Investment Real Estate Firm Making Waves in the West DFW Marketplace

     In January of 2012,  New Western Acquisition's West DFW branch revitalized it's team with an entire new group of associates and broker.  In the past 365 days, this team of talented partners has provided more opportunity to their community's investors than any other firm within the marketplace.  As they progressed throughout the year, each month proved to break the previous month's productivity.  Nearly 150 investors benefited in Tarrant and Denton Counties from the provisions offered by New Western Acquisition's sales team when they purchased inventory.
     Their plan was simple.  The intention was to provide accurate values and conservative estimates encompassed by large margins of profit for their clients.  The inventory sold was tailored with assistance in each step of the single family residential investment process.  They collaborated to provide a network of vendors, material providers, as well as talented and cost effective general contractors.   This team left no stone un-turned.  Through Sherman Bridge Lending, they offered leverage for their client's capital to more productively invest.  Countless hours were spent coaching and educating each investor on the best exit strategy for their investment goals.
     Now that they have built a solid foundation of fundamentals along with a vast network of local and national investors, the goal is obtainable yet again.  Double the previous 12 month's production.  As the acquisitions team becomes more and more seasoned, the amount of inventory available for the sales team increases.  Thanks to the investors that have been working with this sales team, the increase in inventory will undoubtedly be distributed to their growing pool of investor buyers.  And with an ROI averaging 178% (yes, 178%), why wouldn't anyone consider working with this firm?

J.D. Castillo

 J.D. Castillo has been with the firm since it's commencement in September of 2008 and is currently the manager of the dispostions/ sales department of the West DFW team.  However, his career accounts for 10 years of real estate experience.  J.D. is somewhat of a master when it comes building a sales team.  He has attributed to the Dallas office and even moved to Houston in 2010 to assist in the launch of New Western's Southeastern Texas region.  J.D. provides transparency in the details and makes his clients his number one priority.  Outside of his profession, he is an all around great guy and is engaged to be married in March of this year!


 He can be contacted by phone at 214 650 5493 or via email at JD.Castillo@NewWestern.com

The end of mom and pop investing? NOPE, it's just the beginning!!!

    Recently, there has been a widely discussed rumor going around about the "New Emerging Giant" that is going to buy every foreclosure in the U.S.  The webinar I watched, which happens to be the main conspirator of this topic, is also stating that the housing industry is going to be completely institutional and that owning real estate will be a thing of the past.  The rumor states that these institutions will buy directly from banks and the properties will never make it to the marketplace, ultimately leaving no distressed properties for investors to buy. I can assure you that the rumors are nothing short of a scare tactic used to create urgency towards purchasing real estate guru educational material.

     The argument is that large institutions, private equity firms, and REITs have been raising billions of dollars to purchase real estate due to double digit returns in a bearish stock market.  That speculation is factual and of complete merit.  Several corporations, including Warren Buffet's "Blackstone Group, LP" have purchased close to $1 billion in foreclosed homes. the amount of property purchased equals roughly 6500 properties.  Other private equity firms have been speculated to have raised somewhere between $6-$8 billion for the purpose of purchasing SFR foreclosures.  A quote from a recent article in The Wall Street Journal states "People involved in the market estimate that private-equity firms and other investors have raised $6 billion to $8 billion to invest in the sector, as they try to take advantage of prices that have fallen nationwide on average by more than a third. That could buy 40,000 to 80,000 properties, according to a recent report from Keefe Bruyette & Woods."

     A few months ago, I was approached by one of these institutional "GIANT" buyers.  I was given  specific criteria as to the types of homes that were of interest.  Primarily, they were looking for newer builds and wanting to buy at around 80% give or take.  The criteria became more and more precise and eventually our firm re-shifted our focus back to servicing the "mom and pop" investors.  Tried and true, the "mom and pop" investors have always been there and will always be here.  While the individual investor is buying the unwanted homes in the marketplace, the Giant buyer is looking to purchase the homes that are marketable to owner occupants.  The unrealized factor that the institutions have miraculously failed to calculate is the margin of error that comes into place with being an landlord.  Primarily vacancy, but maintenance and vandalism are  the difference between the speculated double digit return and the reality of the single digit return when rentals are poorly managed.

     Aside from the staggering amount of current foreclosures (which is addressed below), a booming real estate market and robust economy will still generate nearly 8% distressed properties to be purchased in any given marketplace.  An investment firm I once worked with in South Florida was one of the largest purchasers and distributors of investment property.  Prior to the mortgage meltdown in 2007 and the market collapse in 2008, there were not very many foreclosures.  Out of the firms 300+ home purchases in 2006, less than 3% were purchased from MLS and less than 1% were purchased from REO agents.  There were still more than enough discounted investment properties to go around and there were several avenues to purchase them from.

Current U.S. Foreclosures

    The fact that there are so many foreclosures (more than 1.5 million nationwide) is really more of a huge opportunity with about a 5 to 7 year window for "mom and pop" investors to take advantage of.  A calculation from www.realtytrac.com estimates that there are currently  1,554,156 foreclosed homes.  The so called "Giant" buyer will not make a dent in the amount of foreclosures in the marketplace and here is why:
The average sales price for a foreclosure, nationwide, is $179,844.  The institutions claim to have $8 billion in raised capital to purchase foreclosures.  If that is the case, these corporations have the capability of purchasing 44,483 homes.  That still leaves us with 1,509,673 foreclosed homes in the U.S.   Even if owner occupants purchase 90% of the remaining 1.5 million foreclosed homes, that still would leave 150,967 foreclosures to buy, not to mention the average 8% of non-foreclosed distressed properties within the marketplace.

The bottom line: mom and pop real estate investing is as plentiful as it has ever been and will continue to flourish.