Posted by Joe on March 21, 2006 at 23:02:48:
I love hearing first hand accounts of this kind of stuff. Thanks for taking the time to respond Ron!
Motivated Seller Lead for Anyone in Tennessee… - Posted by Ron Cormier
Posted by Ron Cormier on March 16, 2006 at 09:14:06:
Does anyone here invest in the Knoxville, TN area? A motivated couple wants to sell their house for what they owe, and posted on my company’s website. I can’t do anything with this, because I only buy homes in Lafayette and New Orleans, Louisiana at the moment. If anyone one wants the lead, let me know. I can post the lead here or you can email me privately at ron@nospam.elitesolutionsllc.com (Take out the no spam part).
Ron Cormier
N.O. & South LA…Post Katrina - Posted by Bill H
Posted by Bill H on March 16, 2006 at 20:27:44:
Ron:
Very good very informative post…exactly the same here in Gulfport, MS. The only difference is we suffered major damage…68,700 homes destroyed, 65,300 damaged…etc…still a BIG BIG mess…but we will survive.
Most of the speculators and out of staters do not understand that the new FEMA guidlines and state statues will effect their purchases…and…if the owners accept a FEMA grant prior to selling…it will be just like a covenant and run with the land…will be interesting to see what happens when they find out.
Very knowledgeable local real estate person said at our HOA meeting that the “Vultures” are moving in.
There is a state moratorium on foreclosure that says you can only foreclose through the courts for two years effective October 4th, 2005.
Good Luck,
Bill H
Re: Motivated Seller - Posted by Joe
Posted by Joe on March 16, 2006 at 13:52:29:
Ron, I’m curious, what is working in Laf. and N.O. like right now? Short sales, regular deals, so many deals you don’t know what to do, hard to find contractors, etc? Are you taking advantage of any government financing?
Re: N.O. & South LA…Post Katrina - Posted by Ron Cormier
Posted by Ron Cormier on March 17, 2006 at 22:52:22:
Bill,
Mississippi has been a lot smarter than Louisiana. You guys are going after your money, spending it, and make sure people don’t lose their houses easily. Our govt is playing around, holding money and not paying people on time. I just got back from one of those “Katrina Bus Tours”. Everything is far worse that I’ve seen driving around the area in my car. Some of these people are stuck between a rock and a hard place. No FEMA maps = no flood insurance, no businesses = no jobs. Yet, they still have to pay the mortgage until the govt buys them out (yeah right) or they lose it to auction. I drove down the entire Gulf Coast (except the Hwy 90 Biloxi bridge area) and saw how much worse you guys have it than we do. There’s nothing but slabs and debris pushed back away from the coast. What’s your strategy for investing your area?
Ron Cormier
New Orleans & South LA Post Katrina - LONG - Posted by Ron Cormier
Posted by Ron Cormier on March 16, 2006 at 14:40:27:
Joe,
To answer your questions, my type of real estate is very slow post-Katrina in New Orleans (short sales and flipping abandoned / junker properties). Most people outside of Louisiana think the sharks are here buying tons of property. Actually, most homeowners are holding on to their properties until they settle with insurance companies. They’re also waiting to see if the government is going to bail them out and reimburse them for their equity. Also, FHA and Fannie Mae have granted extensions to their foreclosure moratorium, so there are very few homes listed for auction RIGHT NOW. Finally, the new FEMA flood maps have not been published yet, so every good investor (and sharks too) should be nervous about buying tons of properties in areas that may not be insurable in the near future. Less than a handful of insurance companies are writing policies at the moment. Landlords will probably see very low vacancy in the next 18 months due to FEMA-paid apartments and contractors rebuilding in the area in need of housing.
New Orleans alone averaged about 70 houses per auction list every week pre-Katrina. The metro area averaged about 125 per week. In those days, my partner and I were juggling 20 plus short sales regularly. These days, it’s only 10 per week and 5 to 7 of the homes listed for auction are postponed. It?s a waiting game and I plan to be ready for it! I expect buying activity to increase exponentially after the FEMA flood maps are published, and the federal government tells these poor people they won?t help pay off their mortgages. Investors like us will be needed keep these homeowners from losing their homes to auction. They key will be a knowledge of the market and metro area, and tons of private money! There?s been a lack of true hard money lenders here in the past despite a huge need, but the ones who are here or decide to invest in New Orleans will make a killing on rehab loans.
To answer your other questions about New Orleans:
- Contractors are very difficult to find. Most are working on high-end homes or getting into the government contracting game. My company is doing the same as a side income until the foreclosures increase.
- I?m going to get all the government financing I can! Most business owners don?t take advantage of these opportunities or don?t know about them so it goes to suits who build $800 million office buildings in areas not affected by storms. (Look it up!)
Lafayette is about 2 hours away from New Orleans. It did not sustain any real damage from either Katrina or Rita. It’s a city that’s totally opposite of New Orleans demographically, and culturally. The real estate market is also very different. New Orleans BEFORE KATRINA was a city with many foreclosures and a city-maintained list of 30,000 abandoned properties to choose from. It was ripe for short sales and ugly houses to flip. Lafayette is a pretty house, lease-option type of city. Most homeowners and landlords in Lafayette have either owned their homes free and clear for years, or buy their homes and pay off the mortgage as soon as possible. It’s not a good city for flipping junker properties or locating short sales. You will go very hungry trying to do either. It’s primarily a new construction town, and is the only city in Louisiana over $100,000 people that does not have negative population growth in recent years. Lafayette has only averaged about 33 homes per month on its auction lists. These days, there are usually no sales or 2 at the most. There was a housing boom before Katrina and Rita, and now available housing is almost non-existent. I guess I would call Lafayette a developer’s paradise. There is plenty of land to build, high incomes, and growing population. One small community alone has 25 subdivisions going up simultaneously!
Lucky for me, I can invest in both areas!
Ron Cormier
Re: N.O. & South LA…Post Katrina - Posted by Bill H
Posted by Bill H on March 18, 2006 at 21:38:33:
Hi Ron:
Thanks for the TN lead, however it will not work for me…was sort of looking for a place to live in TN and that one just does not quite fit the bill…if anyone else is interested, I am out of this one.
As to investing here…not doing very much. Sitting on sidelines watching the “Vultures” and waiting…there is too much uncertainty right now for me to get too excited.
If I were into investing right now I would be trying to assemble plots to put in something after the dust settles…that is really a crap shoot right now in my opinion…zoning is changing, no flood maps, no real answers on insurance…may still have to deal with the mortgage holders, lots of things that I have gotten to old and to satisfied with my present position to get back into…I really watch out to see that the light at the end of the tunnel is NOT and oncoming train.
I buy heavily at the tax sales…really enjoy being able to work two maybe three weeks out of the year and travel and relax the rest of the time…plus although we sold our holdings in Montana and moved back down here (Lost my cotton-picking mind I think on that one) we are seriously considering buying up there again and move back for year round…at least no hurricanes…has been -49 where we used to hang out…but what the hay…I can put on enough to stay warm and the call it indecent exposure if I take off enough to stay cool.
Good Luck,
Bill H
PS: Besides that when was the last time they cancelled the fireworks on the 4th of July because of a snow storm in Gulfport? We did in Butte, MT…not too long ago.