This Orlando Sentinal headline speaks for itself - Sold for $380,200, now appraised at $125,000: Investors helped heat up Orlando-area housing market, got burned. Lets take a look at a few snippets -
Shaeffer, one of the first investors in Orlando's Cay Club, was part of the mad rush. He was captivated by the promise of two years' worth of rental income upfront. He bought one unit and persuaded his sister to use her late husband's life-insurance proceeds to buy two more.
Cay Club brochures, Internet presentations and sales agents promised buyers across the country $35,000 in condo furnishings and membership privileges that included a jet available for club members to charter for personal use. The reality, as Shaeffer would later learn during a visit, was far from the sales pitch.
Dozens of Cay Club buyers are now suing. Investors from as far away as Hungary paid an average $300,000 in the development, while similar units nearby cost less than half that amount, appraisers reported. One Cay Club unit that sold for $510,000 two years ago was appraised recently for $90,000, said Chris Cantrell, a Birmingham, Ala., attorney for several buyers who are suing EW Sunvest Development and IMG Academies. The lawsuit contends that Sunvest and IMG shared responsibility for developing Cay Club.
EW Sunvest owns the property, and company attorney Richard W. Epstein said his clients gave Cay Club developers an option to buy the property but that EW had nothing to do with converting or selling the condos. A spokesman for IMG Academies had no comment on any plans for Cay Club, although marketing materials emphasized IMG's development of a "challenging field sports training and tournament destination."
...Now the lawsuits against developers has begun. Expect to see lawsuits for the appraisers to follow suit, as well as the reatlors who sold the properties. Especially in Florida and the other super bubble states where people now can see how they were ripped off.
The network of Cay Clubs stretching from Las Vegas to Key West is now defunct, and the development company has dissolved. Fort Myers attorneys Holly Bower and Charles Phoenix, who previously represented club principals Dave Clark and David Schwarz, each said they have no contact with them. They could not be located to comment for this article.