Vultures have been circling over the slumping Southwest Florida real estate market for a while, but few have descended to snatch properties from increasingly desperate builders and developers -- until now.

Documents obtained by the Herald-Tribune show that Joseph L. Long, a little-known, New Jersey-based real estate investor, is negotiating with about 60 area developers and builders to buy 1,500 homes and condos at a 30 percent discount to their current list prices.

If Long, who has never done anything of this magnitude before, is successful in lining up the $700 million needed to pull off the deal -- a very big if -- it could have market-shaking consequences.

For struggling developers and builders, Long's proposal would relieve them of the financial burden of holding properties in a difficult market.

For banks, Long's deal would help them avoid repossessing properties and filling their balance sheets with unwanted, non-performing assets.

In turn, about 5 percent of the unsold inventory in Sarasota and Manatee counties would be temporarily lifted from the market.

The deal might also encourage other vulture investors, which could speed a real estate market recovery.

Long, who is listed as a principal at Oradell, N.J.-based General Property US, has been successful in signing up some builders and developers. But he is still working to convince hedge funds and private equity funds to back his proposal, according to an Aug. 28 e-mail message.

"The project is moving on well now," wrote Lindsay Bucknell, Long's local real estate agent at Century21 Sorrento Realty. "Nearly all the contracts are out and even more important, many are back in and all signed up."

Bucknell, who did not return a phone call, added that the project involves $1 billion worth of property that Long intends to buy for about $700 million.

"Joe is working hard preparing for his presentations over the next 10 days on the financing side," Bucknell wrote.

But the fact that Long does not have financing lined up does not sit well with real estate market analysts.

"I'm extremely skeptical about a guy with no track record who doesn't have financing in place," said George Huhn, a Venice real estate agent and foreclosure specialist. "If he thinks he's going to get money from a hedge fund, I've got news for him: The liquidity out there is zero. The mortgage crisis has taken all the liquidity out of the market, and no one is sure what is going to happen."

Huhn added that the smart money -- the real vulture money -- is waiting for banks to seize properties from developers and builders.

"They don't want to buy property for 70 cents on the dollar," Huhn said. "They want to buy for 25 to 30 cents on the dollar. They really want to feed on the dead carcass," Huhn said.

Long is fully aware of the challenges in front of him and of the "standard, out-of-box real estate methodology" of buying distressed properties from banks.

Though he would not answer questions about the builders and developers he is negotiating with, he acknowledged that if the real estate market continues its downward slide, he will pull out of negotiations and head back to New Jersey.

But the idea at the moment, Long said, is to get a jump on all the other investors who are sitting on the sidelines and waiting for the right moment to buy excess inventory in Florida.

The idea is to get in before the Florida Legislature fully takes on the state's tax and insurance problems and before the federal government intervenes to keep banks from being swamped by foreclosures.

There is no question governments are going to act, Long said.

"They are commercial enterprises," Long said. "If there are no transactions, there are no tax revenues. They are not going to let an insidious problem like a housing depression persist. If no one buys homes, then no one decorates homes. That means an awful lot of unsold refrigerators, furniture, flooring and lightbulbs."

Long said he decided to pursue the idea of making a bulk purchase of Southwest Florida real estate after spending New Year's Eve in Sarasota.

"I knew this opportunity would not last long," he said. "I know there are other guys out there."

Talk to any serious financial player in the Southwest Florida market and they will say the same thing.

"For the past two years, I have been contacted by investment asset groups and hedge finds, which all have war chests in the millions to hundreds of millions to over a billion dollars," said Jack McCabe, a Deerfield Beach-based real estate consultant. "They plan on purchasing distressed properties in Florida and other bubble markets around the country."

Gordon Hester, a principal at Siesta Key's US Funding Group, said these investors have already been poking around in Southwest Florida.

"I don't want to mention any names, but I have met with two hedge funds, one with more than $30 billion in assets, that are looking at investing in Sarasota real estate," Hester said. "They are open to all kinds of options, but at the end of the day, they like the Sarasota market."

The question on all their minds, Hester added, is when to descend.

"They obviously want to get the discounts as big as possible," he said. "Personally, I would rather wait and deal with the banks than the developers. Any time you deal with a seller prior to their losing the property, the negotiations become more difficult."

Builders and developers, however, do not want to go through the painful foreclosure process -- especially because even foreclosed properties can be subject to hefty Internal Revenue Service bills because forgiven or written-down loans are considered income.

Bradenton-based Kendar Homes is among the builders hoping to avoid losing properties. Over the past few months, subcontractors and vendors have filed liens against the company because of unpaid bills.

As a result, Kendar has signed a contract with Long to sell $8.257 million worth of inventory.

Reached on his cell phone, Darrell Reha, Kendar's president, acknowledged the contract but said he could not talk about the deal at that moment. He did not answer later phone calls.

Several other builders said they had not been contacted by Long, but they are rooting for him.

"For some builders in dire straits, this guy is a godsend," said Nick Bonsky, of Majestic Homes in North Port. "It's also good for the market. The more inventory gets reduced, the quicker the recovery."

In a letter sent to prospective participants, Long indicates that he intends to raise enough money to pay for carrying charges -- such as taxes, insurance and condo fees -- during the inventory period.

"In as much as this period may be as long as two years and possibly more, the undertaking of this venture poses a substantial risk to the investor," the letter states. "The discounted value we are offering attempts to ameliorate that risk while offering fair market value to the seller."

A discount of 30 percent is the going rate at the moment, Long said. But that may change if the real estate market deteriorates further.

Long's risk is that he might be getting in too early in the cycle.

"Many will jump in too soon and get hit by the descending knife,"McCabe said.

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