Group effort
AUNIQUE group purchase of 14 houses over the Christmas period holds out hope for sales of other distressed property developments.
Against the odds, 14 different private buyers came together to each buy completed holiday homes in west Cork’s Mountain View, in Glengarriff. All 14 sales closed out in mid-December, with individual buyers getting their purchases for Christmas and the New Year.
It’s likely they got their homes (with a communal leisure centre itself costing more than €1 million), for an average of €85,000 each.
The houses, built by a Limerick partnership and funded by Anglo Irish Bank were for sale via a receiver, guiding around €100,000 each.
It’s likely the equivalent of a group purchase of the committed buyers meant they got a significant discount: other houses in the 23-unit development sold last year for over €100,000 each.
These 14 four-star rental/holiday homes have sold for well under build cost. They’ve been insured for €150,000 rebuild each.
None of the 14 purchasers, ranging in ages from 30s to 70s, needed a mortgage, and most buyers had long links with Glengarriff.
The remarkable deal was shepherded through by auctioneer John O’Neill of Celtic Properties. He said once he saw there was enthusiasm and enough potential buyers willing to act in agreement, he stuck with the difficult process, overcoming every hurdle along the way. “I have a tree of paper files,” he noted.
The series of sales, negotiated from August 201l to a closing in December “had about a 10% chance of succeeding I would have reckoned at the outset, but once Finn McSweeney who lives locally came on board as a leader for the purchasers, I could see it that it could work,” said a delighted Mr O’Neill.
That key local link, Finn McSweeney, is a businessman with considerable legal and contracts experience, and he already had a home a few hundred yards from Mountain View.
According to Mr McSweeney, “I had seen the scheme being built and was impressed, but the developers just ran out of money to finish it. I didn’t want a ghost estate or a Famine village on Glengarriff’s doorstep, and decided to do something about it instead. And, I reckon it will work in other places where you have enough committed local buyers.” Several buyers will rent out houses for golf tourism, he expects.
Mr McSweeney added that while the bank considered the leisure centre a liability in the sale, the buyers saw it as an asset for the entire community. He has already been contacted by other banks and receivers to see if he can apply his experience to similar sales.
“I’d like to do at least two more to prove the point, one ‘nice’ one, and one ‘impossible’ one,” said Mr McSweeney, who returned to Ireland after over 30 years working abroad.
Mountain View’s 14 houses had been over two years on the market via receiver Richard Maguire of Limerick-based O’Donovan Caulfield Lavan, who said that previous investor/speculator offers on the lot had fallen through.
“After I was approached in the summer by auctioneer John O’Neill who said he could put together a group led by Mr McSweeney, I agreed to give him the time he said he needed. What made it work was the fact everyone had a connection with Glengarriff and most knew one another. It needed trust, and it was the trust they put in Mr O’Neill and Mr McSweeney that got this through. I don’t think you could come into a town or village where you weren’t known and make something like this work,” said the Anglo-appointed receiver.
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