Andrew Duncan,
Tampa Bay's #1 Realtor and
Real Estate expert with Arnie Diaz from
Waterstone Mortgage and Joellyn Robles from
Hillsborough Title about the re-emergence of hedge funds in Tampa Bay both buying and selling homes. They discuss the impact and potential impact on Tampa Bay's housing market in 2015 on
The Duncan Duo Real Estate Show on 970 WFLA - Tampa Bay.
Hedge funds had a prevalent impact on the Tampa Bay market from 2013 and 2014. These are groups out of Wallstreet most of which are now publicly traded. They are once again
buying homes in Tampa Bay and some are even starting to
sell homes. An interesting thing about it is that it fueled the Tampa Bay market. There were a lot of positive about it like they bought a lot of homes, created a lot of jobs, even helped the prices go up.
Andrew mentioned in a previous show that everyone whose home grew into the 200-300k price range need to thank the Hedge funds because their equity gain.
Joellyn from Hillsborough Title work with a lot of institutional investors. Andrew said these institutions seem like they are not going to buy in the surge they did back a few years ago but nonetheless are starting to buy homes in Tampa Bay again. She shares that they are consistently getting orders about 10-20 at a time all closing cash within 15 days or so.
One of the things The Duncan Duo offer is the immediate buy out program where they can have investors, including themselves, buy the home immediately. If you want to know more about the program go to www.webuytamparealestate.com.
As pointed out by Joellyn, these hedge funds buy cash. They like a certain product. They tend to like a relatively newer home with a 3 bedrooms, 2 baths with a garage. Generally they like it to rent and make at least a 10% cap. They like turnkey but doesn't need to be massively updated. They tend to buy within the $100,000-300,000 range. So if you live in one of those neighborhoods, you can expect for them to potentially buy or maybe have some interest. It may be very advantageous if you're a seller but if you're a buyer, one of the downsides is you may have to compete with them.
A lot of people have the misconception that these hedge funds are coming in and low balling the houses but it's not necessarily what they do. They usually come in with strong fair market value offers. Joelle agrees and the appreciation in the market in general has helped bring their offers up. They are not necessarily stealing the property but are making the numbers work in terms of what their margins. Another important note is that since the rent value has risen, they have jumped back in.
Andrew gets to meet agents who work with Hedge funds all over the country. One thing he learned is that the Hedge funds have pulled out from a lot of markets. But they are still pretty active in Tampa Bay because of how much potential they see in our market and how much our market has made them already. Because they are still seen to be a force in the Tampa Bay market and they have experts who analyze the market and if they pay millions of dollars to expect Tampa's home values to continue to rise, it is seen as a good sign for the market.
Arnie Diaz from Waterstone Mortgage also agrees to Andrew's comment that it's a good sign for people who are looking to refinance but are short in equity. Since the Hedge funds force home values to rise up, it gives people which in turn will free up more people from equity to be able to refinance. Before, Hedge funds bought properties at a lower price but since they are now starting to sell, this in turn increases the value of your home if you're from the same area.
They also talk about how Hedge funds don't have the tendency to oversaturate the market by dumping a lot of their inventory at the same time like banks do with forclosed properties. Unlike the banks, Hedge funds are generating cash from these properties because most of their homes are rented out.
In 2013, 25% of Andrew's business were generated by working with Hedge funds whether helping them buy or sell at that time. Though it was a big part of their business a couple of years ago, Andrew's team is still focused on their core clients which are the normal buyers and sellers. The Hedge funds are really a solution for their home sellers who don't want to go through the hassle of selling their home.
For more Tampa Bay Real Estate news and advice, tune in to The Duncan Duo Real Estate Show on 970 WFLA - Tampa Bay every Sundays at 10 am.
