This April, MFE profiled a number of renovations that hit the mark. But as the story of Jim and Salomen Yuken demonstrates, not all rehabs go as planned.
The Orlando Sentinel reports that the Yukens ambituous plan to spend an estimated $40 million to renovate hundreds rundown apartments in “west Orlando has run into a few snags: bankruptcy, foreclosure and $1.4 million in code-enforcement fines.” The paper reported that Fannie Mae filed to foreclose on seven of its mortages.
The paper also reported that the Yukens still contend that this renovation will happen. In 2007 they bought 424 units in five complexes in an effort to renovate them. Last year, the Yukens sold the properties to a non profit Education Empowerment Foundation in an effort to more easily obtain financing for the renovations. The Yukens contend Fannie won’t recognize the sale (which included no exchange of cash).
The Sentinel reports that the properties owned by the Yukens “remain among the worst in Orlando.” Regardless of how this story ends, it seems to provide more evidence that while these lender-apartment owner staredowns may serve a strategic purpose, the real losers are the residents. And that doesn’t do the apartment industry any good.