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20 Jun 2012

Rewarding Real Estate Investments Within Miami Beach Bear Fruit For Brave Investors

By Selda Kirkan

People who were brave enough to invest on a number of condo development projects
during the economic crisis seem to now be reaping the fruits of their investments in
the real estate world.

Such is the case for a 119-unit complex development project located in Miami Beach
called Alton Pointe which was sold for $20.3 million after being turned around by an
investor who had earned an estimated $5.9 million worth of profit in the process.

However, such a case only demonstrates how bravery is definitely a quality that needs
to be present when investing in distressed real estate properties. Prior to the profitable
point it had reached, there had been numerous decisions that had to be made and some
unexpected twists along the way.

The investment company that took its chances with the Alton Pointe development had
initially purchased its debts during the latter part of 2008. During that time, there had
been talks about the developer of the investment company and his involvement in a
bribery probe which was set out for the purpose of immunity and that had eventually
brought three city officials to become convicted.

While the controversy was at its peak, the investment company had found the perfect
opportunity to make a move by purchasing a debt which was valued at around $13.1
million which they was able to settle for around 50 cents on the dollar. However, the
company soon began thinking twice about the investment.

Nevertheless, the company decided to push through with the deal having reviewed a
series of bank documents which enabled the company’s executives to feel confident
about the entire situation knowing that the company would indeed be able to take full
control of the real estate property.

While the developer of the company seems to still be involved in a legal case which
he is expected to be in trial for due to allegations made revolving around federal wire-
fraud charges made against him to which he pleads not guilty.

Alton Pointe was a development project which consists of nine building which were
constructed to serve as apartment properties alongside a hotel. It was to showcase
a “Streamline Moderne” style; however, the investment company that took over came
to the decision that it would be better off converted into a condominium instead. It
was then that financial issues started to arise as the real estate market had gradually
dropped to an all-time low.

The foreclosure process had already been in motion when the investment company
finally purchased the existing debt. However, the developer opted to allow for the
project to proceed to bankruptcy which then enabled the company to purchase the
property from an auction.

At that point, around 10 units had successfully been converted into condominiums
which were sold on the property market while one of the nine buildings had finally

been sold while remaining units within the complex had reached an occupancy of
around 50 percent.

As soon as things were looking good for the development project turned investment,
the company had begun renovations including an additional pool and a repositioning
of the development into becoming a rental complex which was definitely a good step
to take as the property market had been more than welcoming to these types of real
estate options as people who were unable to purchase property within the region had
become forced into becoming renters. Soon after that, the occupancy rate had grown
from 50 percent to 96 percent.

One of the recent sales made by the investment company involves an orchestral team
who is looking to occupy the complex with several musicians who often perform at a
nearby concert hall.

According to the chairman of the investment company, the estimated annualized rate
of return for the investment is over 20 percent, inclusive of rents received during the
rising occupancy as well as the $370,000 lump sum of profit achieved from the sale
involving a nightclub which had served as collateral for the investment.

There are definitely a lot of great opportunities for many different types of investors
who are interested in making it big on the Miami Beach real estate market. With so
many options to choose from which include distressed as well as non-distressed real
estate properties within the region, there are many rewarding investment possibilities
waiting for those who are brave enough to make an investment of a lifetime.

Selda Kirkan
phone: +1.954.3056424