LM Funding helps local condominium association get back on track
by Matt Algarin
Normally if something sounds too good to be true, it is. But that’s not the case with LM Funding, said Sean Galaris, president of the Tampa-based company.
“There’s not really any companies like us,” he said.
LM Funding is a financial services company that provides principal secured funding to condominium associations facing the struggles of delinquent association dues. As they like to say, LM Funding “buys problems.”
The problem facing condo associations throughout the state of Florida and nationwide are owners who, due to the economy and other factors, are not paying their assessments. Without the funding, the associations must find ways to remain solvent, which can include raising fees and implementing special assessments to make up the difference.
The service provided by LM Funding, which makes money by collecting only the late fees and interest against the delinquent accounts, has seen a local success story. Joseph Antoon, president of the condominium association at the Sides of Moreno Point West, said LM has recovered more than $120,000, which included $105,806 in initial cash and the recovery of delinquent accounts and $15,000 in legal fees.
Two year ago, Antoon said his association was becoming overwhelmed with the costs of legal fees and they were having little success collecting on their delinquent accounts. At the time, 12 out of his 44 units were delinquent, which meant that they didn’t have access to the primary mortgage market since more than 15 percent of their units were delinquent.
Since they couldn’t qualify for mortgages, Antoon said they would have only been able to deal in cash transactions to buy and sell units.
In 2009, he said that roughly 30 owners were sharing the burden of the monthly fees instead of the 40-something that should have been.
Since joining forces with LM Funding, Antoon said the Sides at Moreno Point West have seen a tremendous turnaround and are back on solid financial footing. Looking at the numbers, LM Funding was able to collect 104 percent of the back-owed assessments on behalf of The Sides of Moreno Point West.
“We’ve been able to fully fund our reserves, keep our HOA fees at $3 a square foot and not use special assessments,” he said. “They’ve benefitted our association tremendously.”
Galaris told The Log that overbuilding in the condo market caused the initial problem, and the “fuel on the fire” was condo prices that appreciated unrealistically.
“It was a game of musical chairs until there were no chairs left,” he said, noting that there are condos all over the state that don’t have enough paying owners. “Our goal is to keep the condo associations whole.”
By purchasing the delinquent accounts of the associations, LM Funding provides them with upfront cash, which is not a loan, to get them back on track as they begin the collection process. As LM Funding begins to collect the past due assessments, they refund it to the associations.
“We collect 93 cents on the dollar,” Galaris told The Log. “We fight the fight for them… and get the associations the money they deserve.”
LM Funding also pays all of the legal fees associated with the collection process, which can typically cost clients up to $10,000 if they hired a private attorney.
“By covering their legal costs, the associations don’t have any risks working with us,” Galaris said.
LM Funding is currently working with more than 350 condominium associations and has 7,000-8,000 units under management. LM Funding can be reached at (866) 235-5001.
Given the success that LM Funding has seen, Galaris told The Log that the most rewarding part of his job is being able to help associations in need.
“It’s nice to be apart of something that’s bigger than yourself,” he said.