Seeing Renewed Interest From Builders
Spring is always an interesting time for the real estate market. As families approach the end of the school year, they are more interested in pursuing career opportunities or upgrading into a better home. Spring is also a much easier time of year for homebuilders to break ground on new developments.
After several years of muted action, 2012 is shaping up to be a banner year for real estate developers. The broad economy has been slowly improving, the overhead supply of housing (and raw land) has declined to more reasonable levels, and the best communities with strong job growth are experiencing strong demand for residential land.
The activity is particularly strong in the metro Atlanta area as builders begin to layout out their plans for this year. Over the past two weeks, our phones have been ringing off the hook with a large number of brokers and builders coming out of the woodwork.
The brokers are typically working for small developers who are interested in securing parcels for their spring building projects, and the larger builders are contacting us directly to lay the groundwork for purchase discussions.
Based on my conversations with these representatives, it is clear that the builders’ acquisition departments have told the buyers to put it into HIGH gear. After surviving through years of stale demand, these companies have to take advantage of the new dynamic. If they don’t have houses to sell to consumers this year, they bear the risk of missing out on a tremendous rebound.
Negotiating From a Position of Strength
I have to tell you that I’m thoroughly enjoying the bidding process we are entering right now. Ashford Capital – along with our investment partners – hold a number of tremendous parcels of land that are very attractive to these builders.
Not only are our developments in areas that represent high demand for housing, but most of our properties already have significant infrastructure investments in place. Ashford Capital didn’t have to pay to put the roads, sewer, electricity and zoning in place. For the most part, these services were taken care of well before we bought the properties.
Instead, we were able to take advantage of a once-in-a-lifetime opportunity to pick up these lots from banks and the FDIC at literally pennies on the dollar.
Now, as builders come to us with interest in the properties, we can negotiate a price that represents a significant profit to our investors, while still offering a compelling value to the builders.
It has always been my belief that both sides of any business transaction should walk away from the table feeling like they got a good deal out of the situation. Considering the low purchase prices on our properties, we can offer the builder a very reasonable price – which allows these properties to move quickly (ahead of other properties we are competing with).
Of course, we will always sell these properties at prices that give our investors the best possible return on their capital – in the most expedient manner possible. I’m looking forward to seeing how these negotiations progress over the next few weeks and months.
New Value For Your 2012 Investment Plan
If you’re interested in learning how Ashford Capital generates returns for investors, I would welcome the chance to meet with you.
Our investment options are typically structured with the investor receiving a preferred rate of return along with a profit sharing agreement once a property is sold.
This approach allows investors to generate a healthy return, while incentivizing us to market and distribute each property to a developer or builder as quickly and profitably as possible.
We are able to set up investments for IRAs, retirement programs, as well as traditional investment accounts, and I am able to partner with investment advisors and brokers so that your real estate investment complements your existing arrangement with more traditional investment programs.
Please give me a call at your convenience. I’m looking forward to discussing your financial future and determining how we can partner with you to grow your investment wealth.
Wishing you every success,
Matt
Matthew J. Riedemann
Founder, President, & Managing Director
Ashford Capital Partners
678-231-4579
[email protected]