Have you ever watched a real estate foreclosure auction? If you have attended a public real estate auction at the County you probably noticed a few (in Los Angeles) buyers with headsets walking between the 'criers' tracking several properties. They seem comfortable with both the process and the people involved - a true 'regular' comfortable in their surroundings.
Yesterday, I visited my second real estate auction company in Los Angeles. I was granted an in-depth look into a highly successful real estate investment company who specializes in ONLY foreclosure auction acquisitions. They have been doing the same 'drill' for over twenty-seven (27) years in Los Angeles County. They spend over a million dollars a day investing in auction properties in just Los Angeles County (tracking over 1,500 residential properties per day). In the current market they typically buy in excess of 80 auction properties (residential and commercial) a month.
I was invited into the 'inner-circle' by an executive of a large nation-wide Title Company. They are encouraging me to establish an investor network in the Long Beach and South Bay areas of Los Angeles County. The goal is to match investors with auction properties that are being purchased between 62-65 cents on the dollar (discounted up to 38% of current market values). After completing my due diligence and considering my background in foreclosures, investor acquisitions and REOs; I am impressed with their experience, systematic approach and detailed due diligence. They have built an incredible machine that involves over 200 employees tracking auction sales in four locations within Ventura and Los Angeles counties.
What is the opportunity for investors? Well we are initially assembling three investor partnerships (LLCs) with the goal to raise an initial million dollars over the next sixty days. This initial fund will invest in three residential properties in the Long Beach area with the goal to 'turn-over' this capital three times during the first year. The estimated proforma projects a net profit between $50,000 - $70,000 per property per investment cycle. We are looking to acquire the properties, resolve the tenant issues, rehab the properties, market and sell the properties within 130 days from recordation of the trustee's deed.
Is it a good deal ... well that depends upon your individual investment criteria and your risk temperament. We believe that partnering with this auction investment company significantly reduces our investment risk. The golden rule is that you lock in your profits on the acquisition; consequently, partnering with the right acquisition model and organization will greatly reduce our initial risk. They have the manpower, expertise, experience and systems in place to eliminate lots of the front-end risk (not all for sure). Next we plan on controlling the tenant negotiations, remodel and sales of the properties in-house. We have the construction crews, management, lending, escrow, transaction coordination, accounting, marketing and sales pieces in-house fully operational. Our brokerage company has over 230 licensed agents who specialize in the local Long Beach area. So can we eliminate all the risk - absolutely not; however, we like our plan! Does this represent a real good opportunity - I think so.
So if you are interested in hearing more about this incredible opportunity ... contact me at jim@peys.net. For additional information and insights into this and other real estate opportunities visit us at: www.coastalcommunityhomes.com. Otherwise, if I can be of service to you or your friends just let me know. Thanks. Jim Peys
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