Spectacular Bargains & Desperate Builders
Investors and Colleagues,
June has been an exciting month at Ashford Capital. The Atlanta real estate market is undergoing a dramatic shift and we are active on the front lines.
Not only are we finding some incredibly attractive opportunities for us to put new capital to work, we are also in discussions with a number of residential builders who are desperate to build their inventory of properties.
Considering the wide economic swings in the broad economy, I have become accustomed to seeing one side of our business – or the other – experiencing tremendous activity. When times are difficult and unemployment is high, we are able to buy properties at exceptional values. When the expectations turn toward recovery, we are able to sell these properties and book significant profits.
But today, we’re actually experiencing the best of both worlds. I’ve been fielding phone calls from bankers and the FDIC – desperate to get rid of real estate on their balance sheets… And then sitting down at the negotiating table with residential builders who need new attractive properties to build.
Let me give you a couple of details…
Pennies On the Dollar??
To show you the kind of deals are possible in this environment, consider a deal we have in the hopper right now.
A few weeks ago, we became aware of a small distressed development on the market. Typically, we would not be interested in this type of investment. The size of the development was smaller than the properties we usually purchase. Considering the due diligence process, the closing costs, and administrative burden, we have found that our best opportunities are with larger properties.
But the seller appeared desperate and we knew we could get a good deal. I must admit, however, that even I am surprised at the price tag we walked away with.
To give you a bit of background, the development covers 20 lots, each of which is expected to hold a $200,000 single family home. What would you be willing to pay for a lot? $40k? Maybe 20k?
I’m proud to say that Ashford Capital is under contract for $46,000. Oh, and I should mention that we are paying $46,000 for the entire development! So our effective price for each lot is only $2,300! What a steal…
Getting in at such a low price gives us a lot of options. We could hold this investment for a couple of years and wait for a developer to pay $40,000 per lot – giving us more than a 800% return… Or we could offer the property for $20,000 per lot and move our inventory more quickly. The point is, when you take advantage of deals and pay less than ten cents on the dollar, your options are wide open in terms of selling that property for an incredible profit.
Flexibility For Investors
In addition to the tremendous profit opportunity, tracking down deals like this smaller development give us more options when it comes to the amount of capital we can work with.
Maybe you have been hesitant to invest with Ashford Capital because you expected to have to put up a lot of capital at once. It’s true that most of our investors put a material amount of capital to work when they participate in an opportunity.
But at this point we are able to accept smaller commitments from individual investors. This is good news for you because you can start out small and then reinvest your profits along the way as the size of your capital base grows.
Believe me, Ashford Capital will have a number of deals for us to pursue over the next few years, but you are unlikely to see the kinds of opportunities we have in play this summer. It’s a unique market and we are focused on finding the very best deals possible for our investors.
Would you be interested in looking at some of our offerings? I would love to show you what we are working on.
Please give me a call this week and we can schedule a time to meet. I think you will be excited to see how Ashford Capital can be your partner in growing your wealth and giving your family (or your clients) financial stability.
Wishing you every success,
Matt