Earn a 30% Return on a $1,000,000 Real Estate Backed Investment

As baby boomers mature and reach retirement age, building has accelerated in mild climates worldwide to meet the coming demand for retirement housing. Costa Rica was one such locale that has experienced tremendous growth in the last several years as it has exceptional year round weather and is one of the safest countries in the world. Recently, however, the global economic downturn, coupled with the difficulty of obtaining building permits in Costa Rica, have combined to dramatically slow this growth.


There is an American developer, however, who has been extremely successful in obtaining the required building permits from the Costa Rican government. This builder's relationships with the local and national governments, his understanding of local culture, and sheer persistence have enabled him to succeed where many others have failed. He has had several projects built over the last several years in the Central Pacific Coast region of Costa Rica and he now has three current projects that are fully permitted and ready to build.


The projects have been approved to receive a $35M Hedge Fund loan to complete building. However, a $1M bridge loan is required in order to secure the larger loan. Once the bridge loan is secured, the process to fund the larger, $35M loan should take 60-90 days. Once the larger loan is funded, the builder will take the first draw of $5M and with that will pay the entire principal balance of $1M to the bridge investor. With each subsequent monthly building draw, the bridge investor will be paid interest on their original investment. The total interest amount of $300,000 will be paid in even installments over the remaining draws of the $35M loan.


The $1M bridge loan will be secured by the property and will be immediately placed in escrow until it is needed to fund the larger loan.


If you are interested in participating in this project, please contact Glenn Plantone for more details.


gsplantone@gmail.com 702.938.8888 office or cell 702.769.9872

Drop Bids at Trustee Sales

Drop Bids at Trustee Sales

The Arizona Republic recently ran an article discussing the practice of "drop bids" at the Maricopa County foreclosure auction. When a lender posts a Notice of Sale amount (often referred to as the minimum bid) and then drops the amount hours or even minutes before the opening of the auction, this process is known as a drop bid and is considered illegal in Arizona. Ideally, lenders are encouraged to post the Notice of Sale amounts for foreclosure properties that will be sold at the trustee sale at least 24 hours prior to the start of the sale.

According to the article, up until recently, the majority of homes brought to auction through the trustee sale were failing to sell and were reverting back to the banks. These properties would then re-enter the market as REOs. This all changed last month as a record 1,000 properties sold through the public foreclosure auction process. This was five times the number that sold in January. According to the Republic, "Real estate market watchers and unsuccessful bidders at the auctions say drop bids are driving the record number of auction sales."

No one seems to be sure why banks would choose to lower the minimum bid without adequate notice. Those who are up in arms over the practice tend to imply that the reasons are malicious, but there are other possibilities. Kelly Braaksma, a trustee sale expert and CEO of FAST (Foreclosure Auction Service Team) a company that specializes in helping investors to purchase properties at auction, says that the uncertainties surrounding properties coming to auction may have more to do with last minute price changes than anything else. "Lenders are inundated with foreclosure properties," Braaksma says, "of the hundreds or thousands of properties slated to be auctioned off at any particular trustee sale, only a few dozen may actually make it up to bid. The rest are postponed, canceled, reinstated, etc. All the aspects of the sale, including starting bid price, are constantly in flux right up until the last minute."

Whatever the reason, the Arizona Republic continues by saying, "Drop-bid purchases enable the few who know about the deals to buy homes and quickly resell them for hefty profits...Buyers aware of the "drop bids" scoop up the houses before other bidders know about the price drops."

Mr. Braaksma has developed a system that analyzes historical opening bids from various lenders, along with a myriad of other data and generates algorithms that predict which properties are most likely to actually make it to auction and which will most likely have opening bids that make them worthwhile to investors. I have formed an alliance with FAST in order to provide this service to my clients looking to purchase at the trustee sale. I don't charge more for the service, clients pay only my standard commission at the close of a sale. But for this commission, they are provided not only with all of the reports and data that FAST generates, but also with a representative that will be present at every Trustee auction, available to purchase these choice properties and take advantage of last minute drop bids.

If you are interested in using trustee sales / foreclosure auctions to acquire property, please contact me and I will send you a packet with more information on the process:
Glenn Plantone (702) 769-9872

Click here to read the full Arizona Republic article

Mind the Gap

Mind the Gap

You know you've arrived in London when you step out of the "tube" and hear the oft-looped pleasantry over the loud speakers, "Mind the Gap!" The announcement is referring to the gap between the subway platform and the train. In the current Las Vegas real estate market, we must mind a gap of a different sort. Let me explain.

