International Vultures Flock To Florida Real Estate
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After all of the turmoil that real estate in Florida has gone through, you would expect there to be a few carcasses lying around. That is the rationale of a new breed of international investor coming into the state. They group together to form Vulture Funds.
With this horrid name some good comes out of it. Like the flying counterpart, the Vulture funds get the carcasses out of the market on the cheap. They have all the skills of their fowl friends, laser like vision and a directness of purpose all without any worry of what passerbys think.
But after a market carnage, this is what the market needs. Someone to start buying up all the inventory to allow the market to start functioning again. So while we never want a vulture in our backyard, they do provide a very useful service.
Florida far outpaced all other states in attracting foreign investment, with roughly 25 percent of all purchases made by international buyers done in the Sunshine State, according to a recent National Association of Realtors study.
Often grouped under the unsavory-sounding term “vulture funds,” opportunistic investment groups like those being courted by Florida Venture Partners already are being pursued by others in the state. Some are units of existing regional real estate firms, such as Prudential Palms Realty, Michael Saunders & Co. and Coldwell Banker Residential Real Estate.
Others, like Tannenbaum’s group, have formed in the last few years with a laser focus on a specific type of investor seeking to profit from real estate prices that — at least in terms of residential prices — today equate with the pre-boom year of 2003.
While the investors may differ in where they are from, or in what segment of the real estate market they are interested in, they all share a common thread: pay as little as possible now; sell for much, much more later.
A Bal Harbour-based company does little to hide its scavenger-like mission. It is in their name: Condo Vultures Realty. “Our best guesstimate is that 95 percent of the people who hear the term are disgusted,” owner Peter Zalewski said. “But the five percent of the people who hear the term and know what it means are the people who have the money today. Everything we do is legal and ethical.” via HeraldTribune.com
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Comment by Troy Patterson on 30 October 2008:
Hilarious name, but they are just what the market needs–buyers!
Comment by Property Qwest Blog - Real Estate News and Housing Data on 30 October 2008:
These investors will definitely be a big part of the foundation that helps to stabilize inventory levels by acquiring countless homes at great deals. Additionally, for “foreign” investors, there’s an added incentive since their currency goes much further in consideration of the battered dollar in recent history (Euro, British Pound, etc.).
Comment by Rachel on 30 October 2008:
Hi Tom,
Though people don’t like to think about the pecking order in the food chain, certain species, like the vulture, are a vital part of sustaining an environment. That said, Floridians will just have to get over the negative connotation of the ‘term’ vulture and try to see the big picture!
Thanks,
Rachel