opportunity missed

I've been thinking for a while that new developments that haven't cleared the 50% hurdle would probably be open to negotiating substantial bulk discounts to a determined group of buyers. The problem is organizing the prospective buyers and getting them all to agree not to break ranks and buy separately.

Lofty, great idea. I think you're still looking in Williamsburg, no? I'd be game for that approach! Curious how a sponsor would react to it. There's obvious incentive to clear a bunch of units at once, but unless there's a time/financial constraint, I don't know how much of a discount you'd be able to finagle. It would be a worthwhile and interesting experiment to say the least.

my idea.

i'm in, keep me posted
prefer buildings in willyb, very close to bedford or metro

Lofty, call me at 917-797-0480 if you're interested in getting the ball rolling.

good luck guys! power to the people!

I'm pretty sure lots of different people have independently come up with this idea. I agree it is a good one. The problem, as I say, is getting everyone together into your buyer union or consortium. Depending on the building you may need to pick up 20 or 30 units to have enough leverage to get a decent discount.

Post, I agree with you about the main problem, but I have been thinking about the mechanics of overcoming it for some time now and think there are ways to do it. Of course, there will be no way to tell until I roll it out. Some experiments fail. No doubt, I am not the only one with this idea.

Why are you guys acting like a bunch of retail buyers when in fact you have created an equity fund? It's like getting U2 together and hoping to get my 6yo's birthday party gig?

Set up fund call work out groups of banks and say you'll buy the bank's debt at .70 on dollar. Foreclose on developer and share the spoils. Me, I'm working on a drug that eradicates the need for sleep. Thereby eradicating a need for a home. Wish me LUCK!

w67thstreet, if they had cash on the barrelhead then they'd be able to act as you suggest. Seems to me that folks with such a plan will probably need to obtain traditional end loans individually, which erodes a lot of their edge.

w67th, very funny. Unfortunately if you create an equity fund you have all sorts of securities laws to comply with, that hopefully wouldn't apply to just a consortium where each member agrees to buy his/her own unit at a collectively bargained price. I don't think we are talking about qualified purchasers and accredited investors here. We are talking about people who want a place to live, but at a better price.

Wellheythere also makes a good point. To get 30-odd buyers together you will likely need to include at least some (perhaps a majority) who need financing. It's much easier for a normal consumer to get a home mortgage than a margin loan on an interest in an equity fund.

Flatironj, I hope you will keep us all informed as you roll out your consortium. If you decide to put together a web site, I have an old URL that I won't be using anymore, and if you expect to make use of it you're welcome to it:

http://www.purchasersunion.org/

Hmmmmm. Create buyer union with contracts and all and have 30 ppl throw in their 20% downpayment and get commitment from bank to fund the 80% in debt to buy a distressed developer hoping to buy bf foreclosure (ie 80% all in nut). Why that's so 7yo of you guys.

Create equity fund (madoff did it, can't be too hard?), get 30 ppl to throw in 20% down, get goldman to fund 80%, get distresed debt from bank for 10/20/30% off therby making bank take a hit on top of 20% dveloper wipe. Uhhhhhhhh. Me thinks I'll go with w67th plan, no?

I'm in. Let me know if you guys really get tthe ball rolling.

Post, thanks. The title I have been thinking about for my entity is extremely close to the one you have chosen. These comments have helped give me the incentive to keep working. Feel free to give me a call.

I would be interested in principle if it were really a great deal (in absolute, sane terms...not relative to the insane peak). W11 is a good candidate , one might think. I think to make this work it has to be a group buying habitable units outright, and not getting into complex machinations of an equity fund, which becomes basically a distressed assets fund, and too complex for amateurs....and,,,until this is ready to fly, no one will want to put up huge legal fees to do something complex.I think it could be structured --off the top of my head -- as a contingent offer from the seller that only kicks in if say x number of purchasers from list y actually sign contracts (which are contingent on recieving the discount price).

My questions for this site, which includes so many doomsayers (who would seem to think we will see lots of sales like this sometime...in...the..future:

1) was this in fact a "missed opportunity"...ie. were the prices that low given the location, building quality,

2) was it evident that the sale of these units more or less solves any building problem issues regarding finances