"The hesitancy to jump is that no one wants to jump into the shallow end of the pool," says Charles Foschini, vice chairman with CB Richard Ellis' capital markets group in Miami. "People want to jump in when they're certain they can buy at an absolute low point."

In April, Sky Development Inc. and SunVest Communities LLC joined forces to create SkyVest Real Estate Opportunity Fund, a $300-million fund to capitalize on opportunities presented by the recent economic downturn.

"We don't see a lot of transactions," says Yizhak Toledano, CEO of Sky Development in Aventura. "There is pressure on the market, and for now we still don't see attractive deals. We're targeting investment around August and September."

So far, most of the success with formed funds has been in buying bank notes from construction lenders, says Studnicky. Lenders don't want the burden of managing a property they're forced to inherit, and are definitely beneficiaries of opportunity funds, investors agree.

"In our case, our objective is to buy bulk units in various projects and rent the units long term, for two or three years," explains Studnicky. "That's going to take inventory out of the multi-listing service, which is already overburdened. In that regard, it will stabilize the market by reducing supply."

Toledano agrees, adding that the formation and buying activity of funds will not have a negative effect on a market that is almost at bottom already. "When all those condos switch hands, there's going to be demand for more inventory, and the more fresh capital coming to the market, the better it is for everybody," he says.

"The flip side involves people that have bought into projects where funds will make large bulk purchases [at significant discounts]," says Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach. "That's going to mean that they lose their down payment, and in many cases their units will be worth less than their mortgage amount."

Regardless of the possible negatives, Toledano says, "We're going to see a lot of acquisitions in the next six to seven months." However, McCabe warns that we might not actually see many acquisitions at all.

"There has been a lot of funds formed that are private, that the public and other funds aren't aware of. Most of these deals are going to be done discreetly, with as little public scrutiny as possible," he says.

"The jury is still out on a large number of the condo projects," Foschini adds. "If they perform well and those that have put up deposits close on units, there may not be many opportunities for the funds to buy."