Harry Bassford went to the Atlantic County Sheriff’s sale in May and bought an Atlantic City property — 441 N. Tennessee Ave. — for $3,000.
It was his 10th Atlantic City purchase in 2016.
In April, he bought 212 N. Texas Ave. for $3,700. In February, he bought 1402 N. Michigan Ave. for $5,500. About a week later, he scooped up 2000 Grant Ave. for $1,100.
Bassford, 61, of Egg Harbor Township, has a real estate license and an office at Berkshire Hathaway in Northfield. But he doesn’t market much to the general public.
“I’m just doing my own investing,” he said.
Investing in Atlantic City
Wednesday May 18 2016 Kurt Kwart of Ventnor recently purchased a three apartment rental unitat 126 South Ocean Avenue in Atlantic City. In spite of the city's financial woes, many individuals and groups are investing in properties throughout Atlantic City. (The Press of Atlantic City / Ben Fogletto)
Measuring by sheer number of purchases, his 6. N. Brighton LLC could be considered the most voracious real estate company in Atlantic City. The firm could also be viewed as a counter to the conventional but questionable narrative of Atlantic City being a bad place to park money.
Sometimes Bassford flips the buildings he buys. Sometimes he uses them as rentals. And sometimes he buys a turkey. But mostly, he doesn’t, said the Richard Stockton College graduate, who spent decades as a certified public accountant and running a mortgage company.
He’s building his Atlantic City portfolio under a philosophy shared by other real estate investors here: “At these prices, it’s not very risky.”
In 2012, the median sale price for a single-family home in Atlantic City was $114,000, according to the New Jersey Association of Realtors, an advocacy and research group. Last year, it was $60,000.
Prices for vacant land have plummeted even more dramatically.
In 2008, vacant land in the city, on average, was sold for $44.05 per square foot, according to sales data provided by Weichert Realtors, whose Atlantic City office specializes in investment properties. In 2015, the average was $11.55 per square foot.
“Values have dropped back 30 years, 40 years,” said Adam Palmisciano, a longtime real estate investor who represents banks when they auction properties at sheriff’s sales in South Jersey. “All the appreciation has just been wiped away.”
And more city properties are about to go on the auction block. Some 120 city-owned properties will be put up for sale at a live simulcast auction June 23 at the Atlantic City Convention Center. Available properties include a residential development piece on the new Boardwalk with views of the ocean and inlet, a mixed-use commercial site on Atlantic Avenue, a multifamily site near City Hall and an entire city block near the Convention Center.
An investor could even walk away with Bader Field, the former municipal airport, which is being put up for sale again, with bids due July 14.
Atlantic County had the highest foreclosure rate in the U.S. during the first quarter of 2016, according to RealtyTrac.
Banks are unloading properties for fractions of what borrowers owe on them. The bank that sold the Tennessee Avenue property to Bassford was owed $138,000. Another investor won 3109 Fairmount Ave. for $44,000; the bank was owed $239,000 on that property.
ATLANTIC CITY — The city is putting Bader Field back on the auction block as it continues to…
The surfeit of sheriff sales is a symptom of the troubled local economy, which has suffered from the contraction of the Atlantic City gambling industry. Sheriff’s sales are also an aggravating factor; an abundance of cheap, bank-owned housing drags down prices generally.
Palmisciano, of Wildwood Crest, has brokered real estate for more than 30 years. Distressed property is his niche. To him, “Atlantic City is a long-shot investment. It’s going to depend when they can make that city vibrate again, regardless of the big Ferris wheel coming in, regardless of the college coming in.” The market here, from his view, has “totally, totally bottomed out.”
But for investors such as Bassford and Kurt Kwart, 37, of Ventnor, that means it’s go time.
Kwart, an Atlantic City firefighter, has been buying properties since 2004, when he purchased a duplex and a single-family home in Egg Harbor Township.
In 2013, he started buying in Atlantic City. Now, he has five properties with seven units here. He has no plans to stop.
Accessing capital to scale up is a challenge. But his business model remains: “Buy in Atlantic City all day long.”
Kwart’s first buy was a pair of single-family homes on Indiana Avenue, which he snagged for $37,000 apiece. He promptly began renting each out at $1,200 per month.
“That’s insane,” he said. What he means is: The numbers work.
Property taxes are high in Atlantic City. But property prices are low.
“You buy a property here for the price of a new car,” said Kwart, who buys through an agent, not at sheriff’s sales. Demand for rentals is robust. It’s not unrealistic for an everyday investor to find a property that produces $700 or $800 net income per month.
More than 850 hotel rooms will open at Showboat Atlantic City in July, owner Bart Blatstein …
Sure, dealkillers abound.
Flood insurance can drown you.
And some property owners haven’t appealed their taxes in years, which means they’re considerably overvalued by the city’s tax assessor.
But “I’ve got some good numbers in spreadsheets,” Kwart said.
And, he predicted, “more and more people are going to be getting on the bandwagon.”