- November 23, 2024
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Five years ago, just seven people lived at the Bella Harbor condominium complex. Around 27 of the complex’s 42 units were in foreclosure or default. Only a handful of owners were paying dues to the complex’s homeowners’ association, which wasn’t enough to for it to operate.
The complex, whose construction had been completed only months before, was failing. It boasted 42 luxury units meant to sell for just under $400,000, but most of them sat empty.
Construction on Bella Harbor completed in 2007. With the Great Recession of 2008, nobody was buying. Years passed, the units’ values plummeted and the complex fell into disrepair.
Today, it’s nearly reached full occupancy and has undergone approximately $100,000 in improvement projects within the last 12 months. The complex has been revitalized under the purposeful actions of a small group of people.
“We’ve brought the place back to life,” said Bill Stoughton, one of those people. “It’s really turned around.”
Stoughton worked with his wife, Janet Stoughton of Watson Realty, Matthew Merritt of
Harbor Bowne LLC, and Chris Pagan of Watson Realty Group to make repairs to the complex, sell most of its units, and drive their prices up.
When Bill Stoughton came across Bella Harbor just over two years ago, he was in the market for a condo that needed a bit of maintenance. He and his wife, Janett Stoughton, currently live in Flagler Beach, but they plan to one day live out their retirement in a condo, which would allow them to travel for much of the year.
He bought a unit at Bella Harbor because he saw potential in it. As a relatively small complex, it was one that could be turned around with the efforts of few, he said.
The Stoughtons paid around $80,000 for their unit. Today, it’s worth around $120,000, Bill Stoughton said.
Bella Harbor was under a court-appointed receivership when the Stoughtons bought their unit, instituted when its owner couldn’t afford insurance or operating funds. The receiver, Sunburst Management, oversaw Bella Harbor’s operation.
Janet Stoughton is a real estate agent, and her husband, Bill, is a former contractor. They could tell the complex had “good bones,” they said.
Then Harbor Bowne LLC, the company Merritt works for, acquired six foreclosure units that hadn’t been sold.
“We saw the place just being able to turn the corner,” Bill Stoughton said. “I subsequently talked my brother-in-law and two of his friends into buying.”
Combined, the group now owned a significant portion of the Bella Harbor units. Their goal: Pulling the complex out of its economic slump.
The first step to doing this, Stoughton said, was getting control of the complex out of the receiver’s hands and into the hands of a board of directors. While under receivership, the complex didn’t have a homeowner’s association, and therefore, neither Stoughton nor his partners had much say in Bella Harbor’s future.
But with the home owner’s association fees accumulated from the new sales of Bella Harbor units, the complex had enough to cover its operating costs and the costs of its insurance. The group planned for form a board of directors and begin its revitalization costs then. This was August 2010.
“We thought it’d be a simple procedure to tell the receiver that we’re solvent now and that we were going to form an association,” Stoughton said. “As it turns out, that wasn’t the case.”
A struggle for control of the complex arose, which was complicated by the fact that two people, who’d purchased their units before the revitalization team did, used their votes as homeowners to keep Sunburst Management, in control.
Eventually, the Stoughtons, Merritt and Pagan’s efforts won over. A new board was formed, with Bill Stoughton acting as president, insurance was purchased, and by early 2012, the group was able to use funding from its homeowners’ association fees to begin repairing the complex.
Repairs included everything from new paint to fixing leaked roofs and problems with mold that resulted from them.
Now, prices are rising. The two realty groups Pagan and Janet Stoughton work with helped sell most of the units in the complex, and they anticipate the sale of the rest of them soon.
“What made it work was we saw there were the luxury units at a rock-bottom price,” Bill Stoughton said. “That’s really, in a nutshell, what it was.”
