Wednesday, April 11, 2007

Rollingwood Details

Following up on a post by Lander (via News10), here are some details about the Rollingwood condo conversion in Fair Oaks:

- Rollingwood was bought by a "Pismo Beach developer" and "Condominium conversion maven" by the name of Al Nevis for $39.4M, or $144K per unit.

- The Nehemiah Sacramento Valley Fund (a non-profit run by Pacific Coast Capital Partners) sunk $5.5M into the project also.

- One of Nehemiahs subsidiaries runs a downpayment assistant program for low-income buyers.

- In May 2006, the IRS ruled that seller-funded down payment assistance programs do not qualify as tax-exempt.

- According to the article, sales at Rollingwood almost completely dried up after that ruling. Coincidence?

Can anyone confirm that these buyers received "assistance" from Nehemiah? Also, does anyone have any insight into how profits from this deal were split between Nehemiah and Nevis? How much of the profit escaped being taxed?


Anonymous said...

It seems like everywhere you turn, some scam real estate company is burning the public for some real dollars. Thank you Max for shedding some light on these matters. I hope more will be revealed soon.

... said...

The Nehemiah IRS case hit the WSJ in July 2006. They might loose their non-profit status over stuff like this. Nehemiah founded locally 10 years ago, went national.

Condo project failing? not that uncommon.

Anonymous said...

There is really no way of identifying how many of these buyers received downpayment assistance, but I can tell you that I'd venture 0. DPA programs really only work in buyer's markets, because the seller must agree to participate and usually shoulders some of the costs. Red-hot markets such as Sacramento typically have no DPA activity.

But that' not to say that there isn't a story here.