So, I just came across this site today- www.builder-implode.com. It’s funny, but also very interesting. They’ve got some decent information in there. They have a list of builders who have ‘imploded’, as well as a list of ones on the verge of ‘imploding’. According to the site, here’s the Top List of ones to come. Anyone interested in some Discounted Builder Inventory???
Ailing/Watch List*:
12. Pulte Homes Inc.
11. Centex Homes
10. D.R. Horton, Inc.
9. KBH Home Inc.
8. Hovnanian Enterprises Inc.
7. Ryland Group
6. Standard Pacific Homes
5. Kimball Hill
4. John Wieland Homes and Neighborhoods
3. Beazer Homes USA
2. Meritage Homes Corporation
1. Lennar
I heard about this a few days ago, but now the media has picked up on it. Randall Martin Homes, a smaller sized builder has announced that it is letting the lender take back the remaining of their vacant lots in certain communities. Surprise’s Marley Park, Avondale’s Roosevelt Park, Chandler’s Dobson Crossing and Gilbert’s Higley Park are the communities effected by this decision. Obviously, they couldn’t make their payments in the Valley’s Housing Market downturn.
Existing homeowners will not be affected, other than having a number of vacant lots throughout their neighborhoods. Randall Martin has committed to finishing any existing contracts with homes under construction, but will not be starting any new ones in those areas.
Two other builders, Turner-Dunn in Pinal County and Trend Homes Inc. in Gilbert, have had similar problems in the past two years. A private equity company purchased Trend last month and is sending it through bankruptcy reorganization. Turner-Dunn walked away from 200 unfinished homes in 2006.
- Cathryn Creno, azcentral.com
My take on this? I’m sure another builder is already in negotiations with the lender to purchase the lots at an AMAZING price. This happened out in Queen Creek a year or two ago. A number of lots we sold at pennies on the dollar from a builder who just couldn’t financially compete with the market. The result was 3,000-4,000 sq ft homes, fully loaded with every upgrade you can imagine, being offered at $250,000 starting price. Yeah, I wish I would’ve jumped on THAT opportunity! It’ll be interesting to see over the next year who capitalizes on the situation, and at what price they release the new homes. I also anticipate at minimum of 2 other builders doing the same thing this year.
Here’s another article on it.
Hot off the wire! An Investor Group I know of has a package of 59 New Construction Homes under contract at 50% FMV all over the Valley. They are putting in $250,000 themselves, and are looking for an additional $9 Million for the rest of the funding. These homes are all from a single builder here in the Valley, who’s obviously dumping his inventory to stay afloat. The plan is to wholesale out the homes at 70-75% FMV and be completely out of the deal within 6 months. Here’s the facts I know in the moment…
- 59 New Construction Homes
- $9Mil required, will be secured by Title Reports, 1st Position Trust Deeds, and Fresh Appraisals
- Acquiring properties at 50% Fair Market Value
- Wholesaling them out at 70-75% Fair Market Value
- Total Holding Time: 6 Months Max
- Willing to pay points + return to funding entity
- Can assemble multiple investors for the take down, but would prefer just one or two
Most of the time you hear of these deals, they’re complete BS. However, I personally have known this investor for 7+ years, and feel confident in the deal. They’re looking to fund within 3 weeks, if possible. If you know anyone looking to get into this opportunity, please let me know ASAP.
