Thanks to Realtytrac for this:
BARGAIN HUNTERS SEE BOTTOM
Ask a group of real estate millionaires how they made their money and most will recite some version of this axiom: “When everyone zigs, you zag.” In today’s downward real estate market the axiom simply translates into buying property when most others are not — and that’s exactly what Tommy Barone and his clients are doing.
Vultures Flock to Florida
Barone, a real estate agent with Condo Vultures Realty in Bal Harbour, Fla., said bargain hunters from around country and the world are flocking to Florida to buy condominiums that have suffered steep price declines amid the housing glut. He believes the South Florida condominium market — where about 23,000 condo units are currently for sale — has reached the bottom and is poised to take off soon. “Snowbirds from Canada, New York, Ohio and the Midwest already know the deals are here,” said Barone, who’s working with several foreclosure investors in condo deals in numerous South Florida developments. “We are starting to get calls, and the buyers are beginning to descend on South Florida.” Frank Marrero, one of Barone’s real estate investor clients from New Jersey, is among those swooping into distressed residential waters, responding to the deep price cuts in South Florida. Marrero, a foreclosure “bottom feeder,” has purchased 10 foreclosure properties in the last eight months — two in Miami and eight in Naples, Fla. Propelled by low-cost foreclosure sales and accelerating price drops, Marrero is snapping up deeply discounted properties in Florida’s hardest hit coastal communities. “I look for sellers that are bleeding,” said Marrero, a banker by trade who is buying and holding his newly purchased foreclosure properties. “Once I find them, then I wait until the owners start hemorrhaging red ink. That’s when I buy.” He said he looks for properties that have “value” and “good quality,” favoring bank-owned distressed properties. As a banker, Marrero knows how the lenders think, giving him an advantage at the negotiating table. “I team up with people like Tommy and look for good deals,” he said. “In January, for example, I bought a condo in downtown Miami. The seller wanted $400,000. They were bleeding, but they weren’t ready to discount. Many of these sellers are trying to recoup their deposit. So we waited. They started hemorrhaging money. Then we came in and bought it for $340,000 — a 15 percent discount.” Peter Zalewski, founder of Condo Vultures, said: “No one knows where the bottom of the market is, but we do know that sellers have shaved an average of 22 percent off their original pricing in coastal South Florida.” Prices have declined, but the housing market still has a ways to go before it begins to stabilize significantly, said Zalewski. Zalewski, Barone, Marrero and other real estate experts said that Florida is a microcosm of what’s happening nationwide, where once-hot real estate markets have suddenly cooled and bargain hunters are stalking the deals.