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Mark Spector saw this coming.
“I absolutely, positively, without a doubt was worried about too many investors,” he says, referring to a prevalence of investor-owned properties in his 780-home community of Bridgewater, in Wesley Chapel.
According to Spector, even investors were worried about the impact of having too many rental properties in one area.
Lennar Corporation, Bridgewater's builder, quoted owner occupation at a rate between 80% and 90% to prospective buyers when the properties were first put up for sale, according to Spector.
Instead, Spector says roughly 60% of Bridgewater properties were sold to investors.
That scenario had major financial consequences for the Bridgewater community, which had set up both a Homeowner's Association (HOA) and Community Development District (CDD).
While the CDD managed to operate successfully via tax rolls, the HOA soon found itself strapped for cash as investor owners vacated their properties.
But after years of serious cash flow shortages, the Bridgewater Homeowner's Association is now fighting its way back to cash-flow heaven.
The most demonstrative statistic has been the HOA's liquidity. The association had $7,000 in the bank a year ago. Now, it has more than $300,000 in reserves to use to promote and develop the community and restore property values.
“Bridgewater's HOA was nearly bankrupt a year ago,” Spector notes, before pointing out that the community “now enjoys a financially secure future.”
The Association's ability to obtain cash during one of the most difficult liquidity crises in the nation's history shows that, with focus, these issues can be solved.
Spector, who moved to Bridgewater at the end of 2004, currently serves as the HOA's president, and has led the way in resolving the community's accounts receivables problem. He says the positive changes began when the right people were put in place.
And in this case, Spector just so happened to be the right man for the position; in addition to his role as HOA president, he has also assumed the role of property manager.
Spector immediately made changes, starting by working with the community's attorney, Geraldine Holloway, who was added in August 2008.
Spector and Holloway put an end to unauthorized negotiations between previous legal staff and delinquent owners, and they now claim a 95% collection rate of owed funds on recent property transfers.
Spector also enacted additional fees to balance the books, including a one-time capital contribution fee, as well as fees that also help maintain the community's aesthetic appeal.
In terms of the larger picture of outstanding accounts, the association is averaging $30,000 in monthly collections on delinquent accounts.
Some cost savings took place as well. Most notably, the association was able to restructure its 10-year bulk contract with Brighthouse Networks — a contract that was previously costing $18,000 a month.
To continue the trend, Spector hopes to attract buyers to his community that plan on living in the home they own. Those residents are much more likely to pay what they owe, he says.
Spector estimates that 60% of the community's homes are currently owner-occupied, and would like to increase that number to 75% by the early part of next year.
The association has even hired French West Vaughn, a national public relations firm with a Tampa office, to improve their image. It appears to be the first community entity to have made such a move.
While Spector now appears to be an expert on the issues facing communities like Bridgewater, he's had no previous experience in property management. His accomplishments show what motivated individuals can do to change their surroundings.
As communities across the state of Florida look to rebound, frustrated property owners can learn from Bridgewater's progress as they aim to restore value to their homes.
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