Pascoe, like other investors buying discounted blocks of unsold condos from developers, is discovering that cut-rate prices alone aren't enough to sell units in a distressed market. The key is financing.

Banks typically won't fund purchases in buildings that have a large percentage of unsold units, and they shy away from properties where a single investor owns more than 10% of the condos. Lenders consider those deals too risky and fear they won't be able to sell those loans in the secondary market. Most sales that do get done in risky buildings are cash deals.

With financing scarce, Pascoe could have a hard time reaching his goal of selling out his units in two years, a time line that is "too optimistic," according to veteran real estate broker Rosendo Caveiro of Cushman & Wakefield.

"Who knows? That property may not be financeable," says Caveiro. If buyers can't get mortgages, "he will be holding onto those units for a long time. Even if you sell them at a deep discount, it is very difficult to sell. It is a tough market."

Pascoe paid nearly $4 million in cash for units at a February foreclosure auction, or $75 per square foot. He's asking about $130 per square foot, well under the $320 per square foot price some Altos de Miami units sold for in 2007 at the height of the housing boom. His asking price is also well below the 2004 pre-construction price of $180 a square foot.

A decade ago, he began investing in properties in Little Havana, where he now owns a vacant lot, a small apartment building and a strip mall anchored by a bakery that is near Altos de Miami. The 16-story building rises over a low-rise neighborhood built in the 1940s. With its glass balconies, triangle-shaped Altos de Miami looks like it has been transplanted from South Beach.

Pascoe saw Miguel Angel Barbagallo, president of B Developments in Miami, build the project and struggle to sell 78 of the units before the housing market crashed in 2007. Barbagallo owed Lehman Bros. more than $12 million in construction financing, and in November 2008, Lehman won a foreclosure lawsuit against the developer.

Pascoe bought the units at a Feb. 13 foreclosure auction with a bid of nearly $4 million. Now, he is seeking $71,900 for studios to $299,000 for a penthouse.While waiting for buyers to come, Pascoe is renting out some of the units. He needs to rent 20 to raise enough money to cover the condo dues of about $25,000 a month, he says. So far, he has 15 tenants.