Good Lord, when it rains it pours, and Meridian Condos is no exception. I have previously blogged about Meridian, which is a condo community 10 minutes walk from Bellagio, Caesar’s Palace and City Center Las Vegas.
Where on earth can someone find decent condos within walking distance of about 18 billion dollars of amazing, one of a kind architecture and world class entertainment for $100 per square foot?
Only in Las Vegas baby‼
Meridian condominiums for sale in Las Vegas part one
Meridian Las Vegas condos for sale part two
Below is the latest Review Journal article about Meridian
Meridian condo owners fenced in, Company blocks main driveway at troubled high-rise
I wrote about some of the problems that Meridian faces in these articles and now their exit to Flamingo Road is fenced in by land owners due to lack of payment for the lease, however the exit to Koval is still open. The Meridian HOA owes these guys $22,000. Looks like a bunch of people are suing another bunch in Meridian, but the litigation that should concern buyers is HOA litigation and HOA budget and not buyers suing INVESCO which is the original seller. I have put in repeated calls to Jory Garbabidian, the attorney for Meridian HOA to inquire about the HOA litigation. He, like many other lawyers, is not very good about returning calls, and has not returned mine.
Anyway, what all this bad news has done is to force another price drop of about 10% for the best deals at Meridian. Although some listing agents for Meridian are not asking for cash offers, financing these units seems to be difficult and most agents are switching to cash only.
The same greed that caused original buyers at Meridian to pay $800,000 for a two bedroom condominium in Meridian in 2006 has swung the other way and although 30 condominiums have been sold in Meridian in 2009, the pricing should have never reached these levels.
Imagine a price drop of 85% in less than three years, this is madness. The Meridian has not moved to Primm, Nevada. It is less than 10 minutes walk from the center of the Las Vegas universe.
Now price per square foot for these condos has fallen to less than $100 per square foot. I don’t care how much trouble these guys are in, Meridian condos should never be priced at these levels. The way I explain this situation to my investor follows:
I usually think of the best possible outcome and the worst. So what if Meridian condos were given away for zero dollars, however the buyers were on the hook for all the litigations that the HOA is involved is and also the repercussions of other lawsuits on the HOA or condo associations. Would the investor reject these free condos? The answer is clearly a big NO since 30 condos at Meridian have closed escrow since Jan. 1, 2009.
On the other hand, how much trouble can an investor tolerate, and how much is this trouble worth? HOA or home owner associations often get in and out of trouble in Las Vegas. Park Avenue condos on South Las Vegas Boulevard (Strip) had all kinds of trouble with their HOA just as Meridian is going through. However, they resolved it the same way that Meridian home owners have chosen to pursue, they fired the HOA board and elected a new one and changed the property manager and Park Avenue is OK now.
One last point; when a buyer buys a Meridian condo or many other properties in Las Vegas that have a home owner association, the seller has to provide (or at least order while the buyer pays for it) the CC&RS or Covenant Codes and restrictions imposed by the HOA to the buyer and the buyer has five days from receiving the CC&R package to study them and then either accept or reject the CC&RS. The minutes of the HOA board’s last meeting plus the balance sheet of the HOA are provided. Additionally, the buyer can obtain a title insurance for the condominium and if there is any cloud on the title, it shows up as an exception. So it is not like there is going to be any real bad surprises.
Meridian, Las Vegas has about 600 units and any debt incurred by the HOA is divided by the same number, so divide $22,000 by 600 and the results is $37, however this additional $37 have resulted in price cuts of $5,000-$10,000 on condos currently for sale.
I am not an attorney and have not heard from the Meridian HOA’s attorney, but If all my money were not tied up in my Las Vegas office building that I am trying to sell, I would have bought a couple condos there and will as soon as I sell my office building. But again I love managed risk since reward is always proportional with the risk. I gambled everything Karen and I have on the success of my real estate web-site when I didn’t know how to design one, and won. Again, I like Meridian condos, but that is my personal opinion.
Related web-site pages: Las Vegas new and mid-rise luxury condos for sale, Las Vegas high rise condos for sale, Las homes, luxury condos and commercial properties for sale, Investing in Greater Las Vegas Real Estate
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