We can now add the tristate real-estate market to the list of things Hurricane Sandy threw for a loop. As damaged houses are being sold significantly below value, many "flip companies" have been approaching home owners in recent weeks, according to the New York Times.
Faced with the decision to sell out or fix storm-damaged homes, Steve Kaplan, an investment banker from Long Beach, said of home owners: “They’ve had enough. They are going to move on, they don’t want to deal, they don’t want to redo their house. There’s an opportunity here that you can buy houses for cash because they want to move on very quickly.”
So have Ryan Case at Seaside Funding — one of the flippers — and his friend Bob Gregor. While Case admits his 60 to 70 percent below-market rate offers are "not your best option," the two don't see their purchases as exploitative but rather "investments in the community when few people are buying homes."
So far, a waterfront five-bedroom home in Rumson, New Jersey, originally listed for $1.85 million is now $700,000 after it took on twenty inches of water, while a two-family house in the New Dorp Beach area of Staten Island valued at $580,000 pre-Sandy went for $279,000 after ten feet of water ruined it. Another 71 properties have been pulled off the market in flood zones around Brooklyn and Queens, according to Sofia Song at StreetEasy.
One homeowner told the New York Times, “It’s painful."
Only city attorney of Hackensack Joseph Zisa hasn't changed his mind about a house on the bay in Manahawkin, which he closed on at the pre-storm price. With the porches gone and a telephone pole in the yard, he said, “The view of the water, it’s so special.”