By Vestpro Residential Services
There’s no doubt that Hurricane Harvey was one of the worst hurricanes that the Houston area has ever seen and one of the top natural disaster to strike the United States.
Now that it’s almost been one year since Hurricane Harvey it’s the perfect time to look back on the effects of the disaster and ask if the Houston area hold opportunity for investors? The answer is yes.
Hundreds of Millions Being Spent on The Houston Area
Investors large and small are snapping up thousands of properties flooded by Hurricane Harvey. From billion-dollar Wall Street funds to mom-and-pop flippers, they’ve already purchased at least 5,500 flooded homes, often for dimes on the dollar.
In the process, they are transforming some Houston neighborhoods into block after block of rentals. They’re interrupting county plans to buy out flood-prone properties. And they’re leaning on the taxpayer-funded National Flood Insurance Program to protect them from future floods.
“All we’re doing is perpetuating a cycle of flooding,” said Harris County Flood Control District operations chief Matt Zeve.
Small and mid-sized private companies have dominated the post-Harvey market so far, some sending in executives from California, Colorado and Las Vegas. But now institutional funds, which woo wealthy investors with promises of double-digit returns, are dipping their toes in the water, too.
The $4.6 billion Tricon Capital Group, of Toronto, wants to spend $600 million in Texas before the end of next year, according to area brokers trying to persuade the company to buy flooded homes in Houston. A $30 billion New York City private equity firm, Cerberus Capital Management, has picked up at least a dozen flooded homes among 980 it purchased after Harvey. A California firm, B&P Investment Group, is looking to spend $400 million, targeting homes flooded by the release of water from northwest Houston’s Addick’s and Barker reservoirs.
“Four hundred million is a lot of money,” said Ryan Pina, president of the Orange County-based B&P. “We’re looking to go in and essentially rehab the city of Houston, bit by bit.”
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For property management in the Houston area contact Vestpo Residential Services at (832) 971-1841 or click here to connect with us online.