Princeton Square Condominiums

Princeton Square Condominiums

The Texas real estate market of the late 1980s languished into the early 1990s. Tremendous buying opportunities became available, especially in the condominium market. The market segment that had caused enormous losses was exploitable, especially when managed by bank REO officers who were more motivated to sell than protect the bottom line.

The steepest discounts occurred when two or more lenders foreclosed on condos in the same project, especially if one lender only owned one or two condos, and another lender owned the remainder. When that occurred, purchasing the single individual condo created tremendous leverage that could be used against the other lender whose hopes of consolidating and converting to apartments were dashed with your purchase. By purchasing one unit you could effectively control the options available to the other lender. And, while it was not possible to finance condominiums, it was a relatively simple matter to finance the purchase of apartment projects, provided you could purchase all of the condos in the project.

Ascot Court was such an acquisition. Buying one condo provided leverage to force the lender to reduce the price of the other 33 units. I was able to negotiate pricing of $29,400 per unit, substantially less than the market price of around $70,000 per unit. Further, the bank who sold the 33 units provided the acquisition financing.

The property was located in the Swiss Avenue Historic District on Bryan Street, an area that was much more supportive of Class A condominiums than the Class C property this had become. By correcting the deferred maintenance and performing cosmetic remodeling, I was able to bring the property back up to a Class A property. In so doing, I successfully doubled the value of the property in less than 10 months.

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