Opportunities in a Bi-polar Market
Today’s real estate market is the most fragmented I have seen in more than two decades of experience. On a national level, industry surveys point to pockets of economic rebound and strength, offset by areas where the recovery just isn’t taking hold.
The same could be said of our local Atlanta real estate market – which has its own pockets of strength and pockets that are still locked in a difficult environment. In some neighborhoods we have huge inventories of developed land – just sitting there as the builders and banks suffer. Buyers are scarce and there are plenty of existing homes for sale.
But in more desirable areas of the city, we have a booming recovery. Builders are stepping up to the plate, buying land and selling homes. Profit margins are increasing and attractive mortgage rates continue to propel the activity.
This bi-polar environment carries both risk and tremendous opportunity. Pick up a development in a stale are of town and you could be sitting on it with no buyers for a number of very long years. But invest in a thriving area with existing projects underway and the returns can be phenomenal.
Why the Banks Are Selling Their Very Best Inventory
If you’ve been reading my notes for the past several months, you know that many of the local regional banks are under pressure. These institutions originally made loans to developers and builders who bought real estate at the top of the market. As the economy contracted, these developers went belly up and the banks had to take possession of the properties.
In some cases the banks themselves became insolvent and were taken over by the FDIC. In this scenario, it’s now the government agency that is sitting on acres of property that it wants to get OFF its balance sheet!
Because these institutions are so anxious to repair their financial position, they are willing to sell their most valuable assets at attractive prices. Why would they sell the BEST stuff first? Well think about it… In today’s market, the best stuff is the ONLY stuff that can actually be sold. If a property is less than ideal, it doesn’t matter what the price is. There simply is no interest out there.
So regional banks and the FDIC are in a tight place. They have no options for the poor properties on their balance sheets and they need cash to cover their risk. And that puts Ashford Capital and our investors in the enviable position of buying the highest quality at the most attractive prices.
Within a few calendar quarters, I expect to turn around and sell these attractive properties at a substantial profit.
New Opportunities Under Contract
Ashford Capital has been busy so far this year, spending time assessing individual properties, and haggling at the negotiating table for the best deals. We currently have a number of specific assets that are available to investors for a very limited time.
As available investment slots are filled, we will continue to look for new and attractive properties to add to our portfolio. But I should warn you that I’m not willing to compromise quality for the sake of “just getting a deal done.”
Today’s purchases should generate some of the most profitable returns we have seen in years. But since I am only looking at high-growth, niche areas of Atlanta, there is limited capacity for new investors to get involved. Once the banks and the FDIC have liquidated the most attractive developments, it may take a number of months – or even years – until we see these kinds of opportunities again. I want to make sure that you have the opportunity to invest before this key time period comes to an end.
Could I take a 30 minute window of your time to show you some of the specific properties we are involved with? I think you will appreciate the due-diligence that we put into each deal and will agree that Ashford Capital offers some of the best returns for your investment portfolio or IRA account.
Please give me a call this week. I don’t want to see these deals pass you by without giving you the opportunity to look at the details carefully.
Wishing you every success,
Matt