Miami Condo Fiasco

Comment from Miguel
Time: October 5, 2007, 9:19 am

I have a couple of questions.

1. Will it be a hard link or have a nofollow on it?
2. How long will the link remain? Will you take my money and shut down the site? I think you should make sure the site is up for so many years or something.
3. What does the share really mean? I pay and you keep the place? It would behoove you never to sell the place then.

Comment from Adam
Time: October 5, 2007, 2:56 pm

If this would get popular I would get a link.

Comment from admin
Time: October 5, 2007, 8:24 pm

Hi Miguel,

1. Will be a hard link
2. The site will be up at least until I sell the property and pay back all the shareholders.
3. You can sell your share to anyone you want. I will have to sell eventually. Remember this was an investment.

Comment from Dennis
Time: October 7, 2007, 3:04 pm

How are you going to promote this? That seems to be the key these days. Once you do that, I’ll bet this idea will take off.

This will be the first of it’s kind really. You could probably turn this in to something major and end up buying the whole building from all the people that lost.

That would be something!

Comment from Samir Patel
Time: October 8, 2007, 10:09 pm

You should be careful about this. You should only be selling advertising, not “shares” which will be repaid. Carefully read up on information about the Securities and Exchange Commission.

Comment from admin
Time: October 9, 2007, 9:07 am

Samir,

You make a good point. I think I address this in my newly posted terms in plain English. Thank you for your feedback.

Zack

Comment from Joe
Time: October 11, 2007, 11:19 am

I guess it’s a true what they say about the fool and his money. Good luck to you! I hope you have a good accountant and lawyer

Comment from Jeff D
Time: October 11, 2007, 12:20 pm

Do people get back their $35, or a proportional share of the sale price?

Also, what is your incentive to seek highest price for the condo if your shareholders have already paid it off for you?

Comment from Tommy
Time: October 11, 2007, 2:00 pm

Hey man,
I saw your article posted on another site. Nice buzz you are creating. How come no names on your condo picture?

Comment from Greg
Time: October 11, 2007, 2:38 pm

I don’t want to rain on anybody’s parade, but you really should talk to a lawyer immediately. I was a securities lawyer for many years, and this looks to me like an open-and-shut case of an illegal securities offering. You absolutely do not want to do this. It will get you into big, big trouble.

Comment from admin
Time: October 11, 2007, 2:58 pm

Well I don’t want to get into trouble with the SEC. I just hope people can see what they really get for $35.50. I will try to make it more clear. Greg if you have any suggestions I certainly would appreciate it. I will certainly rephrase the ’square inch’ stuff as that may give the idea of some tangible asset. Also, there is no fine print! I have outlined the terms in Plain English on purpose! There should be no question as to what you are getting into.

Comment from anon
Time: October 11, 2007, 4:24 pm

Greg & Samir are right regarding the risk that you are exposing yourself to. Your “plain english terms” don’t help you and, in some ways, make things worse. Without giving you legal advice, you should consider removing (1) all references to a certificate or to returning anyone’s money or to repurchasing anyone’s certificate and (2) the image of the stock certificate. Just call it the right to have a link from your website. You also should return the money to anyone who paid you before you made these changes.

Comment from Anon
Time: October 11, 2007, 4:28 pm

I’m not a securities lawyer, but I’m pretty sure the issue is more than just making the terms clear. If you’re offering a “security” (and it appears to me that you are), you either need to register it with the SEC (and jump though a bunch of hoops) or find an exemption from registration. I suggest you get advice from a qualified securities lawyer right away, as the consequences for violating these laws can be very serious.

Comment from Anon-e-muss
Time: October 12, 2007, 6:42 am

Nice publicity stunt, but the SEC is bound to come knocking on this one. This is a big no-no….

Calling these “shares” and showing a picture of something labled “certificate of stock” surely means you are tramping on their turf, and to do so means you need to abide by their rules (prospectus and registration among others).

See the section labled “Are there legal ways to offer and Sell Securities Without Registering With the SEC?” in this link: http://www.sec.gov/info/smallbus/qasbsec.htm#eod6

There is no way this is exempt as currently executed.

Otherwise, good luck!!

Comment from admin
Time: October 12, 2007, 7:55 am

Hi Anon,

Thanks for that link! I was looking all over for some information about securities. Well, I thought I excluded the use of the word share on all my posts. Let me know if you find one. As for the certificate, I think I’m allowed to issue receipts, even if elaborate ones. But I certainly see your point about the confusion.
Zack

Comment from lorenzo
Time: October 12, 2007, 12:51 pm

anyone wanna lend me some shares to get short?!

Comment from Marko Petrovic
Time: October 13, 2007, 4:18 am

Hey,

So why do you have only 5 ads (blocks) with links at your map, when you say, you actually sold 1,971 blocks??

Even though you are getting media attention, link farm certainly won’t help anyone’s SEO.

M.

Comment from Matt
Time: October 13, 2007, 3:35 pm

Hey Marko,
I love guys like you. Too cheap to spend $35 bucks for your website. If the $35 gets me one conversion, I make money.

