A Condo's Virtual I.P.O.

Necessity is the mother of invention, and it appears the housing slump has given birth to a new strategy: Imagine your condo as an initial public offering.

One real estate investor, Zack Preble, has done just that. He started a blog, condofiasco.com, to "vent" about the tight spot that he has found himself as a result of Miami's weak housing market. Preble put down $70,000 for a pre-construction condo, and is on the hook to pony up the remaining $285,000 of the sale price when his unit in the building—851 Brickell Avenue—comes ready for delivery. That could happen as early as December or January.

Paying $355,000 for the condo, in the financial district near the Biscayne Bay, sounded like a good idea in 2004, but as the market swung ever lower, Preble, who is 35, says he realized that "there was no way he was going to recoup his investment." And what's more, he's on the hook to pony up significantly more cash just to sell it.

His blog has now turned from real estate confessional to marketing vehicle, as Preble has decided to sell single square-inch shares in his condo to the public

That's right, you can buy your very own square inch of his new, 847-square-foot condo - or 10,000 square-inch shares. Preble pledges to buy them back "when and if" he sells the unit.

But they are not exactly shares, so the Securities and Exchange Commission can probably stand down on this one. Preble is technically selling this virtual depiction of the condo:

Preble is no novice to real estate: He manages internet marketing for Foreclosure.com, which provides residential real estate foreclosure listing. In an interview, he stressed that his condo efforts are completely unrelated to his day job.

He also says that while the building's developer—Related Group—could have done more to market the property, it is the local housing market rather than the particular property that's to blame for his current desperation.

Alas, not only does he not have a buyer for the condo, he has not had any buyers of the condo's square-inch links since he started listing them two weeks ago, although he has had plenty of inquiries about them.

Preble says his price is a low asking price, compared with similar units.

On his blog on August 30, he writes about a conversation with a woman in the sales office:

"So I guess my asking price of $379 is about right. The girl I spoke with said it's low.

When I asked 'then why hasn't it sold yet' she said ... 'you know ... summer time ... the market slows down'. I had to hold back my laughter/tears."

by Liz Gunnison