Thursday, August 21, 2014

California property flipper moves into Southwest Florida

California property flipper moves into Southwest Florida

Published: Thursday, August 21, 2014 at 12:32 p.m.
Last Modified: Thursday, August 21, 2014 at 12:32 p.m.
MANATEE COUNTY - One of California's largest real estate flippers is expanding into Southwest Florida, a sign the region's housing market continues to be attractive to corporate investors hunting for bargains.
The move marks a vast shift from just two years ago, when institutional investors like Wall Street's Blackstone Group and Colony Capital acquired hundreds of properties at low prices and converted them into rentals.
By contrast, Blue Mountain Realty has acquired distressed properties at a discount, provided mainly cosmetic facelifts and then quickly resold the houses for big profits.
The firm, which also builds new custom homes, has flipped thousands of properties in California.
Its Southwest Florida push comes as local home prices have rebounded by more than one-third since the downturn, with supply at its thinnest point in nearly a decade.
But analysts say that the market frenzy has created dangerous conditions for flippers who are betting on making substantial profits with little investment and time.
“There are still opportunities in certain price ranges,” said Jack McCabe, a Florida real estate consultant. “The lower-priced homes have been dominated by institutional investors and hedge funds, but they haven't been too active in the upper ranges because prices have been pushed up pretty high.
“They must see something because they're making handsome profits.”
Blue Mountain officials declined to comment when reached late Wednesday.
A Blue Mountain subsidiary has purchased at least seven homes between Sarasota and Manatee counties, records show, spending more than $2 million.

The transactions ranged from a $15,200 Bank of America foreclosure to a $553,000 Bird Key estate, records show.
Since then, the company has sold three local houses, grossing $315,000. That profit figure includes a Siesta Key foreclosure it sold for $69,000 more than it paid just a month earlier.
Blue Mountain has tried to sell some of the properties through a public auction, which Realtors say is unusual for these types of sales. Area agents also say the company's offered commission structure is below market.
And the company isn't alone in its quest to make substantial profits from flipping properties in the area, of course.
This month, prolific real estate flipper Karl Helbig nearly doubled his money on a Holmes Beach condominium that he had owned for less than a week, records show.
A Helbig affiliate bought the 1,092-square-foot unit for $325,100, and then resold it for $650,000.
The former owner, who acquired the 5608 Gulf Drive condo in December 2004, paid $825,000.
But Blue Mountain's emergence here also comes as rising home prices has impacted potential profits for flippers.
“Flipping has quieted down a lot,” said Shannon Moore, broker and owner of Green Lion Realty, which works with flippers in North Port and Port Charlotte.
“Right now, the banks aren't giving them away. It's easy to find buyers, but finding properties to flip can be pretty hard, and when you're dealing with more expensive homes, you're taking a much bigger risk.”

Investors flipped 152 properties in the Sarasota-Bradenton-North Port market in the first three months of the year. That was down a modest 1.6 percent from the fourth quarter of 2013, but it was also nearly 9 percent above levels from one year ago, according to data provider RealtyTrac Inc. Most recently, Blue Mountain acquired a Panther Ridge property containing two homes out of foreclosure for $509,250, official property records show.
The homes, at 20109 74th Ave. East, were seized by U.S. Bank National Association in March after the previous owner defaulted on his mortgage.
Former owner John Suker bought the 4.9-acre property in September 2005 for $925,000, using a $675,000 loan from Bank of America. He took out a second $675,000 mortgage 11 months later. A foreclosure notice was filed in October 2011, records show.
Built in 1999, one 3,419-square-foot home has three bedrooms and four full bathrooms. A second residence contains one bedroom and one bathroom.
“What we're constantly on the hunt for is where are the opportunities?” Rick Revetria, Blue Mountain's vice president of operations, told the Press-Democrat in California.

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