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Investor interest

By TAMI LUHBY | tami.luhby@newsday.com

December 2, 2007

The recent downturn in the market has made Jack Geoffroy all the more interested in investing in real estate.

Geoffroy, 56, who owns a wholesale seafood company but has dabbled in real estate for more than 30 years, is looking for Hamptons houses he can renovate or vacant pieces of land he can build on. Now that the prices have come down a bit, he says he hopes to be even more involved.

But the Sag Harbor resident acknowledges that the landscape has changed in recent months. He accepts that the properties he buys are no longer going to soar in value as they have in recent years. "I'll make whatever I'll make," he says.

Geoffroy is also more careful these days on what he spends for an investment property and how much money he puts into it for renovations. He's had to lower the price of a waterfront Southampton home he put on the market in October, about a year after he purchased it for $950,000. It's now listed at $1.295 million, down from $1.395 million, reducing the profit he had hoped to make.

Financing also has become tougher, he says. The banks want more money down and are charging a higher interest rate. They also are doing more thorough background checks, which can slow the process.

Those who have good credit, however, will be fine, he says. Geoffroy also has another option: He can take out home equity loans against the property he already owns to buy new ones.

"You can still do it . . . it just takes a little longer," he says. "To me, it's a good time to get involved if you can come up with the money. You just have to be careful with the renovation budget."

Geoffroy has a rosier view of the housing environment than some. Industry insiders say it can be tough to make money in this market.

The key to investing now is to get a good price when buying the home and not to over-invest in fixing it up, says Beth Troy, a licensed real estate saleswoman with Town & Country Real Estate in East Hampton. It's harder to make a nice profit when flipping properties since homes are sitting longer on the market and are commanding less, she says.

"Don't overextend yourself," she warns.

In the past two months, she's noticed that sellers are becoming more realistic and adjusting their prices to the market. Some of these homes are now getting multiple offers, she says.

Still, a lot of professional investors are pulling back, says Todd Yovino, owner of Huntington-based Island Advantage Realty, which sells bank-owned property. These investors are having trouble getting financing to purchase homes and finding buyers for them.

"Investors are sitting with inventory trying to sell it," Yovino says. "They can't. We're in a whole different world."