NRES continues to be the gorilla in the house at Washoe county Trustee’s sales. They have picked more than 40 so far this year, and their total purchases on the courthouse steps will crest 150 by the end of the month. I’ll put together an update after April Fool’s day to track how they have been doing in the last 4 months since the last update.
3rd party purchase at Trustee’s Sales used to run about 2% of the sales – it is running at 6-8% currently. More and more, the buyers are members of the real estate community:
– Individual Agents – Whether using their own money, fronting for an individual investor and splitting the proceeds, or acting as a fund, familiar names are showing up. Karen Walker Hill of Ferrari Lund comes to mind show up as the buyer or as the mailing address for a buyer.
– Broker Side Venture – Celerity LLC’s director is Cory Edge of Edge Realty. They have picked up 15 properties at Trustee’s Sales.
– Broker Related Venture – Greenstreet Holdings LLC has the same director as Greenstreet Realty, James Zaccheo, and have purchased 43 properties so far at Trustee’s sale.
None of this comes as a surprise, and doesn’t necessarily seem to pose any conflicts of interest. Realtors have the MLS to research homes going TD that may have been previously listed – a resource not available to the casual investor. Even having boutique (no disrespect intended) brokerages like Edge and Greenstreet being active the TD market doesn’t raise any systemic conflicts. But a new player has entered the Trustee’s Sale market, and I think they bear scrutiny.
Dickson Group I LLC (DGI) registered with the Secretary of State on 25 January 2011 and the Director was Harvey Fennell, the owner of Dickson Realty (currently in default – list of officers due 28 February wasn’t filed). They then went on a buying spree on the courthouse steps:
– 2/18/2011 – 3932 Kentwood, bought for $105,000 with $206,002 owing, last purchased for $250,000 on 6/16/2006, listed prior to the TD by CB Select, currently listed for $153,000 by Dickson.
– 2/18/2011 – 13605 Mount Whitney, bought for $29,900 with $170,638 owing, last purchased for $88,000 on 10/30/2006, no MLS listing prior to the TD, currently listed for $63,000 by Dickson.
– 2/22/2011 – 175 Surge, bought for $40,700 with $248,699 owing, last purchased for $80,000 on 5/2/1994, no MLS listing prior to the TD, not currently listed.
– 3/8/2011 – 7489 Spey, bought for $82,950 with $248,045 owing, last purchased for $270,000 on 10/24/2006, listed in 2009 by Keller Williams, not currently listed.
– 3/16/2011 – 6760 Pah Rah, bought for $95,500 with $206,944 owing, last purchased for $255,000 on 10/16/2004, no previous or current listing.
– 3/16/2011 – 1295 Butler, bought for $38,900 with $229,566 owing, last purchased for $207,000 on 4/28/2005, no previous listing, currently listed on the MLS for $59,900 by dickson. I’m assuming DGI is a fund of OPM (other people’s money) given the rapid ramp up in purchases. Dickson Realty advertises themselves as “Your Market Leader”. Again, no diss to Greenstreet, but this is the first time I have seen a buyout fund “branded” buy a major player in the local real estate brokerage world. I don’t think the name is an accident – it is meant to attract investors based on the Dickson brand and stellar reputation. Which brings up some points for consideration:
– Do realtors have an unfair advantage at Trustee’s Sales based on the proprietary information they have access to (previous listing history, photos of conditions, previous disclosure statements)?
– Is it possible that your agent is taking your short sale listing only to do discovery on your property for a later Trustee’s Sale to a related entity?
– Can you trust a realty agency that is playing both sides of the game to always have the seller’s best interests in mind when recommending short sale strategies? The big money is flipping a TD, not in the short sale commission – you get the commission anyway on the back-end.
No accusations of malfeasance intended or implied in these observations, just thoughts on a new wrinkle in the local market that I hope will generate some thoughtful commentary.