Comment from Chris
Time: October 14, 2007, 3:18 pm

Marko, its because he put down 70,000 dollars already so he owns the 1,971 blocks.

I wish this was a real stock, because I would short it, and then make money when he sells it for a 50% loss.

Comment from JimmyJ
Time: October 14, 2007, 7:35 pm

Congradulations, you now have over 1000 liens on your property that will have to be cleared up before the property can mortgaged. Let see what the title search comes up with.

Stupidity created this bubble.

Comment from Marco Santo
Time: October 17, 2007, 4:27 am

Que diabos vou fazer com um pedaço ínfimo de apartamento em Miami? Só pra dizer que tenho propriedade em miami? E quem vai morar lá de fato? Quem vai cuidar do meu patrimônio?
Pelo menos a idéia é original, tirando o cara que vendeu 1 milhão de pixels.

Comment from SERIOUSLY
Time: October 17, 2007, 11:22 am

WHAT THE HELL I GONNA DO WITH MY 1/10000 PART OF APARTMENT?
HOW MANY INCHES EXIST ON THIS PART?
I CAN LIVE THERE?

Comment from Bob Kelly
Time: October 17, 2007, 2:59 pm

I was on a security fraud jury several years back. I wouldn’t worry about the security fraud angle. If you take less than one million dollars, regulators don’t pay attention.

Comment from Glenn
Time: October 17, 2007, 10:09 pm

You can borrow all you want without paying interest. So I think it should say you are borrowing the money and will pay back without interest. Make sure that it says lender has no rights to property and is only lending.

Comment from Bob Kelly
Time: October 17, 2007, 11:50 pm

Hi Zack, I had 9 hits on my website today from the three little boxes I bought. That could be more cost-effective than Google AdWords. The viewers came from all over, so maybe you are getting famous:

Houston (2)
Boca Raton (you?)
Hallandale
Marietta
Miami
Minneapolis
Philadelphia
Thousand Oaks

Special deal at BobsBargainBeachHouse.com:
With your reservation, take off $35.50 per night and I’ll use another $35.50 to buy another square!

Good luck!

Bob

Comment from Bob Kelly
Time: October 18, 2007, 12:34 am

Hey Zack!, Take a look:

http://miami.craigslist.org/vac/452357421.html

Comment from admin
Time: October 18, 2007, 5:48 am

Hi Bob,

I love it! Hope you get some traffic. I will be posting a friends of CF post about the Beach House soon.

Zack

Comment from Bob Kelly
Time: October 18, 2007, 11:08 pm

Hi Zack,

I had 30 visitors to my website today from CondoFiasco.com. 19 of those came from the condo map. One visitor came from Stockholm. I know all this from a Google Analytics script on my site.

I’m looking forward to the CNBC interview. Thanks for the very kind “Friends of CF” write up.

Bob

Comment from Alejandro Diaz
Time: October 19, 2007, 12:55 pm

I expect this apartment to sell for about $220,000-$250,000 I deal with properties in distress and it looks like many presonstruction buyers of 851 Brickell are walking away from their deposits which will leave the developer stuck with a lot of positions that he will need to either drastically reduce the prices, have a developer closeout, and autction or offer other incentives to be able to move all these units. In my opinion you shpould walk away from your deposit instead of risking possible legal problems from going this route because you are marketing this as stock and a security

Comment from Bob Kelly
Time: October 19, 2007, 2:06 pm

“walk away…” – Where’s the fun in that?

If the location were at all desirable, I’d furnish it and use it as a corporate/short-term/vacation rental. See:

http://miami.craigslist.org/sub/

…and search for “furnished” for similar.

Comment from Bob Kelly
Time: October 20, 2007, 1:06 am

Here’s a thought. If many buyers are forfeiting their deposits and walking away, would the developer renegotiate Zack’s deal? A lower price or a lease-to-own arrangement?

Comment from Andres Marin
Time: October 24, 2007, 1:31 pm

Good Luck I just bought a % for the hell of it. Im just curious to see what the outcome is.

All you haterz ZIP IT keep your comments to yourself.

If you got burned because you were dumb enough to think the market was going to keep going the way it was then you have no say in anyting that has to do with real estate. Not everyone got burned so stop crying.

Comment from Chris
Time: November 8, 2007, 9:39 am

I have a great idea!!!!

Put all the money you make from sold shares into a CD at 5.5% interest.

Lets assume now you have 1,200 dollars.

After one year you would have 1200 + 121 dollars in interest.

You can keep the 1200, and pay back 3 original share holders there 35.50.

Basically, YOU GET TO PAY BACK THE SHAREHOLDERS WITH INTEREST AND GET TO KEEP THE ORIGINAL MONEY TO BUILD INTEREST AGAIN FOR NEXT YEAR!

THE MORE SHARES YOU SELL, THE MORE INTEREST, THE MORE PEOPLE YOU PAY BACK ON INTEREST ONLY WHILE KEEPING ALL THE ORIGINAL MONEY!

What do you think of this idea?