It is true that the brunt of downturn is troubling the US real estate sector still but an assortment of real estate companies at the moment are ready to offer stiff resistance, unlike the past. Redwood Real Estate Partners is also one of them and its latest approach in introducing a fund to buy up to $500 million in distressed residential real estate in the midst of an estimated surge in bank-owned properties is an emblem of defiance. According to Carl Chang, Chief Executive Officer of Redwood, Rancho Santa Margarita, California, real estate company will concentrate on mass sales of homes weighing on bank balance sheets, at present selling at 60 cents to 85 cents on the dollar.
Redwood Real Estate Partners, LLC (“Redwood” or the “Company”) is a privately-owned entrepreneurial real estate investment company focused on the acquisition, development and re-development of commercial real estate in the western United States. It is basically a joint venture between Carl Chang (“Chang”), the real estate investor and manager with profound experiences, and The Sienna Group (“Sienna”), a Seattle-based investment firm.
Speaking on this Carl Chang stated, “Financial distress, and lack of liquidity (have created) some large buying opportunities that I hadn’t even seen in the late 1980s and early 1990s” when real estate markets were under stress. Redwood’s recent $44 million investment in bank “REO” (real estate owned) produced up to 35 percent returns, he said.
It should be taken into consideration that the bank-owned properties have risen rapidly since declining home prices, risky mortgages and the economic recession heighten foreclosures to record highs. The foreclosure rate hit a record in April — up 32 percent from a year earlier — after moratoriums expired. That will probably result in a corresponding spike in REO, in accordance with RealtyTrac.
In the meantime, mortgage companies are stepping up sales of REO by slashing prices, Thomas Lawler, founder of Lawler Economic & Housing Consulting, wrote in a client note.
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