John Gorrie Condos

[MusicMan]

They are alread 'In.'  I see a small cluster of cars parked on the side opposite Bold Bean. Those closing all happened last year.

[peestandingup]

Everbank is offering good financing for this project, so you're not seeing the same kind of credit restrictions on the Gorrie as you do for other projects around town.

Renting a good chuck of them would be a way, with maybe a rent to own option.

That's the worst thing you could do if you want people to buy them.  If over 30% become rentals, it's going to become difficult to find a lender that will want to finance a mortgage for you.

And people aren't buying them, so, yeah. You want them occupied or vacant?

[JFman00]

Are these not selling because of the tight credit market or because they're overpriced? I'm thinking of buying one.

Financing for condos has been tough, due to the number on the market in NE Florida, and the number having issues with HOA, people defaulting on the loans, loss of HOA funds to keep the property going, etc.

I think 2-3 have been sold. Its a hard area to sell into, there are great shops there at Stockton, but its still a tough area, and the Weavers still own the land across from 13 Gypsies and nothing has been started to create more retail. I am hoping someone buys it and rents the units out, to at least get people into the area. They are not for rent, still for sale, and I think Ms. Weaver kicked out the site agents and may be doing this work herself.

Site agent still in place. I've been told they've secured financing through Vystar, Everbank and BBVA Compass. Was told a major issue in getting the units sold is young couples not having enough cash for a 20% downpayment. Same story with Churchwell Lofts.

Anyone able to offer a comparison with 1661 Riverside and the Churchwell Lofts? I have not seen any of the former, and only saw one of the latter. I'm particularly keen on soundproofing, as I intend to buy a piano.

[JFman00]

On a side note, the 51% owner-occupancy requirement for financing is ridiculous.

[fieldafm]

On a side note, the 51% owner-occupancy requirement for financing is ridiculous.

Well, if you take a look at valuations in complexes that are majority non-owner occupied.. you'll see these units are the most severly depressed in terms of prices and market values aren't stabilizing in these projects.  The lender doesn't want a loan that's secured by a worthless asset.  If it was your money, you wouldn't want to give someone a personal loan when the only asset you can secure your investment with isn't worth the paper it's printed on. 

told a major issue in getting the units sold is young couples not having enough cash for a 20% downpayment.

I was of the understanding that Everbank's package is a first/second that doesn't require 20% down?

And people aren't buying them, so, yeah. You want them occupied or vacant?

Clearly they want to sell them, not lease them.  I can assure you the people that have bought the units don't want the building full of renters as they'll never be able to sell the homes they have bought and their HOA fees will skyrocket accordingly. 

Gorrie is actually a great value at it's current pricing levels and fee structure. 

[JFman00]

I tried to buy in the complex I'm living in now (64% renter-occupied), but was unable as there was no financing and I could buy in cash only. From what I understand, the prices are so low *because* FHA/Fannie/Freddie rules mean that people can't finance, only buy in cash.

I was of the understanding that Everbank's package is a first/second that doesn't require 20% down?

I had not been told about that. I intend on putting at least 20% down on anything I buy so it's a moot point for me.

[fieldafm]

I tried to buy in the complex I'm living in now (64% renter-occupied), but was unable as there was no financing and I could buy in cash only. From what I understand, the prices are so low *because* FHA/Fannie/Freddie rules mean that people can't finance, only buy in cash.

Once you get to that point, yes it is a vicious cycle that's hard to get out of. 

Typically how it works would be that first the complex has a rash of foreclosures(prices become depressed accordingly), the renters move in en masse, HOA fees go up, more foreclosures happen(the financial incentive would be to give your house up as you now feel you're unlikely to sell it for what it's worth over the next 5 years, plus your HOA fees have now increased 30-40% to make up for all the foreclosures-making your mortgage payment not as affordable as before) and then once you get to that point it is indeed difficult to get financing... which further depresses pricing. 

Welcome to the convuluted world of real estate 2012 post-meltdown.

Which is exactly why you want to buy high quality condos like the Gorrie, and not all the cheap junk and muffed-up apartment conversions that littered the Southside market over the last 10 years.

[avs]

Is the Gorrie an FHA approved property? The building has to be FHA approved to be able to get FHA financing.  Same with VA.  The lofts at 1951 Market had to go through a process with FHA to be able to purchase them with FHA loans.  With FHA loans first time buyers can buy a loft with 3.5% down.  That is how several of the lofts at 1951 Market have been purchased:  FHA 3.5%down.  That has really helped me, the list agent move, them. 

[Springfield Chicken]

Condos require a lot of due diligence these days so be sure to look at the financial info and other condo docs when you go to contract.  John Gorrie is new construction so you have a 15 day right of rescission period to do just that.  Amanda is right about FHA financing.  If it's approved for that it should help sales because not that many people can afford to go conventional financing these days.
Not speaking to these condos specifically because I've not been in them, sales is an indicator of what might come up in the future.  Not enough sales and the developer might go rental.  Not enough sales and the developer decides to cut prices of future units.
And when you look at the budget be sure to see what expenses could have big increases - insurance, amenities, or whatever.  You might want to compare those costs to other condos in the area as well.
All that being said, I always remind buyers that you are first of all buying a HOME, and second an investment, so numbers aren't everything.

[gsb]

Are these not selling because of the tight credit market or because they're overpriced? I'm thinking of buying one.

Financing for condos has been tough, due to the number on the market in NE Florida, and the number having issues with HOA, people defaulting on the loans, loss of HOA funds to keep the property going, etc.

I think 2-3 have been sold. Its a hard area to sell into, there are great shops there at Stockton, but its still a tough area, and the Weavers still own the land across from 13 Gypsies and nothing has been started to create more retail. I am hoping someone buys it and rents the units out, to at least get people into the area. They are not for rent, still for sale, and I think Ms. Weaver kicked out the site agents and may be doing this work herself.

