Anyone Own Property in Las Vegas?

[Potty]

Originally Posted by Winsor_Pilates

All good points you made, but I just want to comment on this one.
When the final strata plan is filed with the city, the developer becomes the owner of all unsold units and is responsible for the strata fees. So if the building is 50% sold or 90% sold, it shouldn't change your strata fees. Howerver, it doesusually need to be 50% sold to form strata.

And when the developer goes bankrupt because he has 50% of the suites unsold in a building???

[Winsor_Pilates]

Originally Posted by Potty

And when the developer goes bankrupt because he has 50% of the suites unsold in a building???

If they've already completed construction without going bankrupt, the chances of strata fees doing them in is slim to none. Financiers would have cut the strings during construction if the developer's finances are that bad and minimum sales requirements haven't been met.

[Potty]

Originally Posted by Winsor_Pilates

If they've already completed construction without going bankrupt, the chances of strata fees doing them in is slim to none. Financiers would have cut the strings during construction if the developer's finances are that bad and minimum sales requirements haven't been met.

Most projects in Canada are financed at about 15% equity, with the remaining 85% financed. Probably about 65+% of suites need to close to get a project loan paid out, or interest on the remaining loan keeps on getting charged at an increased rate once the loan is past due. If a building is less than 50% sold, you have big problems, but paying strata fees is the least of them. Lots of developers have also been using mezzanine financing as their project equity with terms of up to prime +8 during construction and prime +12 after construction is completed which compounds this even more.

And financiers are very hesitant to cut lending strings during construction as it will most likely let existing sales contracts off the hook and delay the project for up to a year, which is almost always a worse option than working with the developer to finish the job, even if enough sales aren't in place.

[Winsor_Pilates]

Originally Posted by Potty

Most projects in Canada are financed at about 15% equity, with the remaining 85% financed. Probably about 65+% of suites need to close to get a project loan paid out, or interest on the remaining loan keeps on getting charged at an increased rate once the loan is past due. If a building is less than 50% sold, you have big problems, but paying strata fees is the least of them. Lots of developers have also been using mezzanine financing as their project equity with terms of up to prime +8 during construction and prime +12 after construction is completed which compounds this even more.

And financiers are very hesitant to cut lending strings during construction as it will most likely let existing sales contracts off the hook and delay the project for up to a year, which is almost always a worse option than working with the developer to finish the job, even if enough sales aren't in place.

That doesn't make sense. If 65% of units need to close to pay off loans, why would these completed buildings have only 50% sold units?
No lender, especially now would give a loan to a developer with 50% sales, if they need 65% to break even.
You're sure right if 50% isn't sold there's much bigger problems than strata fees, which is why I quoted that part of your original post in the first place. Not something and investor looking at finished buildings should need to worry about.

Also, financiers sure do cut lending mid construction. I'm going though a huge lending cut right now on one of the biggest developments in Canada. The financiers and running away and selling off for only about 30 cents on the dollar of what they invested so far.
Expect to see it more and more. Financiers won't continue to throw money away into dead projects, and would rather cut their losses. Developers also would likely stop selling early in the process and hold off for better markets.

anyway we're getting off topic; point being it's very unlikely any finished buildings in Vegas have only 50% sales and are not gonna be able to pay their strata fees. That's like being able to afford a Mercedes, but not a tank of gas. What's more likely is building with 50% sales is still a field and not part of these investments anyway.