In an unprecedented effort to buy and flip distressed properties in Sonoma County, a Vacaville company has purchased more than $15 million worth of foreclosed homes across the county in the past six months.
Blue Mountain Realty, which acquired its first home locally in November, has quickly become the single largest buyer of homes in the county. The company has purchased more than 70 area homes in foreclosure since December.
Blue Mountain seeks to buy the vacant properties, fix them up and sell them at a profit. It is targeting Sonoma County partly because the local economy and housing market seem to be improving -- and partly because it's become more difficult to find foreclosure properties elsewhere in Northern California.
"What we're constantly in the hunt for is, where are those opportunities?" said Rick Revetria, the company's vice president of operations.
Privately, some local real estate agents are questioning the wisdom of its aggressive entry into the local real estate market. Others say the flurry of purchases by Blue Mountain is a multimillion-dollar vote of confidence that the housing market has hit bottom.
John Duran, a broker with Frank Howard Allen in Santa Rosa, said the volume of purchases will have potential homebuyers asking, "What do they know that I don't know?"
While real estate speculators have been buying homes in Sonoma County since the market hit bottom in early 2009, none have done so at the scale of Blue Mountain.
In other U.S. cities, even larger investment firms are attempting to buy thousands of foreclosures and convert them to rental properties. Foreclosure specialists said such money also is flowing into Northern California, but Sonoma County appears less attractive for such ventures because other regions can provide bigger investment returns on rental properties.
Blue Mountain officials estimate they will flip about 1,200 homes this year, mostly in California.
However, the company may be slowing its purchases in Sonoma County in the coming months, said Greg Owen, president of Blue Mountain. The number of available foreclosures in the region appears to be declining.
"There's more cash than there is opportunity right now," said Owen, who added that his company has the ability to buy and resell 2,400 homes this year.
Six homes in one day
Even so, no other buyer comes close to the company's purchases at foreclosure auctions this year, according to county records. On Feb. 15, an investment group affiliated with Blue Mountain paid $1.7 million in cash for six homes in Santa Rosa, Windsor, Petaluma and Sebastopol. The purchases by the investment group, Polymathic Properties Inc. of Vallejo, represented half of the foreclosed homes that changed hands at county auctions that day.
Blue Mountain's three divisions employ more than 500 people around California, Owen said. Related companies include an acquisition group, a construction group that repairs homes and Blue Mountain Realty, whose agents sell the foreclosures.
Owen said the company's investment money comes from friends and associates from his 30-plus years in the construction industry. The auction purchases are recorded to investment groups with names such as Blue Mountain Homes LLC or Residential Foreclosure Fund II, whose addresses are the Blue Mountain offices in Vacaville.
Historically, small-scale buyers were the ones buying foreclosures at auctions in Sonoma County, fixing up the homes and flipping them.