Foreign accents and real estate agents representing foreign buyers have become common at foreclosure auctions in metro Atlanta.
Georgia has long been a top-10 state for foreign real estate investors, the National Association of Realtors says, but low home prices and strong foreign currencies have made the U.S. and Georgia even more attractive to investors. What is new in this round of buying is that individuals, not just investment firms, are getting involved, and they are dropping money into Atlanta houses, condos and apartments rather than stocks or bonds back home.
Foreign residential investments in the U.S. grew from $66 billion to $82 billion in the 12 months between March 2010 and 2011, the NAR says. Two percent of the $82 billion came to Georgia, it says.
The money is helping prop up metro Atlanta home prices and keeping Georgians employed, local real estate agents say.
Michael Over, an Englishman living in Thailand, visited Las Vegas, Memphis and Atlanta, researching a place to park some investment money. The retired baker bought five homes on this trip.
After keeping them for a while and seeing how they do, he might buy another five, he said in the Marietta offices of WRI Capital Group.
Andy Capps, a managing partner with the firm that specializes in helping foreign investors, sees more brokers, big investors and individuals coming on their twice-monthly bus tours of available metro Atlanta homes.
“We are selling 30 to 40 a month,” Capps said, with most buyers coming from Australia, the United Kingdom, China, Israel and Canada.
“Definitely, the average person can now get into the residential real estate market,” he said. “And interest has certainly picked up on the residential side.”
Over said there is worldwide knowledge about what has happened to the American real estate market, and now that the pendulum has swung to the lower end of the scale, it is time to get in.
He will rent out the homes he buys to get an immediate return on his investment and perhaps sell them in five or more years for a profit when he thinks the market might start climbing again.
Capps said the sales are good for local home values.
“These homes are vacant, they are subject to vandalism, and that is bringing down market values,” he said. “So when we come in and do a full-scale renovation and improve the home, we are increasing the market value of homes around it.”
He added local workers are also employed repairing and managing the investment properties.
Bronwyn Douglas, who helped start Top Rental Returns in Atlanta 18 months ago to represent foreign buyers, picked up five houses at a June foreclosure auction. The company helps renovate the houses and puts them on the rental market for new owners.
“Buyers can get a brilliant return on their investment, including the renovation and closing costs they have to pay,” Douglas said last week.
Many of Top Rental’s buyers are individuals with less than $100,000 to invest.
Douglas and partner Michael Collins helped mom-and-pop investors from nine countries, mostly from their native Australia, put $5 million worth of metro Atlanta houses under contract in their first year of business, and that number is growing. In the first six months of their second year they have closed on $5.7 million worth of houses, she said.
Those investors are helping keep the depressed residential real estate market floating, said Steve Palm, an investor and president of the real estate tracking firm SmartNumbers. He helped Chinese investment funds buy $103 million worth of empty metro Atlanta lots this year.
The money foreigners are pumping into the Atlanta market sucks up some of the excess property from the foreclosure crisis and gets it off banks’ books, he said.
“It throws money into the market” at a time when an injection of cash is exactly what is needed, Palm said.
And it may be helping the market heal faster. Some recent reports, such as one by ForeclosureRadar, a California property tracking firm, says investors do a better job than banks of getting foreclosed properties back on the market or reoccupied.
The National Association of Realtors says the top states for foreign residential investment in order are Florida, California, Texas and Arizona, followed by New York, then Georgia.
Jed Smith, the NAR’s director of research, said foreigners see what they can buy in the U.S. as bargains compared with what they can get in their home countries.
“From their point of view,” he said, “they can get a very big house for a very good price.”
Ewoud Swaak, president of Atlanta’s Westplan Investors, helped direct $65 million of Dutch investments in metro apartments in 2010.
“Our investors are Dutch pension funds and high-net-worth individuals,” he said.
The apartment market has been on an upswing as the market for single-family homes has collapsed.
“High-net-worth individuals were very bullish in the American market,” Swaak said. “We hope we can continue that in 2011, although we think the best prices have already gone.”
Emily Fu, a team leader with ReMax Greater Atlanta in Roswell, said she is seeing more interest from Chinese and Indonesian buyers looking for land to buy and hold until the market improves, and she sees growing interest in houses to rent. Fu helped create a team of real estate agents fluent in five languages and attorneys with expertise in closings for noncitizens.
“International buyers,” Fu said, “see this as a golden opportunity to buy a piece of America.”
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