July 22–MANATEE (Source: By Jennifer Rich, The Bradenton Herald, Fla.) – They have cash and they’re ready to invest.That’s what Realtors, mortgage lenders and investors say is sparking Manatee County’s real estate market right now.
Some investors like Van O’Quinn are putting their dollars into duplexes, which real estate agents and data indicate are scarce and getting scarcer.
O’Quinn, who owns 11 duplexes, closed on one Thursday in northwest Bradenton, his second this month. He hopes to make it three by the end of July.
“I pulled everything out of the stock market 10 years ago and started putting it in real estate,” he said. “I’m buying to hold.”
Debbie Roth, with Rose Bay Realty, has worked with O’Quinn on a few deals and says he is typical of the cash investor who wants to put their money in something they have more control over.
“Several investors I am working with don’t trust mutual funds to keep them retired,” she said. “This is an excellent market right now, they can get a good producing property. It is up to them and they’re not wondering what their return will be.”
O’Quinn, who worked 42 years for Publix Super Markets in meat operations, says his rentals generate about $14,000 a month for him.
“I ride around every day and if I see something, I call Debbie and have her check it out,” he said.
He’s particular about his requirements — a good residential neighborhood, solid tenants and the ability to drive value up.
O’Quinn bought Thursday’s two-bedroom, one-bath duplex on both sides for $73,500 within 1 1/2 weeks of its listing. He will put in central heat and air and privacy fencing to enhance its value.
Investment properties on the island are red hot, too.
Three out of four people who walk into Island Real Estate on Anna Maria Island ask about rental income, says agent Larry Chatt.
“We are seeing more cash investors.” Chatt said, buying everything from duplexes to condos and single-family homes.
The business’s second quarter numbers for April, May and June exceeded 116 transactions, which has only happened four to five times in the history of the company, Chatt said. The island only had 35 duplex properties for sale as of Thursday.
“The demand is high and the supply is low,” he said, estimating a 11-month inventory in island real estate. “It is quickly becoming hot like it was in 2005. There are a lot of cash investors, a lot of cash. Frankly there are many out there who perceive they’ve missed the bottom, which has buyers anxious.”
Chat thinks some people who could buy with cash instead are going for low-interest loans to give their money better leverage.
Roth, who specializes in duplexes, said she noticed the trend in buyers hunting for duplexes about five months ago.
“There was a bunch on the market before then, then all of a sudden there are not,” she said. “We’re even having bidding wars.”
In one recent transaction, there were seven bidders and even though the bidder Roth represented offered 40 percent more than the asking price, he still didn’t get it.
Data from the Manatee County Realtors Association show the median price for duplexes has gradually been increasing during the past year. The median was $50,000 in June 2010 and up to $86,750 in June 2011. There were 181 on the market in June 2011 and only 100 in June 2011.
“There is a lot of cash this year, a lot of cash,” said Russ Dozeman, mortgage loan officer with Regions Bank in Manatee. “Rental vacancy levels are very low and good occupancy levels tend to move prices up, so prices will probably increase next year.”
O’Quinn said he has no trouble renting his properties.
“I haven’t had a turnover in three years,” he said.
Both men think the high foreclosure rate is contributing to a higher number of renters — good news for landlords.
“There is more renting going on with people vacating their homes, and we are reaping the benefit of better renters,” O’Quinn said.
Cash investors will be needed in the future, Dozeman said, because he predicts there will be a lot of properties in poor condition coming up for sale.
“They’ve been sitting empty, they haven’t been taken care of and we’ll need cash investors to buy them, clean them up and rent them,” he said.
Source: By Jennifer Rich, The Bradenton Herald, Fla.
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Copyright (c) 2011, The Bradenton Herald, Fla.
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A service of YellowBrix, Inc. Publication date: 2011-07-22
