think our children have friends in common). Don't forget that we live in a small town ;-) .

 

[monty]

I think JOE may look to folks "buying time" as a revenue generator for the company--or allow more free-time "if" owners are willing to contract JOE-certified builders & architects for their projects. That smiling, friendly "George Baily-type" JOE representative that sold lots several months ago can very well transform into "Mr Potter" overnight.

I'm expecting JOE's 4Q to come out on the downside and they'll be on the hunt for revenue-generating business as real estate hits a--shall we say--soft patch, going into the year. (Prediction: I have a feeling that JOE may announce a bump up in the dividend [or some other piece of news] before the Feb 8th 4Q release to create a price bump to beef up the CEO's "monthly $1.X million stock sale" and to cushion the not-so-good quarterly news coming down the pipe--or not. )

I agree with you that Joe is going to be coming up against some rough quarterly comps over the next several quarters. This might result is Joe lowering prices on lots just like other investors are doing right now in order to pump up revenues and profits. The penalties they will be charging will not benefit their bottom line as I believe the penalties go the the Homeowners Associations rather than the developer -- but I am not 100% sure of this.

 

[Joe Complete]

I was quoted the same by Watercolor, $2500 per month purchased in 6 month increments. The maximum time you could purchase was 1 year. The only reason I inquired was after noticing the start dates of some resale lots had been extended by 1 year.

 

[Santiago]

I agree with you that Joe is going to be coming up against some rough quarterly comps over the next several quarters. This might result is Joe lowering prices on lots just like other investors are doing right now in order to pump up revenues and profits. The penalties they will be charging will not benefit their bottom line as I believe the penalties go the the Homeowners Associations rather than the developer -- but I am not 100% sure of this.

I think you are correct about the HOA receiving the penalty income. I totally forgot about that.