Throughout Tampa Bay – from the respective County Commission chambers to individual Mayor offices – revitalizing Tampa Bay to improve the lives of its residents is a major agenda item in 2015. While each will do its part, private business must also step up. As part of that mission, EquiAlt LLC (www.equialt.com) announces the purchase of its 172nd distressed property to help redevelop existing neighborhoods by converting neglected homes into livable assets.
Initially launched in Las Vegas in 2008 and then in Tampa in 2012, EquiAlt is an alternative investment and asset management company specializing in opportunistic real estate through four SEC-registered funds. While common on the West Coast, real estate investing and acquisition by institutional firms has been rare in the Tampa Bay auction market. Until now.
“Most of the public is aware of the traditional real estate market where homes are offered and sold through brokers to buyers (i.e. MLS) in a typical arms-length retail transaction – and there are opportunities in that space that we have taken advantage of,” states Brian Davison, CEO of EquiAlt.
“However, there is another market. In 2014, 2,853 properties with an estimated market value $100 million went to the Tax Deed auction schedule in Hillsborough and surrounding counties. This is a cash only auction for homes with no title insurance and almost always in distressed condition that buyers had limited or no prior access to. This market is where EquiAlt can create the most value for everyone – investors, the local community and the local government.”
Tax deed auctions – held weekly or monthly in most counties – are for homes (single family, condo, mobile home and even land) in which non-payment of taxes have occurred for three years. In most cases, the homes are not owner occupied, sometimes completely abandoned, and are not adequately maintained during that time. As a blight sitting in the neighborhood, the home can drag down surrounding home values until the problem is fixed.
EquiAlt uses its experience and underwriting platform to purchase distressed properties at undermarket value to stabilize the community while protecting investment principle. While partnerships and even Hedge funds purchase assets from retail/MLS and then leverage the property through loans, EquiAlt pays cash for the homes to remain debt free to maximize yield and control of the properties.
States Davison, “Through our process, we analyze the market, buy the homes that offer the best long- term return, clean up the liens, restore it to good standing and manage it through rental agreements with tenants. It’s a win-win since we help the County increase its tax base, homeowners association with up- to-date dues, tenants with peace of mind knowing we own the home outright and investors with a low risk investment that yields returns through the rent we collect while securing the principle.”
As the largest buyer in the tax deed auction in Hillsborough County, EquiAlt owns and manages 99 percent of the homes it acquires. This is stark contrast to many of the companies who buy and try to flip the homes as speculators, which has led to the exaggerated value increases in the past. Unlike these companies who buy and instantly try to flip, EquiAlt has injected $4.5 million into the local construction and contractor market for services to repair the homes it purchased.
“I live in this community,” says Davison. “My children go to school here. My goal is for our company to enhance each community we become part of. When EquiAlt buys a home, I hope the community will know that we’ll stand by the home, do what is right to make it an asset everyone can feel good about and contribute to the community in a positive way.”
Since 2012, EquiAlt has purchased the following in the Tampa Bay region: Homes In Hillsborough: 78
Homes In Polk: 57
Homes In Pinellas: 28
Homes In Hernando: 7 Homes In Pasco: 1 Homes In Manatee 1
In total, the homes are now worth around $15,000,000.
Davison says that the company is looking to expand its staff and resources by adding properties here as well as expanding into Miami and Orlando in the near future.