Toll Brothers got their money’s worth and more. With $23.5 million they purchased the highest end new home community called Hasentree, in Wake County, N.C. This community has 323 single-family lots, 13,000 square foot family activity clubhouse, walking trails, $5 million pro shop, and a golf course designed by Tom Fazio.
Sun Trust Banks of Atlanta bought the property for $32 million last year in a foreclosure auction. Hasentree had paid about $38 million in 2005 just for the land alone, without the golf course, roads, or homes.
Appraisal value for the development was $76.4 million. This was of course during the times when the real estate market had the unrealistically high pricing. This is only one example of the million properties that were purchased for double or more than the true value of the property.
In 2006 the builders of these lots were successful in selling about 39 lots the first month and 66 more lots in the following months. When the market began to collapse, so did their sales. Plans were definitely demolished for the original developers.
What went wrong?
• Not enough research
• In 2007, the average home price was $207,000, now it is $175,000 (the builders pricing was well in the millions.)
• More than 3,000 jobs were lost in 2008
Tom Anhut, Toll Brothers’ Raleigh division president said although the property has a history of financial problems the property is kept in good shape and the future is bright. They have a lot of work to do, third of the lots are completed they have to come up with an effective plan for the rest of the land.
With the amount they purchased, they have no worries about the financial worth now and especially for the future. Many investors have their eyes wide open for the next best investment. Promising profits are in the near future for those taking risks today. From this article along we have learned extensive research is necessary to make the right choice.
Contributor, designer & admin for JohnHart Gazette.
