Co-ops can be a strategic way to purchase a great piece of property for a substantial discount. If the shareholders of the co-op purchase the land from the landowner then property values could skyrocket, as the co-op converts to a condominium (to learn more about investing in a land-lease co-op, click HERE).

For example, currently I have a great co-op unit for sale on Galt Ocean Mile in Fort Lauderdale, Florida with 41 years left on its land-lease. The shareholders have been in talks of purchasing the land from the landowner in the past, and may engage in this discussion again in the future.

3600 Galt Ocean Drive #7A is a two-bedroom, two-bathroom unit with over 1,900 square feet of living space and direct oceanfront views seven floors above a sandy private beach. The building features great amenities such as on-site security, key-card entry, heated swimming pool, library, large storage room, car wash station, recreation room with full kitchen, bar, game tables, and more.

Comparable units in condo buildings on Galt Mile are selling anywhere from $850,000 to upwards of $1,299,000. However, this particular co-op unit is listed for only $429,000. In fact, my co-op listing is the lowest priced two-bedroom, two-bathroom unit over 1,900 square feet on the beach along the entire east coast of South Florida. Is that hard to believe? Click HERE to see for yourself.

The ideal purchasers and investors of a unit in a land-lease co-op, like my listing, will be one of the following types:

1. Senior citizens who are ready to retire to the beach for life.

  • 41 years is such a distant time to comprehend that they disregard the co-op status.
  • They enjoy full use of a million dollar oceanfront property for less than half the price, and plan to enjoy the ocean breeze for the rest of their lives.

2. Individuals who are not quite ready to settle down in a permanent home and plan to move again in the next 5-10 years.

  • They purchase the unit to have the experience of a million dollar oceanfront property for less than half the price.
  • When they sell in 5-10 years they are likely to recoup their full purchase price and may even make a profit on the sale, depending on market conditions.
  • They may even decide to keep the unit to enjoy the luxury off-season, while renting it out seasonally for the remainder of the land-lease

3. Individuals who are ready to take control of their own fate and hustle to make the unit deeded as their own.

  • This type of purchaser is ready to do everything in his or her power to strike a deal with the landowner for a purchase of the land.
  • This purchaser will get to know everyone in the building and uncover each shareholder’s position and desires in a shareholder acquisition of the land.
  • This purchaser will run for and be elected to the Board of Directors.
  • This purchaser will coordinate with the Board of Directors, the co-op’s shareholders, and the landowner to come to an agreement to purchase the land.
  • Once a deal is made this individual will enjoy the rewards of ownership and property value appreciation, as the co-op converts to condominium status.

Once the mysteries of a land-lease co-op are uncovered, the investment potential could be substantial. For example, if the land of my co-op listing was purchased then that $429,900 unit could be worth $850,000 or more. After taking into account that there are 41 years left on this particular land-lease, it becomes much more attractive to make this investment dream a reality.

For more information about the listing used in this example or any real estate services, feel free to contact Richie at info@richiegallione.com or (954) 825-3758.