Every real estate investor knows the old saying: "Buy when there's blood in the streets."

Well that's what's going on right now in the Miami-Dade county condominium market, according to Jack McCabe, one of South Florida's most active consultants to hedge funds, "vulture funds" and other investors looking to pick up properties at 35 to 50 percent discounts off previous asking prices.

It's no secret that Miami-Dade has the country's most crushing glut of unsold, unoccupied condo projects, with 25,000 sitting for sale -- a five year supply at current purchase rates -- plus another 19,000 units at some stage of approval or construction.

But McCabe, who is CEO of McCabe Research in Deerfield Beach, warns that getting great deals is not as easy as you might imagine. Many condominium projects are tied up in litigation, which can complicate the ability of unit owners or developers to close deals.

Plus financing is getting very tough. Most banks have lists of local projects where they won't lend under any circumstances, and private mortgage insurers have bailed out of Miami-Dade like it's a toxic wasteland.

So "cash is king," says McCabe. High leverage is out, because you can't find high-leverage loans. If you want to pick up units at half the previous price, he says, be prepared to belly up to the bar with 40 or 50 percent equity.

Better yet: Buy in bulk. Join forces with other investors to pool funds to pick up packages of distressed units from developers and banks who want to unload REO holdings quickly.

"Due diligence" in all this is crucial. You've got to know the project, the developer, the unit owners and condo association situations in depth -- and the competition on the market -- to avoid costly mistakes.

For example, McCabe has seen bargain-hunting investors pay $400,000 apiece for units and think they got a steal. Then a few weeks later they discover that the developer sold a big package of comparable units in the project for $250,000 apiece, putting the $400,000 buyers deep in a hole they never saw.

Buying real estate is not the only opportunity in hard-hit Miami, by the way. Some smart investors are focusing solely on what they call "distressed debt" -- they buy the underlying mortgages of condo units at deep discounts from banks. Then they try to work with unit owners to recast the loans into more affordable terms that keep the payments flowing, keep the owners in their units, and turn "nonperforming" mortgages into outstanding long-term investments.

It's all about seeing the opportunities, says McCabe. And playing the condo game with your eyes wide open.

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