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Lake Austin Properties I, Ltd. – Eighth Update

Lake Austin Reserve Developer Visits United Kingdom to Propose REIT Concept 

Urban Thier & Federer, P.A. has learned from current clients and other sources that Paul Oxley is personally calling purchasers and asking them to continue with their purchase of a Lake Austin Reserve Grande Palisades unit or to switch their Avalon and/or Magnolia Woods unit to a Grande Palisades unit. We have addressed some of the economic factors relevant to continuing with the purchase of a Lake Austin Reserve unit in other articles. See, for example, Lake Austin Properties I, Ltd. – Fourth Update – The Future of the Grande Palisades and the Oversupply of Disney Area Condominium Hotels (Condo-Hotels).

We have also learned that on February 11 and 12, 2011 Paul Oxley hosted “Lake Austin Developer/Owner Meeting” sessions in Chessington, United Kingdom. The invitation provides that purchasers are invited to meet with the developer of Lake Austin who will discuss the project’s current position and future. The Lake Austin Reserve’s current position and future have previously been addressed via the above referenced and the following article: Lake Austin Properties I, Ltd. – Fifth Update – The Grande Palisades and Lake Austin Properties I, Ltd.’s High Pressure Tactics.

It appears that the Lake Austin Developer/Owner Meetings were an in person attempt by Paul Oxley to further pressure purchasers to continue to stay the course, close on the purchase of a Lake Austin Reserve unit and otherwise not terminate their contractual obligation to purchase a unit. The only change or variation appears to be that Lake Austin Properties I, Ltd., now plans to continue the Lake Austin Reserve as a REIT (Real Estate Investment Trust). Like any trust, a standard REIT is comprised of a Trustee (who has “legal title” of the assets and is paid to control the assets, make investment decisions and answer to the beneficiaries), Beneficiaries (who have “equitable title” and whose rights are set forth in the trust agreement) and the Corpus (the actual asset in the trust/REIT). In our opinion, such a REIT structure would only serve to add additional complexity to the purchase and to increase the opportunity for Lake Austin Properties I, Ltd., Paul Oxley, hedge fund(s), the bank(s) and/or others to add additional fees. We are at a loss as to how the REIT concept has any significant impact on the economic realities or analysis from the purchasers’ perspective.

Urban Thier & Federer, P.A. encourages all purchasers to contact Paul Oxley, Lake Austin and any other person or entity that is willing to discuss the Lake Austin Reserve’s economic viability, the Disney and Orlando area condominium-hotel market, and other relevant issues. Armed with the information contained in this law firm’s articles, The Affinity Partnership Ltd.’s recent emails, and their own independent research and due diligence, Lake Austin Reserve purchasers should ask the difficult questions and request clear responses about market valuations, income potential, comparable properties in the relevant market, prior Maesbury Homes, Inc., and other Paul Oxley related developments, etc. Purchasers should also demand written confirmation of representations as to the economic, valuation and investment aspects of the contemplated purchase as well as the status of any rental guarantees.

In our opinion, here is what appears to be at stake – the push to sell the 188 completed Grande Palisades C1 units, if successful, would result in 188 units being sold for approximately $300,000.00+ each for a total of over $56,000,000.00. This would certainly provide ample incentive for a third party financer to loan or release $40,000,000.00+ and would still leave millions for Paul Oxley, Lake Austin Properties I, Ltd., the mortgage holder(s), and/or others. However, this does not change the economic analysis pertaining to purchasers. As set forth in the above referenced articles, the fact remains that the comparable unit valuations in the current market appear to be a mere fraction of the contracted for prices. In addition, assuming the Grande Palisades phase is completed to a sufficient degree to allow rental of units, unit owners would still have to pay any monthly deficit between net rental income, to the extent that there is any, and all management, maintenance, association fee, insurance, property tax and financing costs.

Urban Thier & Federer, P.A. encourages all purchasers to do their own independent due diligence and research. You can also learn more about Lake Austin Properties I, Ltd.’s Lake Austin Reserve Grande Palisades, The Avalon and Magnolia Woods Resort phases via these previous articles and updates:

Current Updates:

  • Lake Austin Properties I, Ltd. Tenth Update – Urban Thier & Federer, P.A. Answers Lake Austin reserve Purchasers’ Questions in Person in the United Kingdom and Provides Factual Information
  • Lake Austin Properties I, Ltd. Ninth Update – Lake Austin Properties I, Ltd., Raises Bankruptcy and Other Issues to Encourage Grande Palisades, Avalon and Magnolia Woods Purchasers to Continue with an Economically Unjustifiable Purchase.

See also previous updates:

  • Lake Austin Properties I, Ltd. Seventh Update – The Importance of Understanding Your Chosen Law Firm’s Litigation Strategy and Your Own Litigation Priorities
  • Lake Austin Properties I, Ltd. Sixth Update – Lake Austin Joins Forces with IAP/IAP Global Veteran to Replace The Affinity Partnership, Ltd.
  • Lake Austin Properties I, Ltd. Fifth Update – The Grande Palisades and Lake Austin Properties I, Ltd. High Pressure Tactics
  • Lake Austin Properties I, Ltd. Fourth Update – The Future of the Grande Palisades and the Oversupply of Disney Area Condominium Hotels (Condo-Hotels)
  • Lake Austin Properties I, Ltd. Third Update – Fuel USA and Affiliated Attorneys and Solicitors
  • Lake Austin Properties I, Ltd. Second Update – The Affinity Partnership, Ltd. and Related Entities
  • Lake Austin Properties I, Ltd. Update – Status of Buyers’ Deposits
  • Lake Austin Properties I, Ltd. Grande Palisades, Avalon and Magnolia Woods – Status and Rights

We encourage all purchasers to interview any attorney that they may be contemplating to retain and to ask that attorney for their experience, record in this area of the law, number of cases taken to final judgment, number of cases affirmed on appeal, number of attorneys in the firm, firm staff, resources, etc. We sincerely believe that purchasers should not retain an attorney or law firm until they are confident that 1) the law firm has the experience and resources to represent their best interest and 2) they fully understand the law firm’s litigation strategy.

The Florida Bar, which regulates all attorneys who are licensed to practice law in the State of Florida, provides strict guidelines which prohibit us from referring to past successes or results obtained for other purchasers in this or other developments. However, we can provide you with this and other information in response to any inquiry. Accordingly, we encourage you to contact us via the “Contact Us” page and we will promptly respond with additional information.

With attorneys in Orlando, Florida, and Munich, Germany, Urban Thier & Federer, P.A. continues to assist buyers throughout the United States and European Union countries who are seeking to terminate their pre-construction purchase agreements. Most cases can be handled on a contingency fee basis (client is responsible for costs).

We encourage you to explore our website – to learn more about Urban Thier & Federer, P.A., its attorneys and practice areas. Urban Thier & Federer, P.A.’s representation of buyers includes litigation of cases in state court, federal court and arbitration proceedings. We encourage you to become informed of your rights and options. You should also ensure that any law firm you consult or retain to represent you has the experience, resources and ability to take your case through trial and appellate courts, if necessary.

Please note that Urban Thier & Federer, P.A. does not represent you and cannot take any action on your behalf unless and until you enter into a formal written Legal Representation Agreement.

John L. Urban, Shareholder

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