Debt Free Real Estate Communities - Takes the Guess Work Out of Financial Strength
What’s the big deal about being a debt free golf community? Personal finance expert Dave Ramsey calls being debt free ‘financial peace’. Blue Ridge Mountain Club, a Signature Reynolds Community defines being debt free today as ‘an Era of Confidence.’ Being debt free in this economy is a big deal because it takes the guess work out of financial strength.
How would you define debt free? To me, it’s simple – you don’t owe anyone any money. In marketing real estate communities to the public, you will find debt free is loosely defined. Debt free can be simple as stated above or private money may be involved, which you won’t know about. If an investor chooses to invest in master planned communities to build equity in trophy properties, as long as the investor has no foreclosure rights on the property or community assets, these communities may be marketed to the public as debt free. This can be confusing because there is debt owed to the investor on the project. When the ‘big money’ or an outside investor endorses a community by funding the project in exchange for equity, this could be interpreted as a bullish sign showing confidence in the value of the project. In reverse, if the lender or equity partner is funding the project to protect its financial interest, this concerns us wondering if a white flag will ultimately be raised in the future.
Don’t be afraid to ask a real estate developer or real estate sales person the financial condition of the community. By law, financial disclosure is required, although good luck obtaining a financial statement from a real estate developer. Ask the questions: Is the bank loan current? Is the project for sale as a whole? Are there pending lawsuits or liens for unpaid services? Who is funding the project? Dig deeper.
To protect you, the U.S. Department of Housing and Urban Developer (HUD) requires all land developers of subdivisions with over 100 lots file a Property Report with HUD and provide a Property Report to a buyer before going to contract. A Property Report discloses information about the property itself, local governing agencies, refund policies, financial information, proposed amenities and schedule completion dates.
You have the right to obtain a Property Report Disclosure and if this was not provided to you before going to contract, you have two years to file a HUD complaint to rescind the contract and obtain a refund.
I have seen land developers claim they are exempt from this federal law even though the community has over 100 lots platted. I have seen real estate land developers claim they are exempt from this federal law even though their community had over 100 lots platted. I have seen real estate land developers deliberately plat less than 100 lots to avoid federal disclosure requirements, maybe to avoid the hassle of filing paperwork with HUD or worse, to avoid transparency to consumers.
Working for real estate developers over the years, I have observed a variety of sales methods to get property sold. One unscrupulous tactic I have seen real estate developers use to sell property is to claim the amenities and infrastructure are bonded saying “trust me, there is no need to worry, a bond is in place for the future amenities”. After doing my homework, I learned Performance Bonds are available for a fixed period of time, typically a year. Performance Bonds are a financial insurance tool; basically insurance guaranteeing the real estate developers performance and are most times required by the project Lender. In the event, the real estate developer becomes financially insolvent, the issuing Surety of the Performance Bond guarantees to complete the work defined. Big problem with these bonds: If the project is delayed and goes beyond the fixed time period of the policy and/or if the real estate developer does not or cannot afford to renew the bond, there goes your peace of mind right out the window.
To us, debt free amenities in master planned communities are financially strong communities to consider. As of this writing, the following 24 master planned communities in the Southeast are completely debt free or have debt free amenities. Which debt free golf community is your favorite? Grey Oaks in Naples is pictured above. Consider these financially sound master planned communities first, if you are looking to relocate to the Southeast.
As we discover more debt free communities, we will continue to update this chapter on our website.
Looking out for you, Margie Casey Founder
FLORIDA DEBT FREE MASTER PLANNED COMMUNITIES:
Audubon Country Club Naples, Florida 770 acre gated community member owned and debt free
Brays Island Plantation Beaufort, South Carolina 325 properties member owned and debt free
Countryside Golf & Country Club Naples Florida gated golf community member owned and debt free
Fiddlesticks Country Club Fort Myers Florida gated golf community member owned and debt free
Grey Oaks Country Club Naples Florida gated golf community soon to be member owned
Hammock Dunes Club Palm Coast Florida golf community member owned debt free
Indian River Colony Club Viera Florida 55+ retirement gated community amenities debt free
Pelican Marsh Naples Florida gated golf community member owned and debt free
Quail West Naples Florida gated golf community member controlled, amenities debt free
Vanderbilt Country Club Naples Florida gated golf community member owned debt free
Vineyards Naples Florida debt free from start to finish, gated golf community
Wyndemere Naples Florida gated golf community member owned debt free
GEORGIA DEBT FREE MASTER PLANNED COMMUNITIES:
The Ford Plantation Savannah Georgia golf community member owned debt free
Harbor Club Lake Oconee Georgia 1000 acre gated golf lake community member owned debt free
NORTH CAROLINA DEBT FREE MASTER PLANNED COMMUNITIES:
Burlingame Country Club Sapphire North Carolina golf community member owned debt free
Champion Hills Hendersonville North Carolina gated golf community member owned debt free
Creston Black Mountain North Carolina gated mountain community member owned debt free
Echota Banner Elk North Carolina gated community amenities debt free
Hound Ears Boone North Carolina golf community member owned debt free
Jefferson Landing Jefferson North Carolina gated golf mountain community debt free
Mountain Air Burnsville North Carolina gated mountain community amenities member owned debt free
Blue Ridge Mountain Club Blowing Rock North Carolina mountain community debt free
St James Plantation Southport North Carolina waterfront community debt free
Sundrops on Caney Fork Cashiers North Carolina mountain community debt free
The Ramble Biltmore Forest Asheville North Carolina gated debt free community
The Villages at Crest Mountain Asheville North Carolina gated mountain community debt free
SOUTH CAROLINA DEBT FREE MASTER PLANNED COMMUNITIES:
Daniel Island Charleston South Carolina golf community amenities debt free
Kiawah Island Charleston South Carolina oceanfront golf community amenities debt free
TENNESSEE DEBT FREE MASTER PLANNED COMMUNITIES:
Waterside at Norris Lake Eastern Tennessee lake community debt free
Keep your eye out for the January 2012 Bliss Awards when we will name the best master planned communities by category and state.