Thursday, May 18, 2006

Why Dwek is Relevant

I'm less interested in Dwek's alledged wrongdoing than I am about what the wrongdoing might mean for the real estate market both locally and nationally. From the bubble perspective, I can't help but think that Dwek is probably only one of hundreds of big-money type "investors" that had access to easy money (obtained fraudulently and legally) and, at the same time, little regard for fundamental analysis as to whether a property was a good investment or not. It seems that Dwek's access to easy money allowed him to buy properties with little regard as to whether the properties were capable of actually turning a profit. If this situation was repeated hundreds or thousands of times across the country by different individuals, then property prices are going to have another source of downward pressure.


Here is a portion of a good article from the Atlanticville.

Snip...


Reports of Dwek's legal and financial troubles could have their repercussions in the real estate market as a whole, Brothers pointed out.

"This is a lose-lose for everybody, a very bad thing for not only the commercial market, but the market in general," Brothers said. "It creates a mind-set where people say, things are all bad. It establishes a posture for people that is more difficult to negotiate with," he said.

With downward pressure building on the market and prices and demand softening, the effect of Dwek's downfall will be far-reaching he said.

"If he ends up losing properties, people will be hurt. Unfortunately, a lot of people are going to suffer," Brothers concluded.

Among Dwek's holdings in Ocean Township are the empty Worden-Hoidel Funeral Home at 236 Monmouth Road and 3-acre tract at 259 Monmouth Road.

Full Article...

13 Comments:

Anonymous Anonymous said...

Indeed. His strategy reminds me of playing Monopoly as a kid.

Too bad for him that he rolled a three after acquiring Ventnor Ave.

Thursday, May 18, 2006 10:48:00 PM  
Anonymous mrdenis said...

I would hold all the banks and investors responsible for this man's accumulation of properties ,just pure GREED on everyones part when you invest your hard earned dollard YOU, are responsible for due diligence.Now I as a investor would look tp pick up properties a a fraction of there worth,just like the 1980's bank scandal that left the govt with big losses

Friday, May 19, 2006 7:50:00 AM  
Anonymous Anonymous said...

If this situation was repeated hundreds or thousands of times across the country by different individuals, then property prices are going to have another source of downward pressure.

My firm belief is there are mini-Dweks all over the place. You can't turn on the TV without a "No Money Down" get rich quick infomercial on...everywhere you go, people are talking about how much money they are making on their own house, their RE investments, or out-and-out flipping.

We'll see soon how it all will pan out...

JM

Friday, May 19, 2006 7:53:00 AM  
Anonymous Anonymous said...

This whole situation makes me think of the lovely development not far from where I live...lovely except for one house...which is vacant with grass up to my knees has a broken window and is falling into disrepair (mind you this is a new house). I fear that many of the properties involved in this mess will quickly become their neighborhoods eyesore. No question it will take YEARS to straighten this out and until these properties can be sold again with a clean title. Very Sad situation for all people affected including the completely innocent people that just happen to live near one of the affected properties that will soon be their neighborhood eyesores.

Friday, May 19, 2006 8:51:00 AM  
Anonymous Anonymous said...

Of Dweks and mini Dweks

As a longtime and intense observer of the local real estate scene you can rest assured that there are very, very few Dwek types out there. Simply put his real estate involvement takes access to hundreds of millions and there ain't that many hundreds of millions around.

If by "mini-Dwecks" we're talking about people who have something like $5-10mil in the game, the number is significant, but not outrageous and your talking almost exclusively about commercial real estate.

Dwek's role as a purchaser of single family homes is truly unique in my experience. The reward to risk level just isn't there from a financial perspective. As a business model owning 30-40 residential properties is just not sensible.

His relevance is that of the canary in the coal mine. He had the least room for trouble, so he got in trouble first. The real problem that is coming in real estate is not for the big (commercial) property investors, though they are going to get pounded, but for the dope who overextended to buy a property to flip or even a house he can't really afford to live in. That number is very big and in the next 6-24 months we're going to see some real ugliness.

To quote Warren Buffet: "It isn't until the tide goes out that you see who is swimming naked."

Friday, May 19, 2006 10:07:00 AM  
Blogger njcoast said...

Unfortunatly for Solomon Dwek, homeowners who are sitting on their overpriced listings will be blaming him that their houses aren't selling. It will be him instead of rising interest rates, over extended borrowers, ARMs, interest only loans, as well as a myriad of other conditions, that will be fingered as the cause.

Friday, May 19, 2006 11:01:00 AM  
Anonymous Anonymous said...

Just Zillow Home Prices in North Dover-Toms River

Houses here cost $300,000-$600,000 5-years ago... now some costing more than $1 Million !!!

Enjoy North Dover Property Revaluation next year !!!

Friday, May 19, 2006 11:13:00 AM  
Anonymous Anonymous said...

by mini-Dwek, I was thinking more of the under $5 million in property types with anywhere from two to a couple dozen properties that they are trying to flip or rent...

couldn't even venture to guess how many throughout NJ, but there will be more show up when "...the tide goes out..."

JM

Friday, May 19, 2006 11:18:00 AM  
Blogger new 200 Mbps BROADBAND over POWER LINES said...

Dwek's woes could have wide impact

He's a major real estate investor


More:
Just Zillow.com Solomon Dwek`s Real Estate Empire

Friday, May 19, 2006 11:19:00 AM  
Anonymous Anonymous said...

Snippet from the Wall St Journal real estate section.

http://www.realestatejournal.com/buysell/mortgages/20060519-simon.html

Friday, May 19, 2006 1:49:00 PM  
Anonymous Anonymous said...

http://www.realestatejournal.com/
buysell/mortgages/20060519-simon.html

Friday, May 19, 2006 1:50:00 PM  
Anonymous Anonymous said...

. Be It Ever So Humble: Never apologize for the appearance of your home. After all, it has been lived in. Let the trained agent answer any objections. That's the job of your Realtor´┐Ż.
Go here for more ideas.

Saturday, June 24, 2006 6:28:00 PM  
Anonymous Anonymous said...

You can do a lot to For example, curb appeal sells: do some landscaping. Plant some flowers. Remember that the front door greets buyers. Make sure it offers potential a bright, warm welcome.

Sunday, June 25, 2006 7:12:00 PM  

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