Ken Major climbs the steps of a county courthouse in a San Francisco suburb with $500,000 in cashier’s checks in one hand and a list of addresses in the other. Major is a buyer for Waypoint Real Estate Group LLC, an Oakland-based investment firm that’s scooping up foreclosed homes in California.
On this December afternoon, he joins a dozen house flippers as an auctioneer starts hawking the latest batch of defaulted properties to hit the market. Major bids on a three-bedroom house in Antioch, and after other buyers counter, he wins at $147,600.
March 13 (Bloomberg) — Colin Wiel, co-founder of Waypoint Real Estate Group LLC, talks about the rental market for single-family homes in California and technology that allows Waypoint to manage home rentals in a similar way to multi-family apartment units. He spoke on Feb. 9 in San Francisco. This topic will be in the April issue of Bloomberg Markets magazine. (Source: Bloomberg)
“We got it,” he mutters into a mobile-phone mic dangling from his ear. The house was valued at more than $400,000 in 2006, Bloomberg Markets magazine reports in its April issue.
Waypoint, a private-equity real-estate fund with $150 million in assets, is pioneering a new approach to making money from the housing crash. Since 2007, investors have been trolling the cratered suburbs stretching from California to Florida (SPCSMIA) for cheap houses to flip. And firms such as PennyMac Mortgage Investment Trust have sought value in subprime-mortgage-backed securities.
Waypoint, which owns 1,100 houses and is buying five more a day, is betting that converting foreclosures into rentals is a better way to make a profit. Other firms, such as Landsmith LP in San Francisco, are now cropping up and pursuing the same strategy in Arizona, California and Nevada.
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There has never been a better time to buy foreclosures. Prices are dirt cheap; interest rates are unbelievably low, and the economy is starting to pick up. This is the time that future real estate kings will be made.