The Vultures are Circling

NEW -> Contingent Buyer Assistance Program
S

skeptic_IHB

New member
Interesting Bloomberg article today on vulture investors. http://www.bloomberg.com/apps/news?pid=20601109&sid=aKTFOoHM.Jww&refer=home (Lennar's New Homes Fetch 60% Less as U.S. Market Slump Deepens).

The article suggests that the Lennar/Morgan Stanley deal 'set the market' at 40 cents on the dollar. Won't these communities pull down comps significantly because the vulture investors could reduce prices by 40% and still make a profit? Or will the vulture investors be sitting on these homes/lots for a while?

Thoughts?
 
The vulture investors are buying land (raw land & buildable lots) and condos.

With the land, the investors will wait until the market come back & sell the land back to the builders for a profit. AKA "land banking".

With the condos, they will rent them out because the condos will be cash-flow-positive-rentals at those prices. The "40 cents on the dollar" discount is from the "market peak", not from "current market price". I doubt that these investors will flip the condos right away.
 
vultures.jpg
 
You must log in or register to reply here.
Back
Top