Trump Tower Tampa buyers dun Donald for development debts

Here's the drawback of being a billionaire with a large national profile.

Considering how many rich people lost money on Trump Tower Tampa, it's almost surprising it didn't happen sooner.

Comments

[Tino]

Many investors were neither rich nor intelligent.

Refer to past SPT blog entries/articles on partnerships that bought multiple units for $1 million each, hoping to flip them for $2 million each. Some of these losers even claimed that they invested their "life savings" in this high-stakes gamble.

These pie-in-the-sky investors apparently didn't realize that the building was not being built in midtown Manhattan, but rather an isolated stretch of the Hillsborough River (and up against the scenic Crosstown Expressway).

Even if it had been built, they would have lost their shirts. They should be happy that only their deposit is at risk, otherwise they would have lost many times more.

[Tampa Commercial Real Estate]

I always find it interesting that people make poor decisions and then look for other people to blame for the poor outcome. These people should be happy their deposits is the only thing they lost. They would be up to their eyeballs with the bank, if this pig with lipstick had been completed and they had taken possession. It is no fun to lose money, but they understood the risk, or at least I hope they did. Buyers need to chalk it up to experience and move on.

Eric W Odum
http://floridatriplenet.com/blog/

[Tampa Commercial Real Estate]

I always find it interesting that people make poor decisions and then look for other people to blame for the poor outcome. These people should be happy their deposits is the only thing they lost. They would be up to their eyeballs with the bank, if this pig with lipstick had been completed and they had taken possession. It is no fun to lose money, but they understood the risk, or at least I hope they did. Buyers need to chalk it up to experience and move on.

Eric W Odum
http://floridatriplenet.com/blog/

[Dave]

Many high-rise developers required nothing more than a bank letter of credit in order to buy a unit pre-construction. I have to give the developers of the Trump Tower dream a lot of kudos for their ability to extract a 20% down payment when the minimum unit price was $700K!! As for the investors, greed, lack of common sense and the mania of crowds is too blame. They should be extremely happy that they got back half of their deposit.

[Tino]

"but they understood the risk"

No, they didn't. Take, for example, the Fredericks, who "planned to snap up a $1.33 million unit at Trump Tower Tampa ... and nearly emptied out the couple's life savings to make the $206,600 deposit in 2005."

http://tampabay.bizjournals.com/tampabay/stories/2008/06/09/story2.html

Anyone with a 5th grade education (or possibly lower, since their realtor didn't stop them, either) could do the math:

Life savings down the hole = $206,600

Interest on $1.1 million note (avg 2005 jumbo interest rate of 6.5%) = $71,500
Condo fees & property insurance = $50,000
Property taxes (at 2.4%) = $32,000

So we are led to believe that a couple with only $200k in LIFE SAVINGS was going to be able to cough up $155,000 annually to live at the Trump?

Had they made this mistake and closed in 2006, their total losses would have been
$155k operating cost x 4 years = $620,000
$125k (conservative) annual loss in market value x 4 years = $500,000

They would have lost $1.1 million (or $800k if they sold their previous house and had no note). Instead, they are fighting to get their $200k back.

They should be thanking their lucky stars.

Thanks to the internet, scam artists and other bottom feeders can track down these people who cannot do math and attempt to fleece them in other ways. Just Google "Trump Tower" and "life savings" and you'll find a list of people with bigger dreams than math ability.

[Fuzzy Bear]

It looks more like greed to me. Make one wonder if any of those people will make the following news:

"Feds to announce more than 100 prosecutions in local mortgage fraud surge"

That list will grow well beyond the initial 100.