With some of the weakest lending laws in the country, Northeast Ohio was among the many hot spots of the notorious subprime lending practices, which ultimately led to the housing crisis that would drag the American economy into the “Great Recession” of 2008.
In early 2013, with the full effects of the housing and foreclosure crisis still being felt, Andesite Capital Management collaborated with the Mortgage Resolution Fund (MRF), a national housing non-profit and FHA to execute a strategy that facilitated the purchase of 626 non-performing loans, with the express mission of assisting those borrowers and stabilizing the local housing markets. The Mortgage Resolution Fund provided foreclosure alternatives and assistance to struggling homeowners, while Andesite provided the capital and operational expertise to secure, inspect and rehabilitate properties that had been abandoned or released by the former borrowers.
By the fall of 2014 Andesite had invested $17 million into the Cleveland housing community. Over the course of this program Andesite has spent an additional $5 million improving the homes it has acquired. In March 2016, we created Andesite Property Management, based in Ohio, to oversee and manage our own portfolio as well as rental properties owned by other investors. We expect to have stabilized and to hold around 150 high quality single family rental homes in the Cleveland area by the end of 2017.
In total, we acquired 481 individual assets, but the impact of this program extended well beyond the initial borrowers and properties, and served as a major contributor towards lifting the quality and values of entire neighborhoods.
HomeUnion, an online real estate investment management firm, has named the nine best housing markets for single-family rental home investors in the first quarter of 2017. The article can be viewed here, with Cleveland ranking number one.