Author Topic: Distressed Investors Are Already Buying Houston Homes for 40 Cents on the Dollar  (Read 1926 times)

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Offline thackney

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Distressed Investors Are Already Buying Houston Homes for 40 Cents on the Dollar
https://www.bloomberg.com/news/articles/2017-10-12/investors-head-to-houston-to-buy-from-panicked-homeowners
October 12, 2017

...Schild stops by a ranch-style house where 74-year-old Paul Matlock lives with his wife, disabled from multiple sclerosis. Matlock is desperate to leave and is considering Schild’s offer of $120,000—half the home’s value three weeks earlier. A half-dozen other investors have made offers, one as low as $55,000. “The whole thing makes me feel like there’s a bunch of vultures sitting on my back fence,” Matlock says. “They’re waiting for the dead body to fall over.”

It’s axiomatic on Wall Street that the time to buy is when fear overtakes greed—when blood (or, in this case, water) is in the streets. Now some are eyeing the billions of dollars in hurricane-ravaged property in Texas and Florida and deciding it may be the time to take out their checkbooks. Investors such as Schild figure they can buy low, either fix up and flip the houses or rent them out for several years, and unload them later, doubling their money or more.

Schild making Matlock an offer in his flooded house.PHOTOGRAPHER: PRASHANT GOPAL/BLOOMBERG
Those kinds of bets have often paid off. Buyers who snapped up co-ops and office towers when New York was near bankruptcy in the 1970s made a killing. More recently, companies including Blackstone Group LP and other marquee names bought foreclosed homes after the 2008 financial crisis and are sitting on billions in potential gains.

The cycle begins with small-time investors such as Schild, who’s bought more than 30 waterlogged houses for an average $175,000 apiece. Then Wall Street swoops in. Gary Beasley, former chief executive officer of Waypoint Homes, also sees an opportunity. He’s pitching private equity firms and pension funds on the potential profit in buying flooded homes, repairing them, and renting them back to homeowners....
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Offline Sanguine

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Just a wee bit of hyperventilation and demonization here.

Offline IsailedawayfromFR

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While I hope I might be wrong, my guess Houston will not be able to fully recover after Harvey.

After Katrina shocked New Orleans, a lot of individuals and businesses that did not have to be in New Orleans decided not to expose themselves to another future shock and simply left for other pastures.  Baton Rouge particularly.

There are lots of Houston businesses and people not connected to the oil industry that do not have to be in Houston, which has now been exposed, albeit under a 'Perfect Storm' scenario, of possessing potentially catastrophic weather conditions.  A lot of them could very well decide to take a 'safe' retreat to what they perceive as better environs.

My take is that both Austin and DFW area will be the beneficiaries if this scenario plays out.  If I were much of a real estate speculator, that's where I would be buying up property, not in Houston.
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Online Bigun

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While I hope I might be wrong, my guess Houston will not be able to fully recover after Harvey.

After Katrina shocked New Orleans, a lot of individuals and businesses that did not have to be in New Orleans decided not to expose themselves to another future shock and simply left for other pastures.  Baton Rouge particularly.

There are lots of Houston businesses and people not connected to the oil industry that do not have to be in Houston, which has now been exposed, albeit under a 'Perfect Storm' scenario, of possessing potentially catastrophic weather conditions.  A lot of them could very well decide to take a 'safe' retreat to what they perceive as better environs.

My take is that both Austin and DFW area will be the beneficiaries if this scenario plays out.  If I were much of a real estate speculator, that's where I would be buying up property, not in Houston.

And property values North of Houston in the corridor between Houston and Dallas are skyrocketing.
"I wish it need not have happened in my time," said Frodo.

"So do I," said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us."
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Offline IsailedawayfromFR

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And property values North of Houston in the corridor between Houston and Dallas are skyrocketing.
That's why, with the little I have to speculate with, I have purchased several properties in that corridor since I got back to Texas 12 years ago.

I thankfully was able to return to Texas then following a few years in California.  When I got back, I realized how cheap the property values were here in Texas.

The Houston/DFW corridor I reasoned is the expansion area as baby boomers like me began looking outside of Houston or Dallas for second homes, and eventually retirement homes to settle in outside of the two major metros and its suburbs.  Not too far, as we will need access to major airports for our leisure travel and unfortunately medical care.

Geographically speaking, my natural resources instinct tells me access to water will be critical in years to come, which makes areas near Austin poorer, and the eastern part of the state which has more abundant rainfall more desirable.

@Bigun
« Last Edit: October 14, 2017, 02:06:20 am by IsailedawayfromFR »
No punishment, in my opinion, is too great, for the man who can build his greatness upon his country's ruin~  George Washington

Online Elderberry

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While I hope I might be wrong, my guess Houston will not be able to fully recover after Harvey.

