BARGAIN HUNTING ON STEROIDS - Sluggish Chicago Housing Market Attracts New Mega-Investors!
LOCAL INVESTORS SEEK BULK SALES TO BUILD REAL ESTATE PORTFOLIO! NATIONAL BUILDER WANTS TO CLEAR INVENTORY!
Buying distressed properties for investment is nothing new! For years, those with adequate funding sought distressed homes, estate sales, and those whose owners have not paid their real estate taxes.
But now, here in Chicago and in markets where average home prices have taken an even bigger beating, investors are joining with others, then pooling vast sums of capital to invest in larger quantities of property in distress. Many of these homes are purchased in short sale, where the owners owe more on their mortgage balance than the home is presently worth. Others have already completed the foreclosure process, and have already reverted ownership to the lender who held the mortgage. In virtually every instance, these homes and properties can be purchased at deep discounts
In a story in last Friday's Chicago Tribune by Real Estate Writer Mary Ellen Podmolik, she quotes National Association of Realtors Statistics that show homes pending sale (under contract) rose 6.3% across the U.S. in December. The primary reason, experts surmise - many home prices are falling too low to resist!
National home builder Ryland Homes recently announced a joint venture with an investment firm to sell a portion of its unsold portfolio of new homes and as-yet-unbuilt vacant lots.
Here in Chicago, one local developer has begun investing in what he calls "transitional neighborhoods" - those that are not yet trendy, but have the potential to become trendy and desirable as the Chicago Real Estate Market begins to turn around.
Developer and Architect Michal Silver pooled his funds with over two dozen investors to gather roughly $7 Million to purchase distressed housing and hold the units for rent until the market begins to rebound. So far, Silver and his company, Silver's In/Site Investment Group LLC, has invested in the middle class Chicago Neighborhoods of Bronzeville, Logan Square, and Albany Park. He plans to expand his efforts into other City of Chicago Neighborhoods as well, and hopes to raise as much as an additional $13 Million and develop as many as 200 more housing units in modest neighborhoods across the city.
Silver sees a neighborhood stabilizing effect from the efforts of his company and similar investment companies. He sees a win-win for both investors and community residents. Patient investors generate a likely mid-term return, and community residents see fewer distressed, foreclosed, or boarded up homes in the neighborhoods where they live.
He also sees the possibility of nearby residents moving into newer, larger, more upgraded houses in their own neighborhoods as the real estate market here in Chicago improves.
DEAN MOSS & DEAN'S TEAM CHICAGO
