Thursday, July 07, 2005

Flipping Exchange

By Matt Reed, USA TODAY

Converted apartments aren't the only hot spot in the nation's booming condominium market. In rapidly growing South Florida, new condos are traded almost like a commodity.

Entrepreneurs have launched two online exchanges where visitors can buy, sell and "flip" condos in a global marketplace.

"Condos are more and more being bought sight-unseen, based on price per square foot and the view," says Richard Swerdlow, CEO of United States Condo Exchange, or USCONDEX.

In the Miami area alone, developers have proposed as many as 70,000 units in glossy towers to be built in the next two to four years. The Web sites aim to move them in bulk, collecting commissions along the way:

USCONDEX.com. This Web site charges developers $2,500 per building per month to showcase existing and preconstruction condos. Potential buyers can search listings from West Palm Beach to Miami and negotiate online. This year, the site will launch live auctions, similar to eBay.

CondoFlip.com. This site helps buyers of unbuilt Miami condos find secondary buyers so they can sell the condos at a higher price, or "flip" them.

In a flip, the first buyer pays a deposit and signs an agreement with a developer to close on a condo when it is finished, sometimes a year or two later. As construction proceeds, the condo's value rises, new buyers want in and the original buyer can sell the unit for a profit moments after closing. Sellers pay a 4% commission for help brokering a flip.

Condo Flip founder Mark Zilbert says flipping can't work like day trades or commodity deals, when instant transactions happen online. Florida law requires contracts and paperwork to be signed and officially recorded.

Reed reports daily for FLORIDA TODAY in Melbourne, Fla.


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