After Katrina shocked New Orleans, a lot of individuals and businesses that did not have to be in New Orleans decided not to expose themselves to another future shock and simply left for other pastures.  Baton Rouge particularly.

There are lots of Houston businesses and people not connected to the oil industry that do not have to be in Houston, which has now been exposed, albeit under a 'Perfect Storm' scenario, of possessing potentially catastrophic weather conditions.  A lot of them could very well decide to take a 'safe' retreat to what they perceive as better environs.

My take is that both Austin and DFW area will be the beneficiaries if this scenario plays out.  If I were much of a real estate speculator, that's where I would be buying up property, not in Houston.

I sure hope that a LOT of people think just like you and pack up and leave.

Offline dfwgator

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While I hope I might be wrong, my guess Houston will not be able to fully recover after Harvey.

After Katrina shocked New Orleans, a lot of individuals and businesses that did not have to be in New Orleans decided not to expose themselves to another future shock and simply left for other pastures.  Baton Rouge particularly.
 

That describes pretty much what happened to Galveston after the 1900 Hurricane,  had it not been for that storm,  Galveston may very well have been the big Texas city on the Gulf Coast, instead of Houston.

Online Elderberry

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That describes pretty much what happened to Galveston after the 1900 Hurricane,  had it not been for that storm,  Galveston may very well have been the big Texas city on the Gulf Coast, instead of Houston.

By the time the 1900 census count was taken, however, San Antonio, with 53,321 residents, Houston, with 44,633, and Dallas, with 42,638, had left Galveston, with 37,789, in the population dust. The transcontinental railroad lines and growing manufacturing sectors of the three larger Texas cities by-passed hurricane-vulnerable Galveston.

The citizens of Galveston did rebuild in the wake of this great hurricane, and in doing so, have been recognized in achieving a remarkable feat of civil engineering: the grade of the entire city was raised and a seawall was built to protect it. Within a decade, 500 city blocks had been raised by 0.3-3.3 m (1-11 ft) with sand dredged from Galveston’s ship channel. During the same period, a seawall spanning nearly 50 blocks was constructed, providing protection for the heart of Galveston. The seawall was tested in 1915 when a Category 3 hurricane battered the Texas coast with 193.2 km/h (120 mph) winds and a 4.9 m (16 ft) storm surge. Although the city sustained serious flooding and the wall was damaged, a repeat of the 1900 devastation was avoided.

Although Galveston was rebuilt, it never regained its previously prominent place in Texas’ history, mainly due to the emergence of Houston, several miles inland (connected to the Gulf by a canal).
Today Galveston's economy is driven by three paramount areas: tourism, attracting visitors to its beach and its historic districts; the port, which now ranks 7th in shipments among the 13 major Texas ports; and The University of Texas Medical Branch, which has been an important part of the city since 1891.


Online catfish1957

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You better sell Scarlett.......or your gonna be sorry.

I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Offline jpsb

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My take is that both Austin and DFW area will be the beneficiaries if this scenario plays out.  If I were much of a real estate speculator, that's where I would be buying up property, not in Houston.


http://www.youtube.com/watch?v=il6OkJav6MM

Online Elderberry

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Quote
https://houstonagentmagazine.com/2017/10/11/houston-housing-market-rebounds-post-harvey-hitting-september-high/

The single-family market in Houston grew in September along with home prices, reaching a new September record, according to the latest report from the Houston Association of Realtors (HAR).

Single-family home sales grew 4.2 percent in September compared to last year and jumped 24 percent after August’s drop off. Despite the impact of Hurricane Harvey on the city, home sales are still 2.3 percent ahead of 2016 on a year-to-date basis. HAR reports that all segments of the market saw gains in September except for homes priced below $150,000.

Housing inventory grew from a 3.9-months’ supply to a 4.1 months year-over year, but it is below the 4.4-months’ supply reported right before Harvey.

Home prices also grew in September, with the median price growing 5.5 percent to $232,000 and the average price growing 5.4 percent to $291,767. HAR reports that these are both record highs for September.

“I don’t think anyone expected to see home sales in positive territory this soon after a natural disaster of Harvey’s magnitude, but the September report speaks volumes about the incredible resiliency of the Houston real estate market,” said HAR Chair Cindy Hamann.

Online catfish1957

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Wish I had bought some stock in RV companies prior to Harvey.   They are all over the place around holding displaced flooded residents,
I display the Confederate Battle Flag in honor of my great great great grandfathers who spilled blood at Wilson's Creek and Shiloh.  5 others served in the WBTS with honor too.

Offline Sanguine

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Wish I had bought some stock in RV companies prior to Harvey.   They are all over the place around holding displaced flooded residents,

I thought about that too.  I have one I plan on selling early next year.  I had to think hard about maybe putting it on the market now.