Sonoma County's biggest buyers of foreclosed homes are embarking on a new strategy: becoming landlords in the Central Valley and Texas.
Chris Peterson and Brian Burke, managing directors of the Santa Rosa investment firm Praxis Capital, say they plan to keep buying distressed homes. But they won't just be flipping properties. They also plan to buy, hold and rent out both homes and apartment complexes.
"We think the big opportunity in the next 10 years is going to be in rental property," said Peterson, a former home builder whose Builders Marketing Group helped sell 7,000 homes over 25 years.
In 2009 Peterson teamed up with Burke, a longtime buyer at the foreclosure auctions. Last summer they consolidated their business efforts into Praxis Capital.
The two men have bought more homes at auction than anyone else in Sonoma County since 2008.
By their own account, Peterson and Burke bought 104 properties around Northern California last year, and nearly that many in 2009.
They seek to buy about 175 this year in six counties: Sonoma, Solano, Sacramento, Placer, El Dorado and San Joaquin.
The Central Valley, they said, provides a better opportunity than Sonoma County to purchase homes for rentals.
Others said the opportunities indeed exist.
San Joaquin County has "a very strong market" for buying distressed property and renting it out, said Jeff Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton.
Homes can be purchased in Stockton for $50,000 to $100,000 and rented out for $800 a month or more, he said.
"It makes it an attractive investment regardless of whether you get any capital appreciation or not," Michael said.
Praxis also is seeking to buy up to six apartment complexes in and near Austin, Texas, Peterson and Burke said. The company this month announced it has purchased a 54-unit apartment complex in Texas that recently went through foreclosure.
UPDATED: Please read and follow our commenting policy: