Real estate value investors flock to Houston as the best time to buy is when there is ‘water’ in the streets
Because flood insurance is not very affordable for those living in coastal cities around the United States, quite often after hurricanes a lot of homes do not get rebuilt, re-modeled, or even worse, many homeowners end up going into foreclosure.
The elite have a saying that the best time to buy an asset is when there is ‘blood in the streets’, and modifying this axiom just a little bit, it appears that real estate value investors are flocking to Houston to see about purchasing land and homes at pennies on the dollar while there is still ‘water in the streets’.
As 1,000’s of families along the Texas shoreline continue to struggle with putting their lives back together following the apocalyptic landfall of Hurricane Harvey roughly 6 weeks ago, vulture investors are increasingly swooping in to exploit their misery with offers to buy flooded homes for cents on the dollar.Â AsÂ BloombergÂ points out this morning, one such investor is Bryan Schild who has sourced capital from local “hard-money lenders” to scoop up 30 flooded homes for as little as 40 cents on the dollar.
Bryan Schild drives through the byways of Houston looking for what could be the investment opportunity of a lifetime: homes selling for as little as 40Â˘ on the dollar.Â â€śWe Pay Cash For Flooded Homes $$$$$$$$ Donâ€™t fix it, sell it. Quick close,â€ťÂ read the signs piled in the back seat of his Ford pickup.
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 Schildâ€™s offer of $120,000â€”half the homeâ€™s value three weeks earlier. A half-dozen other investors have made offers, one as low as $55,000.Â â€śThe whole thing makes me feel like thereâ€™s a bunch of vultures sitting on my back fence,â€ťÂ Matlock says.Â â€śTheyâ€™re waiting for the dead body to fall over.â€ť
Itâ€™s axiomatic on Wall Street that the time to buy is when fear overtakes greedâ€”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. –Â Zerohedge
Combing for assets no matter how big or small is actually big business in the U.S., where America’s obsession with consumerism leaves a great deal of treasure from someone else’s perceived junk.Â In fact all you have to do is look at the number of reality television shows feature people dedicated full time to buying vacant storage lots, or who scan the obituary sections everyday looking for potential estate auctions following someone’s death.
No matter how high markets get, there are always value assets to buy which can garner someone a profit if they have the time and money.Â And sadly, can quite often mean a windfall for someone to the detriment of others, as there is a lot of money to be made when a crisis or tragedy strikes a community.
Kenneth Schortgen JrÂ isÂ a writer forÂ The Daily Economist,Â Secretsofthefed.com,Â Roguemoney.net, andÂ Viral Liberty, and hostsÂ the popularÂ youtube podcastÂ on Mondays, Wednesdays and Fridays.Â Ken can alsoÂ be heard Wednesday afternoons giving an weekly economic report on theÂ Angel Clark radio show.