CNN Money Labels Glenn Plantone One of the New Vulture Investors? Oh Well, I’ve Been Called Worse

They say any publicity is good publicity, and I couldn’t agree more. So when CNNMoney.com featured me in an article titled “Vulture Investors: They're Back - And Making a Bundle” I was...well... pleased. If by vulture, they are implying that I am swooping in to find life and profit in properties that are regarded by many as dead and worthless, then I can live with that analogy. And they certainly are right about investors in this market being able to make a bundle. I believe we are currently living in the best real estate buying climate since the Great Depression...perhaps better.

So, it is with great pride, that I re-post excerpts from the CNNMoney.com article:

NEW YORK (CNNMoney.com) -- These are the glory days of the residential real estate investor. Low prices, rock-bottom interest rates and stable rental markets have created huge buying opportunities.

Although conditions are very favorable, investors have to be adaptable because the market is evolving rapidly... Foreclosure auctions are no longer a fertile hunting ground... Tanya Marchiol of Team Investments, which has operations in about 10 states but focuses mostly on the Phoenix market, says, “"Amateurs have come in and run up the prices. In 2009 I bought 76 properties at foreclosure auctions, at an average of about 60 cents on the market dollar. This year, I've bought four."

Glenn Plantone faces a similar situation in Las Vegas. A veteran real estate broker and investor, he has switched from buying mostly foreclosures and repossessions to short sales almost exclusively. That's because the inventory of distressed properties available in Vegas is way down, to about a two-week supply.

"The banks make better profits with short sales, so they're not foreclosing," Plantone said. "They've switched staff to processing short sales and they've gotten faster at processing them."
He tries to purchase properties for at least 10% less than what he considers to be true market value, then he does some light rehabilitation and sells them to some of the 3,000 buyers he works with.

Since prices have fallen about 70% in some Vegas communities and rents have only declined by about 20%, it's possible for his investors, who are cash buyers, to make money from the first month the homes are rented.

"We're getting cash flow (net return on investment) of 12% to 14%," he said.
He doesn't completely ignore potential profits from home price appreciation because he believes the town is bouncing around the bottom. (Homes already sell for below what it would cost to build new homes.) He does not, however, emphasize that aspect of the investment.
It's the income from rentals that's paramount right now.

The beauty of cash flow, of course, is that even if the prices decline another 10% or 20%, the investors should be able to live with that.

"I tell them to plan on holding for five years," he said. "With cash flow, there's no need to worry about price drops."

To receive more information please contact me.

Glenn Plantone
gsplantone@gmail.com
(702) 769-9872