Investors Are Active

by | Sep 17, 2013 | Flips, Market Buzz | 1 comment

Doomers have claimed that since rates went up, investors are fleeing the market.  Thankfully Alejandro of the latimes.com looked into it a bit deeper to find that there are plenty of investors, but it’s finding the deals that is the challenge – an excerpt:

Now the foreclosed homes in those markets are almost gone — yet investors have kept buying, competing with individual buyers in standard sales.

The number of so-called absentee buyers, usually cash investors, has dropped slightly in Southern California since hitting a record in January. But they still account for more than 1 in 4 home purchases in the region. And just 8% of those deals were on foreclosed homes in June, compared with 25% a year earlier and a peak of 55% in February 2009.

“Everybody and their dog is an investor,” said Dick Caley, a Long Beach real estate agent. “It has gotten to the point where I do not even return the call.”

As it turned out, housing investors needed neither the prodding of the Federal Reserve nor the bulk foreclosure sales from Fannie Mae, which never materialized beyond the pilot phase. The single-family rental industry now has several major players in multiple markets, with some recently created companies trading publicly.

The mix of investors and their strategies are shifting, with large financial firms starting to pull back and smaller players moving in, looking to buy, fix and flip homes for a quick profit. But rapid price increases are making it harder for people to afford a house and qualify for a home loan.

investors still buying

http://www.latimes.com/business/la-fi-housing-investors-20130913,0,6265193,full.story

North Leucadia

by | Sep 12, 2013 | Bubbleinfo TV, Builders, Flips, Leucadia | 4 comments

The two big Pardee tracts in Carmel Valley haven’t disrupted the resale market – instead, with deliveries being so far out, they have probably helped resales which have a more-immediate occupancy.

Leucadia might be different – Shea is building enough new mid-range homes that the resale market might feel it next year.

At this location off Vulcan, Shea is building 39 houses from 2,520sf to 3,041 sf (which hopefully should start under $1,000,000), and 30 townhouses from 1,276sf to 1,575sf.  They decided not to use my suggested Train Track Estates:

New Normal for Foreclosures

by | Aug 7, 2013 | Flips, Foreclosure Count, Foreclosures, Foreclosures/REOs, Jim's Take on the Market

Back in the old days there were 100-500 foreclosures per year in SD County:

Microsoft Word - A Brief History of Foreclosures

We’ve already had 1,504 properties get foreclosed in the first half of 2013, so historically we’re still at elevated levels.

But with the county averaging 3,000+ total sales per month, lenders will be able to sprinkle in a couple of hundred REOs each month without affecting values much.  In addition, flippers will keep doing their share; selling a similar amount of properties for retail-plus.

San Diego County Trustee-Sale Results

Lenders must be feeling comfortable at these levels, because the number of total notices were almost identical for the last two quarters. The Notices of Trustee Sale were down 52% Y-O-Y:

San Diego County Filings

Home-Flipping Huckster

by | Jul 18, 2013 | Flips | 7 comments

Have you thought about being a flipper, and paying to learn the craft?

Armando Montelongo Seminars offers long weekends of questionable advice, raucous showmanship and tours of foreclosed homes in some of America’s poorest sections. His secret formula: Go deeply into debt to buy distressed properties, fix them up minimally and sell them quickly. “People throw money at me to become multimillionaires,” Montelongo, a large, stocky guy with shoulder-length black hair, tells the crowd. “This is the means to your end.”

amNo guarantee that end will terminate in six zeroes. Montelongo, the onetime star of A&E’s Flip This House, offers scant proof the formula has turned his “students” into plutocrats. Asked to provide successful seminar alums, Montelongo serves up two–neither has made millions. Billy Godsey declines to detail his finances. Jake Leicht claims he’s made about $180,000 in 16 months buying 18 homes.

The one certain multimillionaire to emerge from Montelongo’s seminars? Montelongo himself.

His formula is simple: First, expose people to his system through a 90-minute free seminar. Then funnel them into a second (cost: $1,497 per couple) and, finally, a third: a three-day extravaganza like the one I attended that runs $40,000 for two.

Montelongo claims his San Antonio, Tex. company will rake in an estimated $100 million in revenue this year from 350,000 people attending one of 3,580 events. That’s up from 57,000 folks at 120 seminars, generating $12 million in sales in 2009, its first year of business. If Montelongo’s numbers are accurate, and his margins are typical for this kind of thing, then he will personally pocket $50 million this year (he owns 100% of the enterprise).

Read the full story here:

http://www.forbes.com/sites/abrambrown/2013/06/26/meet-armando-montelongo-the-home-flipping-huckster-wholl-make-50m-this-year/

Investors Slowing

by | Jun 12, 2013 | Flips, Market Conditions, Thinking of Buying?, Thinking of Selling? | 3 comments

bsNEW YORK — Blackstone Group LP, which has spent $5 billion to acquire almost 30,000 U.S. single-family houses, is nearing the later stages of its buying as home prices jump, said Jonathan Gray, the firm’s global head of real estate.

The market has become more “challenging” as competitors enter the business of buying homes to rent out, Gray said Monday.

Blackstone (NYSE: BX), based in New York, has acquired houses in 13 metropolitan areas and is continuing to make purchases, he said.

“For our type of capital and the returns we hope to generate, my guess is we’re in the later stages of this,” Gray said. “That does not mean the housing recovery itself will not continue for a number of years.”

Blackstone is the largest of the private-equity companies taking advantage of the foreclosure crisis to build portfolios of single-family homes to rent, helping to diminish supply and drive up real estate values in some areas.

U.S. home prices jumped 10.9 percent in March, the most in seven years, according to the S&P/Case-Shiller index of 20 cities.

Blackstone’s purchases represent a fraction of the U.S. housing market and rebounding prices are the result of basic supply and demand,

Gray said. U.S. population growth has outstripped homebuilding because property prices aren’t high enough to spur new construction, creating a shortage, he said.

“There are about 150 million homes in the United States,” Gray said. “We own about 29,000. In the last year, there were 5.6 million homes bought and sold. Of those, we were 24,000. We are a very small percentage.”

The housing recovery is “midstream,” with the eastern part of the U.S. representing good value, Gray said.

National prices are still down about 28 percent from the 2006 peak, according to the Case-Shiller index.

From sddt.com

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