As a full-time real estate investor and investor agent (of my 80 sales so far this year, only 3 were to owner occupants) I am used to observing market trends first hand in my hometown of Las Vegas. As our market began to reach bottom 6-8 months ago, investor money from all over the country and internationally began flooding back into the valley looking to snatch up bargain priced Las Vegas real estate. For months, it was relatively easy for me to find great REO / bank-owned deals for my visiting investor clients. 85% of my clients were (and are) all cash buyers and I entertain an average of 4-6 investors each weekend. Las Vegas was (and continues to be) the foreclosure capital of the world, and for months REOs were in great supply.

But over the last several months, things have steadily begun to shift. I have had to work harder and harder to find good deals for my clients. I have repeatedly found myself in multiple bid situations and the competition for REO / bank-owned foreclosure properties has begun to drive up prices. September saw the first increase in median home price in Las Vegas in over two years. More and more investors are fighting for the properties that are available and potential owner occupants are becoming increasingly frustrated as banks accept one of the multitude of "sure thing" cash offers that seem to be present at every REO listing.

The reason for this feeding frenzy is simple: Demand is far exceeding supply. In the month of September 2009, nearly 3500 single family homes sold in Las Vegas. By contrast, only around 1800 homes went back to the banks through the foreclosure process. This creates a large "gap" between supply and demand. At first glance, one would think that this gap represents good news for primary residents struggling to sell properties through the "normal" sales process. For the last two years, it has been virtually impossible for normal listings to sell in Las Vegas as they had to compete with the overwhelming numbers of foreclosure properties that were making the market. So now that the supply of foreclosure homes is beginning to slow and the demand for properties is increasing, we should begin to see more homes selling through traditional listings right? Maybe not.

In order to understand this phenomenon, we need to be mindful of another "gap." The gap between the prices of bank-owned foreclosure properties and the prices at which owners can afford to list their homes. Prices have dropped so sharply in the Las Vegas valley over the last three years, that many properties have lost 70% of their value. Homes that were selling for $300,000 in 2004, are coming back on the market as foreclosures now for $110,000. This means that anyone who purchased property in Las Vegas in the last 10 years is probably upside down on their home. Those who purchased 3-5 years ago are drastically upside down.

This gap means that even as demand for property in Las Vegas increases, and supplies of bargain-priced foreclosure / REOs decrease, we are still likely not to see many traditional listings and closings for quite some time. The gap between what is owed on the homes and what the market will pay is just too great. The exception to this might just be the short sale, which is making a comeback as I addressed in my two previous articles.

Latest Update-MGM Signature Towers

It has been a little over three months since my last update on the MGM Signature Condos and I wanted to update my readers on the new developments that have been taking place. Those of you who are on my mailing list will have received a spread sheet I produced that details the profitability of a studio unit purchased recently for $150,000. This same unit was selling for $465,000 at its high three years ago. The spreadsheet shows that purchasing the studio unit for $150K, or roughly 32 cents on the dollar, would result in positive cash flow for the new owner.

In crunching the numbers on the MGM Condos, I have come across an interesting anomaly that I would like to share with you: The one bedroom units that are placed into the rental program have historically generated lower occupancy rates than the studios. Yet they cost about twice as much (the new lowest 1 bed sale has been $185,000), the HOA fees are nearly twice as high ($1000 vs. $500 for the studio), and they only rent for about $40 more per night. Potential investors should keep this in mind when considering studios vs. one bedroom units at the MGM Signature Towers. The one bedroom units are getting close to being a good deal for a buyer that is thinking of either living in it, renting it outside of the MGM rental program, or just holding it as a second home. But the one bedrooms are not as attractive as the studios from a pure investment perspective.


So far, the six lowest price studio sales in the entire project have been transactions that I have been able to negotiate for my clients. I was recently able to broker a deal in which one of my investors purchased a bulk bundle of four studio units at what amounted to $118,000 each. The Mountain View studio units are selling for the $120K-140K range and the strip view studios are now selling in the $140K to $180K range. The higher range would include the studios with a patio. The unit I discussed in the first paragraph that originally comped for $465K and recently sold for $150K, was a higher floor studio with a strip view and also a patio.

The inventory remains very light at this time. Currently, there are only 9 bank-owned foreclosures available in the MGM Signature Condos. 8 of them are studio units and one is a one bedroom condo. There are still quite a few short sales in various stages, but we are beginning to see a lot of short sales reverting back to the bank and becoming foreclosures as the short sale process is very slow and agents and banks are often unable to get them approved before the foreclosure happens.

Because of the light inventory of REOs and the difficulty in successfully negotiating short sales, I am beginning to look at the Trustees Sale in order to purchase affordable MGM Signature units for my investors. We are starting to see many studio units being sold at the Trustee Sale for around $120,000. MGM Signature Condos continue to be a great investment opportunity for those looking to acquire properties and utilize a buy and hold strategy. However, the really good news is that if you are looking to buy and flip, there is the opportunity to make $20,000-$50,000 per condo in a two month period through purchasing MGM Signature units at the Trustees Sale. If you are interested in this opportunity, please contact me for more details.