Delayed Financing Bringing Luxury Buyers Back to the Market

by Peter L. Mosca

In an economic landscape that is unpredictable at best, obtaining financing for multi-million-dollar land/homes packages has become almost impossible feat for many luxury buyers seeking to build their dream home. The developer of Colorado's luxury community Tessa Mesa outside Castle Rock is looking to change that with a rare financing package that lets buyers secure their estate site now and postpone the building process until market conditions improve.

C&A Companies, Tessa Mesa's developer, also is offering buyers interest-only financing through its preferred lending relationships for up to four years, thus allowing buyers time to sell their existing home and design their new home on a timeline that is comfortable for them. Buyers can build when the time is right for them, whether that's now or years from now.
"We understand that people are hesitant to look too far into the future while in the midst of a turbulent economy," said David Pretzler, C&A Companies principal. "We also know that banks will hardly look at new construction financing especially in the luxury custom sector. Our stimulus package gives buyers the opportunity to secure exceptional financing terms so they can build their dream home right now if they want to. These financing options are really unheard of in this economic climate." For those who want to begin the building process now, C&A Companies' lender is offering special home construction financing that requires only 20% down and gives credit for lot equity as part of the down payment.

Tessa Mesa is a 600-acre gated community comprising 16 estate lots ranging in size from 35 to 41 acres. Remaining estate lot pricing starts at $899,000. "The estate lots have level, generous, ready-to-build envelopes that make them ideal horse properties or family estates," added C&A Companies. "Zoning allows for a primary residence, up to two guest houses, a barn and other outbuildings such as a sports pavilion."

"With today's market conditions, enthusiastic and experienced borrowers are finding it increasingly challenging to gain financing in the time needed to accomplish their endeavors," added Ido Gerber, Metro Funding Corp. (MFC) associate, whose firm, a private asset-based lender from Paramus (NJ) recently announced the funding of a $1,400,000 loan for the acquisition of a 13.5 acre parcel in York (PA). MFC makes financing possible for borrowers who have strict timelines, allowing them to complete their projects successfully." After careful underwriting, MFC was able to structure the transaction in a way that allowed the borrower to acquire the property from the local school district. With a $28,000,000 HUD loan, the borrower plans to construct a residential complex, which will include affordable housing for the retirement community in the area.

Another firm doing well in this challenging environment is the Program Solutions Group, a Toledo-based commercial construction company who has achieved growth, prosperity and a high profile client list. In face, in recent months, they have been contracted for several of metropolitan Toledo's most exciting and prominent development projects, including the 500,000 sq. ft. expansion for First Solar Perrysburg, Ohio, the new Health Care REIT headquarters on Dorr St. in Toledo, and Dana Holding Corporation's relocation to new headquarters at their Maumee, Ohio, Technology Campus.
"For us, building lasting relationships is just as important as building a permanent structure," said Program Solutions Group's president, Wayne Burrer. "And you do that by having transparency and communication throughout every facet of the project -- especially in this economic climate, when every dime spent needs to be carefully managed." “We approach each project with the understanding that the growth and success of our business is fully dependent on our ability to exceed the expectations of our customers," says Burrer. "In good times and bad."

A word of caution from Edward J. Sullivan, PCA chief economist: "Without further government cash injections into the banking system, tight lending standards could characterize the economy and mortgage lending through mid-2011 dragging down home sales," he said. "Under such a scenario, the housing recovery and overall economic recovery could be delayed significantly." Whether it is delayed funding like that from the C&A Companies, or the opening of credit markets fueled by government intervention, the need for lending and money to be pumped back into the marketplace is the key to an economic – and housing – recovery. This story, and others like it, proves that industry players are doing their part to get lending moving forward.

Reprinted by permission of RealtyTimes: April 29, 2009

Use of this article without permission is a violation of federal copyright laws.

Residential Real Estate Sales On the Rise in Naples Florida

New contracts (pending sales) for residential homes were off the charts for March 2009 in Naples. And with 423 properties already closed in April, plus 1,075 pending, we are looking to surpass March averages.

The luxury real estate market is also trending higher. A $16.4 Million dollar beachfront home sold for cash on April 17th.

Meanwhile, the median sold price for residential homes continues to decline.

In recap, sales are up and prices are down. It's a buyers market in Naples Florida Real Estate.

The $1.00 Deal List: The Best Deals in Naples Real Estate - Don't Miss Out!

I don't know a buyer, investor or even Realtor out there that isn't looking for "the deal of the millennium." Deals are here, there and everywhere - depending on your definition of a deal.

I can find you a short sale or pre-foreclosure that may take three months to six months just to get an answer as to whether the bank will agree to the price, or not. I can find you a bank owned home (foreclosure or REO) for $24,900 in Naples, Florida today (April 14, 2009). I can find you waterfront home with three bedrooms and Gulf access in Naples for under $100,000 (seriously, it's there on the Naples MLS, I just checked).

Lest you get too excited, keep in mind, "one man's paradise is another man's hell (women get equality here)." A Gulf access home sold "As Is" with raised floors that are separating from the interior walls and falling back to the earth, may not be your picture of waterfront bliss. Or a two bedroom condo in a community of predominantly rental units, may not be the community where you dreamed of retiring.

At the risk of stating the obvious, it's a buyer's market and buyer's have the upper hand when it comes to negotiating price today, period. My advice, as a broker and fifteen-year veteran, is to concentrate on the location, community and style of home (condo, single-family, attached or detached villa, etc.) that meets your needs. And the deal or, better yet, value will come.

A special note to investors: Be wary of the, "I can't possibly lose money on this deal," deal. You can and you may very well. Just because it's going for thirty cents on the dollar doesn't mean it's going to sell for fifty cents on the dollar, even if you install granite and neutral paint. "Flipping" is a relic of the past. And remember you have closing costs, real estate commissions, carrying costs and rehab expenses to recoup.

For those of you looking for the "$1.00 Deal List," it does not exist, yet, in Naples. Sorry to burst your bubble of anticipation. What you will find are many excellent values that were not available this time last year. Naples Florida remains a prized location on the Gulf of Mexico that is now a bit more accessible to almost anyone who desires a truly amazing place to live, work, play, and enjoy life.

Those of you that are looking for the vacation deal of a lifetime or a family home you can really afford are in the driver's seat. Keep your sales horizon above five years and do your homework. Use the public records to find closed sales and ask your Realtor for the properties listing history (she should have it at her fingertips). Then make a reasonable offer and feel confident that you are getting the best value available today for your hard earned dollar.

Great deal hunting! May you find your piece of paradise in Naples Florida Real Estate.