For the right price and in the right circumstances, Carlos Beruff will flip property.
He hasn’t done it in a decade, but after he bought land in January, Beruff was presented with an opportunity “to do a deal with someone who wanted it more than we did.”
Under his affiliated company Land Experts Inc., Beruff bought 47 parcels at a $3 million price tag in the gated Ellenton community Bougainvillea Place, located just northeast of the Ellenton Premium Outlets. The purchase was made through an online Manatee County Clerk foreclosure auction.
Within hours after purchasing the land, M/I Homes, a 40-year-old residential development company based in Columbus, Ohio, called with interest in buying the property, Beruff said.
M/I Homes of Sarasota LLC bought the 47 parcels from Beruff for $3.38 million on March 10. Beruff had one requirement for selling the land.
“We had to make a profit because we took the risk,” Beruff said. “$3 million doesn’t grow on trees.”
$383,900 profit made by Carlos Beruff in flipping Bougainvillea Place
The roughly 10-year-old Bougainvillea Place community is like a gap-toothed teenager; still growing but yet unfinished. Roughly 60 Mediterranean-style townhomes and single-family homes, some occupied, dot the landscape with empty lots scattered in between.
Prior to the January purchase, Bougainvillea Place had a more tumultuous past than Beruff’s usual land purchases of vacant, rural Manatee County land.
Beruff bought the 47 unfinished parcels in January. The land came to public auction as the result of a foreclosure with Ellenton Bougainvillea Properties LLC and Bank of America named as defendants, according to Manatee County records. Ellenton Bougainvillea Properties is an affiliated company of Sarasota-based commercial real estate broker Hembree & Associates.
The plaintiff in the foreclosure case, Bougainvillea Lenders LLC, is also a Hembree & Associates affiliated company.
Joe Hembree, president of Hembree & Associates, declined to speak on the case and directed questions to Michele Grimes, a real estate attorney with Sarasota-based lawfirm Williams, Parker, Harrison, Dietz & Getzen. Grimes was also mum about why Hembree & Associates was involved, through two different companies, as both the plaintiff and defendant in the foreclosure case.
“I don’t want to get into a whole lot of detail on that,” Grimes said. “It’s part of the confidential settlement.”
There was a confidential settlement agreement made between the original borrower, Gibralter Nottingham Heights LLC, and Ellenton Bougainvillea Properties LLC, regarding a loan default prior to the foreclosure sale, Grimes said.
Loan defaults and confidential settlement agreements aren’t out of the ordinary in the real estate world, but the Bougainvillea Place story didn’t stop there.
A company, through two affiliated companies, attempted to stop Land Experts Inc. from succeeding in the Jan. 17 online foreclosure auction purchase, according to Manatee County court records. The Blake Whitley Thompson Co. LLC and C ATL Lot Holding Co. LLC, affiliates of St. Petersburg-based Blake Communities, filed an objection to the sale on Jan. 21.
The objection alleges the companies had an agreement with Bougainvillea Lenders LLC to purchase the land for $2.89 million within five days after Bougainvillea Lenders successfully completed the foreclosure. Bougainvillea Lenders promised the Blake Whitley Thompson Co., per the court documents, that it “had authority to bid the full outstanding principal amount at the foreclosure sale to obtain title to the property.”
On Nov. 30, Bougainvillea Lenders obtained a $7.53 million judgment on the mortgage foreclosure, according to records filed with Manatee County. According to the objection, the maximum bid on the auction was set at $3 million and a third party, Land Experts Inc., bought the land for a hundred dollars more than the maximum bid.
Twelfth judicial circuit court judge Gilbert Smith found, based on precedent set by 2016 district court of appeals case Whitburn LLC versus Wells Fargo Bank, that “the movants lack standing to file the objections.”
Beruff knew nothing of the property’s storied past when he made the purchase, he said. He was in the Ellenton area on the Saturday prior to the foreclosure sale while en route to check on CrossCreek, a Medallion Home development in Parrish. Driving around to check on Medallion’s current projects is a part of the “OCD (obsessive-compulsive disorder) behavior” that he has, Beruff said.
“I was on the phone with somebody, a friend in the industry, and he said such-and-such (Bougainvillea Place) is going up for auction,” Beruff said. “And I said, ‘It’s beautiful community, we’ll buy it and build houses, and then hours after we bought it on foreclosure, someone called and asked if we would sell it.’ ”
M/I Homes plans to finish building Mediterranean-style homes in Bougainvillea Place, said David Hunihan, the area president of M/I Homes’ Sarasota Division.
“This is 11th time now we’ve gone into a neighborhood and there was a turnover or the community had stalled out,” Hunihan said. “In every instance, we try and preserve the integrity of the neighborhood.”