It just came upon my knowledge a tactic employed by some Florida Real Estate investors, a tactice seldom used in Sao Paulo ( to the best of my knowledge, by the way ), Brazil, nonetheless having taken place in Sao Paulo . The rare occasions it took place here, in Sao Paulo Brazil , it was related to the hoarding of condominium office suites by a single investor holding a majority stake in an office building. Under adverse market conditions, I would daresay.
This serves as an alert to home buyers as well as to real estate investors in Large MSAs such as Sao Paulo, Rio, Florianopolis, Fortaleza. And to a very lesser extend in places such as Belo Horizonte,, Curitiba, Porto Alegre, Campinas, Recife, Ribeirao Preto,
The news team unearthed , on its 6 o'clock news, about some Miami investors are reported to be pushing resident dwellers from a Biscayne Bay Condo Association whose building features stunning bay water front views. It was reported on a local news South Florida Cable Channel.
The evictions of remaining condo owner-residents are being enacted with the sanctioning of the "Building Condo Association Deputy" ( who so happen to be an attorney, and who declined to be on camera for interviews) , an equivalent to the Sindico role in Brazil.
The news camera crew could not have to the building, where a scant few resident dwellers still reside. They provided the news outlet with some smart phone raw footage of their soon to be vacated units. Most of the remaining dwellers are elderly folk, living on meager retirement disbursements.
The way these tactics take shape is enabled through investors buying units from motivated sellers who can't afford HOA/Condo Association ever increasing monthly dues and Miami's soaring annual property tax bills. This is not about a crumbling building on South Florida beachfront. It's about prime real estate located by those marshland inland sea channels facing Biscayne Bay.
The way these situations unravel, a few condo owners might sell at below market rate ( can't affford Condo Dues ) , and then, you have your absentee owners selling their units at discount rates, and once the investors conquer majority voting rights, the unsold remainder is bought at discount rates by these very same investors and their proxies..
Now, you might wonder how this can take place elsewhere, Brazil being a possibility. This situation presents with a few possible outcomes, and as far as Sao Paulo's prime real estate is concerned.....
1.If you are an investor, you could be amassing a large amount of units within a building. Some private equity funds ( mostly Brazilian ones to date, some funded by American Financial Proxy Funds ) are , in fact, going about this. Mostly on newly developed and delivered buildings, those going back 5 years.
2.If you are buying a single or a scant few units, you could be exposed to these pushover tactics. Not a situation you want to be involved in, as a small time investor.
3..This could be also a hint that ou might want to reconsider where to park your Real Estate Dollars, and move away from Apartment Units, and into Single Family units ( rowhouses, townhomes, garages, storefronts with above walk up apartments, landmarked non public small buldings ).
As far as Sao Paulo proper is concerned, there are neighborhoods that have a large historical stock of single family/fee simple ownership units, where you can hedge your bets at very competitive asking rates.
4.You will need to Scout sites harder in order to avoid the push out trend and invest into overlooked housing stock on neighbohoods with upside.
This post invites everyone who considers himself/herself as an investor or home buyer. I do welcome replies, suggestions, annedoctal facts, rebuttals.. Please post publicly, and come out of the woodwork with your grievances, third party knowledge of facts,, or personal experiences, if you may.
Fair Disclosure....
This is not a solicitation to investors, home buyers, in an y shape or form. I am not interested in showcasing units I do not have under any listing contract, at least for the moment.
