REGIONAL SPOTLIGHT
In many trendy D.C. neighborhoods, investors are converting large homes to multi-unit condos, much to the chagrin of the neighbors and delight of new, "hip" home-buyers, said Sherman Ragland.
WASHINGTON D.C.
activity puts sellers in a prime position. “We just looked at how much that portfolio had appreciated since we originally bought it, between 35 and 40 percent in a lot of those cases, and we felt like it made more sense to redeploy that money into our core business,” Chandler explained. “Anytime you buy an asset and it goes up 30 percent, then sure, it could go up another 30 percent or it might not. Since yields on sin- gle-family residential properties in this area are also getting lower, it was time to let go,” he concluded. Vernon Vaughan, a local fix-and- flipper, agrees D.C. is not necessarily optimal for buy-and-hold strategies right now. However, he plans to remain firmly ensconced in the local rehab scene. “D.C. is a city that is bursting at its seams with a lot of the suburban population actually shifting back into the city,” he explained, noting that this trend is not unique to the Capitol area. “I think the American Dream used to be a house in the suburbs with a white picket fence, green grass, fresh air, and parks. Now, if you can get past the sticker shock, living in urban areas offers your family just as much, if not more, access to the services and amenities that used to just be part of the suburban lifestyle.” Vaughan, who is also a partner at Capitol Gateway Development and a managing partner at Realstar Proper- ties, which buys and sells properties in Maryland, D.C., New York, New Jersey, and North Carolina, has been flipping properties in the area for nearly 15 years. “We’ve definitely been through the full market cycle,” he observed. “We cut our teeth doing rehabs in areas like suburban Maryland, Baltimore city and Baltimore County.” Realstar specializes in deal- ing with older housing inventory and extensive rehabs, which Vaughan said is the key to getting good deals in a real estate market where an investor’s main competition for a deal may be a retail buyer ready to pay cash.
EXPERT SOURCES CITED IN THIS ARTICLE
DAREN BLOMQUIST Senior Vice President, ATTOM Data Solutions
BRAD CHANDLER CEO, Express Homebuyers
& President, Brad Chandler Coaching
CRAIG FUHR Founder, FlipClub
CHAD MCCALL Co-founder, Creative Wealth Academy
SHERMAN RAGLAND CCIM, Dean, Realinvestors Academy
NIKKI RYAN Licensed Realtor Virginia, KWRealty
VERNON VAUGHAN Managing Partner, FairAndFastHomebuyers.com
government. He added, “Right now, it’s a little troubling to see the number of rehabbers and even wholesalers who are signing high volumes of contracts and holding inventory or who have as many
as eight houses going at once. I don’t think the market can continue up at the rate it’s going right now.” “We’re actually winding down our portfolio in the Washington, D.C., area
right now,” said Chandler. “We had about 80 rental units we bought when the mar- ket took a dive between 2009 and 2012. We’ve decided to sell them all because we feel like we could be nearing the top
of the market. We are expecting things to plateau in the near future, then stay flat for a while,” he added. Chandler said that his company plans to focus exclu- sively on wholesaling in the D.C. area
in the next 12 months. This strategy has the advantage of a fast turnaround that allows investors to get in and out of deals quickly and that many consider optimal for hot markets where lots of buying
56 | think realty magazine :: april 2018
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