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Tag: "REO"

Short Sale Discounts Growing

The discounts that banks and lenders are taking on short sales is rising. At least that is what the latest data from the LPS Home Price Index seems to indicate.

Since April 2007, when short sale discounts averaged only 10% while bank owned foreclosures sold for 19 percent discounts, the short sale discounts have jumped to 23% while foreclosures are now selling for a 29% discount.

These numbers are nationwide averages so it will be necessary to research your local markets. However, it appears that short sales have become a more rewarding target for both investors and retail buyers. The difference in discounts can often be easily outweighed by higher repair costs on foreclosed properties who are frequently vacant for an extended time or even vandalized, while short sale properties may be found in much better condition.

Where do you  find the best deals in your local market? Leave a comment below!


Flipping Foreclosures – The Best Gameplan

When setting out in the business of flipping foreclosures, real estate investors can pursue different strategies to maximize profits.

But how can you determine upfront which one will work best?

Among the different strategies are:

- Buying houses that need a lot of fix up work for bottom dollar, add value by fixing and resell
- Buying houses in good condition that need little work and sell either as is or after a few improvements have been made
- Buying high-end homes that have a high dollar amount of profit potential
- Buying low-end homes that have limited risk exposure

And many more…

All these strategies have a different mix of appeal, risk, competition, need for capital. I read recently on Investor’s Business Daily that the strategy to sell high is a great one, and to be able to do that the house should be nice, and in good condition when you buy it.

A quote from that article states that “Nice foreclosed properties are harder to find. The number available to foreclosed-property investors has slid 25% to 50% in the past six to eight weeks, he estimates. And competition among flippers has heated as large companies have gotten into the market to become landlords.”

This is the case in Riverside County, one of the most depressed areas in the country, second only to some counties in Florida.

Profits are waiting in each of these niches. Don’t hold yourself back thinking this or that strategy is the only one or even the best one. Choose the ne that’s most appealing to you, do some research and start moving.

What is your favorite foreclosure flipping strategy? Leave your comment below.

 


Predicted Foreclosure Tsunami Still At Large

The new wave of foreclosures, termed yet again as a “foreclosure tsunami”, and predicted by many major analysts for the past 6 months or so still has not arrived in the overall real estate market.

The WSJ cited data released by LPS Applied Analytics and CoreLogic, which shows that the waters are still relatively calm.

Home repossessions nationwide are at about the same levels of last year, and still below the peak set in 2010.

In many markets, the turn-around time of bank repossessions coming back to market and sale as REO inventory is surprisingly short, sometimes as little as four to eight weeks go by between the foreclosure auction and re-listing.

Overall, the scare and scarcity tactics of the media seem to benefit active buyers at this point.

What are you observing in your own market? Leave a comment below!

 


HUD Waives 90-Day Seasoning

It has been kind of expected among real estate and mortgage professionals. Today came the official announcement from the HUD office.

As of 2/1/10, FHA buyers can buy properties that have been owned by the seller for less than 90 days.

Of course, there are some strings and conditions attached. Watch this video for details…


Resources:

Release text

PDF of detailed conditions

What do you think about the impact of this temporary waiver? Engage and leave your comment below!


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