Grand Vista Reserve Statement

[MikeM132]

I always thought MGV had a handle on their deliberate "underfunding" of their reserve fees, as they hired some outfit to tell them how much they really need. However, looking at the statement I just received, they appear to be WAY underfunded. It makes Social Security look solid. Anybody an expert on this? Stuff like 4.5 million for new roofs, 12 est remaining years, .6 mil in account and only putting in 83K per year. What's wrong with my math?

 

[dioxide45]

Realize however that they don't replace all the roofs at the same time. There are a lot of buildings at Grande Vista, they won't need all that $4.5MM at one time in 12 years. All of their units have pretty much now gone through a major refurbishment, so their reserves are fairly depleted. They will keep pulling from the reserves each year to renovate buildings as they come on schedule.

Also consider that the information that they provide annually for reserves is what is mandated by Florida law. This is not based on what their hired analyst has provided to them. Does their roof really need to be completely replaced every 20 years, or can they make use of repairs to make it last 25 or 30? They don't need to replace it based on the schedule provided, they just have to disclose it that way.

Also when you have owners happily following the boards direction and voting to waive the fully funding of reserves, you have the potential to get in to trouble.

 

[MikeM132]

Not just the roof....every single category was severely underfunded. They are funding a small fraction of their estimates. Their life expectency estimates would need to extend several times what is listed for them to be solvent. This is gearing up to assessment.

 

[Big Matt]

Depending on what the roofs are made of will dictate how long they last. Many will last 50 years. The buildings are made out of steel and concrete, and I don't see them falling apart any time soon.

Where I get concerned is when they don't fund the interior maintenance and things like pools, spas, etc.