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Right Time to Invest in Florida Foreclosures Market



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By : John Cutts    99 or more times read
Florida foreclosures in January 2009 reached 10,007 while pre-foreclosure filings were made on 43,070 distressed properties.

Florida Association of Realtors predicted that Florida foreclosures could increase by 100 percent in 2009 despite President Barack Obama’s foreclosure prevention plan. South Florida foreclosure rate is expected to jump between 50 percent and 100 percent in 2009 as pre-foreclosure filings in 2008 increased to 75,730 from 33,154 a year ago.

These figures prompted some real estate market experts to suggest that now is the right time for capitalists to venture into the Florida foreclosures market as prices of foreclosure properties continue their decline.

These experts suggest investing in Florida foreclosures provided that investors can purchase real estate or mortgage notes at wholesale prices for as low as 10 cents.

The best example for this kind of investment is the acquisition made by Glemont Capital managing principal Larry Kestin who purchased a package of mortgage paper and residential real estate in Vero Beach for 10 to 12 cents.

He purchased 45 homes, 138 developed properties and two land assemblies for nearly $8.8 million, reduced from a one hundred million valuation several years ago.

According to Kestin, he plans to dispose of the real estate portfolio by stages during the multi-year development and holding period. He will still triple his investments even if he decides to sell his portfolio to investors for 35 cents in 2011.

Kestin explained that his company had been scouting for best Florida deals in the foreclosure market for almost a year already until he found the right portfolio at Vero Beach.

Meanwhile, McCabe Research and Consulting investment expert Jack McCabe said that Kestin and his company, Glenmont’s strategies succeed because they had been patient, they did their home work and took the time to understand the risks involved in investing on the foreclosure market.

He pointed out that investors should also understand and be open to the possibility that long period holdings can fail.

He added that a so-called venture investor, who specializes in strategically located finished buildings handled by public home building companies, may acquire a portfolio worth $100 million for only $12 million in this time of foreclosure crisis.

However, he warned investors of possible risks involved in venturing into the Florida foreclosures market, including the possibility that retirees and foreign homebuyers may not find Florida an attractive place to stay.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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