Site agent still in place. I've been told they've secured financing through Vystar, Everbank and BBVA Compass. Was told a major issue in getting the units sold is young couples not having enough cash for a 20% downpayment. Same story with Churchwell Lofts.

Anyone able to offer a comparison with 1661 Riverside and the Churchwell Lofts? I have not seen any of the former, and only saw one of the latter. I'm particularly keen on soundproofing, as I intend to buy a piano.

I'm a recent unit buyer in 1661, so I'll try to address some of your questions.  For more complex questions about financing I can refer you to the broker I used, who was invaluable to me.

My purchase was a short sale and required 25% down.  The new rules for FHA financing are quite difficult for condos these days to qualify for (between occupancy requirements and owner tenant/rent ratio requirements, plus 1661 throws commercial space into the mix which I think also enters into the equation).   In other words, 1661 was not FHA approved at the time, and I don't know if it is at this point, although the various ratios have improved quite a bit in the past few months as foreclosures and short sale inventory has been working itself through.  I think the sticking point has been the rental/owner occupant ratio.

So bottom line, as of early last year when I was involved in the process, lenders were not jumping at making loans for units.  I got one a) because I was not intending to use it as an investment property or rental, b) I could swing 25% down and probably c) because I had a paid off house worth more than the loan amount as collateral.   I don't know how much more difficult it would have been without those three factors in my favor.

As for soundproofing, 1661 has concrete block walls between units and the floors are concrete.  Now, I'm sure you could make a nuisance of yourself if you tried hard enough, but for a muilti unit living space, I'm not sure you'd find too many places offering significantly better sound isolation, although they may be out there.  That said, I wouldn't go hammering out a bunch of Willie "The Lion" Smith stride at 1 in the morning.  We do have noise restrictions (I think between 10PM and 7AM -- my neighbor and I are pretty quiet so it's never come up).    As for how you would maneuver anything larger than an upright into one of these places, I don't know.  It might be a challenge on anything above ground level.

With my unit, 95% of the noise is from outside, as one sort of has to take as a given with the location of 1661 in the neighborhood (on my side you have CSX trains, the Fuller Warren, and the truck they use to, I don't know, I guess recharge the MRI trailer at the imaging center next door.  On the Margaret Street side you've got a significant amount of traffic, and vendor deliveries to the businesses, which the Association has gone to considerable length to get the commercial tenants to schedule for 7 AM or later).

[JFman00]

Thanks for the info gsb. It's kind of a moot point since the place is sold out, but it seems like the most comparable building in the area.

My understanding is that since the Gorrie is classified as a new construction, it has to sell  30% of its units within a year of completion, or 50% of its units within 2 years of completion (June/July 2011?) to qualify under FHA rules.

I've started looking at buying a 4-plex in Orange Park or some other rental building purely for income instead, then renting a nicer place with some of the proceeds. Seems to make more sense financially, especially considering the longest I'll only be in Jax 3-6 years. The Gorrie units are so gorgeous though...

[Timkin]

I hope the Weavers are successful with selling these units. They did an amazing job on renovation of the School, and I hope the market will turn to their favor, or at least they get lucky and can sell them.

Seeing this example makes me better appreciate  the struggle with rehabbing the School down the street.

[MusicMan]

John Gorrie: financing by Everbank with 5% down.

Churchwell Lofts: Amazing spaces, absolutely no soundproofing whatsoever.

1661 Riverside: I think at least one or two units available. Resales, shortsales.

The Chelsea: One unit available, just went under contract, short sale.

Last 12 months, 38 SOLD condos in Riv-Avo-Ortega. ONLY 3 WERE BELOW $100,000. 15 were over $200,000,
  4 of those at $600K or above. 

If you need a quiet unit pick a corner top floor unit, or ask the sales folks if there is a unit with no neighbors.
Also, JG has some neat 2 story lofted units with 35 foot ceilings and cool fan windows.....

[ben says]

Can anyone explain the success of 1661? Is it location and location only?

[simms3]

Success of 1661 is probably because it was the only major and still is the only major project of its type in the whole darn city, and its location is great.  Inventory is so limited and so low you would think JG would be doing better, but it's not the case.  My mother is an agent in the Avondale Prudential office and frequently acts as site agent for JG.  I haven't asked her about it, but I could.  She has also done Peninsula and other condo developments around town - maybe it's time I asked.

The prices are super cheap for what you get, and that area is a very quiet peaceful area and you have access to 13 Gypsies/Bold Bean - convenient.

In 12 months only 38 condos in 3 large neighborhoods sold.  That's not a really good sign.  You can bet many were resales at Villa Riva (my parents have pondered that building) and the condos along the river in Avondale, Ortega, and Riverside.  The fact that only 4 were over "600K" is also telling.  People blast me for pointing out that Jacksonville is not a wealthy city - it's not.  If people are having a hard time putting down 5-20% for a $150K 2 bedroom in JG, it's either because they don't have enough money or there aren't enough people who want the urban condo lifestyle or loft lifestyle in Jacksonville.  Either way does not bode well in the long run for projects like the 2 proposed in Brooklyn or any urban projects for that matter.

Also, per loan covenants and per just operational sense, the developer usually covers the HOA deficit until sold out.  It's not like because there are only 3 people living there they must pay $10,000/month each to cover the unsold units - and the lender may only do so as part of a draw on a construction loan.  It just depends.

Aside from any issues with the units themselves, or the location (which I think is good, though will only appeal to people who can stand living near some rundown houses), the place has a massive yard with mature trees all around it.  I would think it would be good for kids, too.  Single mom with 1-2 kids or newly weds with a baby...seems like a decent fit.