Blue Apex Investments acquire distressed residential properties in Orange County and Riverside County, CA. Blue Apex purchase these investment properties below market value, add value to the properties by rehabbing, upgrading, and renovating, then selling it at retail price (commonly known as fix and flip).
Blue Apex handles all aspects of property acquisition, renovation, and retail marketing. Additionally, we also have a strong team of investment advisers, industry professionals and contractors to ensure our investment plan is well-defined and successfully executed. This includes qualified CPAs, real estate attorney, and title attorney, as well as a team of real estate agents, inspectors, appraisers, and insurance agents.
Acquisition Strategy
Blue Apex purchase distressed properties below fair market value. By purchasing these properties, Blue Apex is able to generate consistent profit margins. Blue Apex focus on acquiring distressed properties using a variety of means:
- Foreclosure Auctions
- Bank REO
- Investor Networking
- Direct Mail Marketing
- Neighborhood “Farming”
- Broker Networking
- Wholesalers
Rehabilitation Strategy
Because it is likely that a high percentage of these properties will require some degree of rehabilitation prior to resale, it is essential in evaluating the condition of a purchased home and improving it appropriately. The level of rehab work will be uniquely different on every property, ranging from minor cosmetic improvements to major structural overhaul and complete remodeling.
It is important to have an accomplished and skillful person leading the rehabilitation process, and Sue Hong is that talent. Sue’s background is graphic design, art, and interior design. She is extremely gifted with her creativity, design sense, and home improvement strategy. She understands who are our target market and the wants and needs of potential homeowners.
Exit Strategies
In order to stay flexible and profitable in today’s fast-changing real estate market, Blue Apex will prepare for multiple exit strategies, as necessary to complete our deals.
These are exit strategies for every property:
Resale: In most cases, we expect to turn-around a newly acquired property for quick sale after rehab (commonly referred to as a “flip”). We aim to achieve this within 3-6 months.
While rehabbing and reselling will be the preferred strategy for each property, we will certainly consider other back-up strategies as necessary to ensure multiple option exits from each project.
Lease-Option: An increasingly more popular mechanism for exiting a property investment in a difficult market is to lease-option the property to potentially qualified buyers. In a lease-option, the property is leased to a tenant (just like a rental), but the tenant is contractually offered the right to purchase the property for a pre-determined price at some future point in time. In return for receiving the option to purchase, the tenant pays an option fee and an increased monthly rent. Should the tenant choose to execute the option, the option fee and a portion of the increased rent are credited against the sale price; should the tenant choose not to execute the option, the option fee and the rent differential are forfeited.
Long Term Hold (Rental): Occasionally a property we acquire will be held for greater than one year and rented to qualified tenants. All properties considered for long-term hold will be evaluated prior to acquisition to ensure that they will produce adequate cash flow to support all property expenses, plus provide a return on the investment. Properties held as rentals will continually be evaluated against market conditions to determine an appropriate time to sell.
Marketing Strategy
Blue Apex works closely with full-time real estate agents and brokers who provide all real estate and marketing services to the company. This demand has been achieved via a number of marketing strategies implemented by Blue Apex and our real estate agents, including:
– Providing the Best Product. Blue Apex surveys a complete area of surrounding homes currently on the market. By walking through these homes with an agent, Blue Apex can get a sense of the market competition in the specific neighborhood and the rehab can be targeted at creating a product that is superior to its nearby competition. In addition to producing resale homes that are in better condition than its local competitors, Blue Apex aim to produce homes that are also lower-priced than competing homes in the area.
Because Blue Apex are purchasing distressed property at prices far below what local home-owners have paid, Blue Apex have the ability to sell renovated homes that are both nicer and lower priced than the competition.
– Data Mining. By using the MLS to mine historical sales data, Blue Apex is able to target those agents who are actively selling homes in the local area and price-range we are selling in. Blue Apex is going to the buyers (and their agents) instead of waiting for them to come to us. By holding agent-only Open Houses, by providing extra bonuses to agents who sell our houses, and by offering incentives for repeat business, Blue Apex are getting many agents to actively pursue our houses for their buyers.
– Marketing Early and Often. In today’s market, the key to selling homes is to generate traffic. This is done by renovating, staging and reselling homes in areas that will receive both foot-traffic from neighbors and drive-by traffic. By placing signs on the property before the rehab begins, Blue Apex have the ability to generate interest from the outset of the project. By sending marketing letters to all our neighbors inviting them to stop by during the renovation, we generate interest by those neighbors who may be currently renting, but would love to buy. By holding multiple Open Houses, we are able to get many potential buyers through the door. By the time the rehab is finished, we generally have several leads for potential buyers and are able to get the property under contract within a week or two of listing it for sale.
– Move-In Ready. We ensure that every one of our properties is move-in ready for the potential home-buyer. This includes providing a brand new full set of stainless steel appliances, all necessary window treatments, shower curtains, bathroom utilities, and many more.
Staging
The most effective marketing strategy Blue Apex have utilized is home staging. Again, this is where Sue’s strength and expertise come into play. With hours of continuous research in new model homes, Blue Apex are able to separate our properties from the pack by customizing them to our prototypical buyer.
Additionally, home staging allows our buyers to visualize what their home will look like fully furnished, providing them an emotional connection to the property they’re viewing. It has been our experience many potential buyers cannot visualize an empty floor plan and layout.
Our expertise in staging helps tremendously, as a result, our homes sell faster and at retail pricing.