DALLAS, TX - The housing market may be in a slump, but that's not stopping John Vernon from jumping in. The Aledo businessman has developed duplexes and four-plexes for investors through his company, Big Sky Investments. He's now entering the single-family market by buying vacant land. He says he's doing so because the price is right. "There are good deals in real estate right now," Vernon said.
Vernon bought 106 unfinished residential lots in the New Rolling Hills subdivision in southeast Fort Worth, an area once planned for an affordable-housing development. The 36-acre subdivision is west of the intersection of South Riverside and Campus drives. The streets are built and utilities are in place, and Vernon said he was able to buy the land at a good price. Even if it takes awhile to finish the development, Vernon says he'll be fine. He would not say what he paid for the land because he's negotiating to buy some adjacent lots.
In this down economy, investors with cash can find land for single-family developments at a good price. Landowners are motivated to sell, industry observers say. Investors with cash are picking up deals at very fair values, said Ken Wimberly, a broker with Sperry Van Ness/Visions Commercial in Fort Worth.
Wimberly recently represented a California investor who snatched up 288 acres, some of it zoned for single-family development, in far south Fort Worth, near Crowley-Cleburne Road, and McCart Avenue and Risinger Road. "It's a strong market," Wimberly said. "This was a cash deal. It's a good time to be sitting on a bunch of cash."
The deal included two parcels: One is 258 acres consisting of 30 acres zoned for multifamily use, 50 acres for commercial use and 178 acres for single-family houses; another 30-acre parcel is also zoned for residential development.
Texas Housing and Economic Resources was first behind the New Rolling Hills subdivision. By 2007, it had taken the group nearly a decade to build two houses in the neighborhood. Residents are living in those houses today. The nonprofit organization filed for bankruptcy in 2007, owing millions of dollars, including $2 million to JPMorgan Chase Bank. The bank foreclosed on the land that year and in December sold it to Vernon.
Vernon said he looked at the property about 18 months ago but passed on it because the price was too high. But he was really interested in the land and he kept an eye on it. By December, he said he was able to negotiate the price down considerably. The bank's only stipulation was that he close the deal by Dec. 31. He did.
Gopherwood Construction in Weatherford, headed by Clint Robertson, will be Vernon's builder. The houses will be marketed through the Texas Real Estate Investment Opportunity Network. He's targeting first-time home buyers Eddie Washington with DFW Executive Realty represented Big Sky Investments. Kyle Kummer and Lester Day with NAI Huff Partners in Fort Worth represented Chase Bank.
Vernon said he'll start by building 10 houses, and as they sell, he'll build more. The houses will range from 1,100 square feet to 1,350 square feet, and be priced from $110,000 to $160,000. "It's going to be a great opportunity for first-time homeowners," Vernon said. Wimberly said the California buyer, Cohix Llc., won't develop the land but will sell it as market conditions improve.
That shouldn't take too long because the land is in a fast-growing area, near the well-established subdivisions of Carson Ranch Estates and Summer Creek Ranch. It's also near the planned southern extension of the Southwest Parkway, and other road and thoroughfare projects, Kimberly said.
The land was sold by a large investor group from Mesa, Ariz. Three previous contracts on the land fell through, Kimberly said. The multifamily piece will likely be the first to go, he said. Trevor Dyck, a broker with Sperry Van Ness/Visions Realty, also represented Cohix. There are good deals in real estate right now."
Source: Star-Telegram.com