The construction market slowdown to historic lows has the braintrust at Toll Brothers reconsidering their business plan. Since they can not sell new homes right now they have announced a plan to buy distressed properties.
Yep, a top homebuilder is going into the REO game. And it is a brilliant move. One of the biggest fears when buying a foreclosure or short sale is the problems in the property that you can not see. The unexpected surprises you might say.
But Toll Brothers has the contacts for construction professionals in every trade and expertise. They have the resources to buy a home on the cheap at the courthouse, refurbish it quickly and efficiently, and then has the sales tools to drive the consumer to their homes.
This change if picked up by others in the building trade will put pressure on the local guy doing a house or two at a time.
Toll created Gibraltar Capital & Asset Management LLC to “pursue a broad range of real estate acquisition and investment opportunities,” the Horsham, Pennsylvania-based company said in a statement today. Those may include buying loan and property portfolios, developing sites for other builders and assisting in the workout of troubled real estate, the company said.
Toll, led by new Chief Executive Officer Douglas Yearley Jr., joins Lennar Corp. in seeking to make money from distressed real estate and move beyond its traditional homebuilding business. Sales of new U.S. homes slid 33 percent in May to a record low annual rate after the end of a federal tax credit, according to a Commerce Department report last month.via Bloomberg