Wednesday, September 12, 2012
Larger Firms are Buying Foreclosed Homes Causing Small Businesses to be Outbid While low priced California Land is Still available.
Larger investment firms on Wall Street have branched off into buying foreclosed homes. Usually such a small investment would not be of interest to Wall Street but they are now buying these homes to rent them out and eventually sell them when the market improves. These firms are buying homes all over the country at the court house steps where most foreclosed homes are sold. We went to a few of these sales and attempted to bid on a property, but we were outbid. A home which might sell on the market for $100,000 sold for $85,000. A small operation may bid $65,000 for such a home as the cost to clean it up and make it ready for renting may cut into the resale value. Increasingly small mom and pop businesses get outbid by these new large capital investment firms. Small firms like at least at 20% yield on a home while the larger investment firm will take 10% yield. We have seen low end bidding homes slowly and then when the auctioneer says last and final the bid bidder (investment firm) bids it up and takes it. Many of these foreclosed homes have had squatters living on the premises, or broken windows, and doors. It causes security and insurance issues with the property. Many insurance companies require that you live in the state where your investment home is, or have a property manager on site. According to a recent news reports one firm bought over a 100 homes in a day totaling over $8 million. These large investment firms are raising money from investors to buy and mange these properties and they are backed with billions of dollars. Most banks currently sell foreclosed homes one at a time, and lots of them get pulled from the auction list as they work with the property owner to save the property. It takes a lot or time effort and money to buy these foreclosed homes, while very well priced ideal land parcels are available with little to no other buyers vying against you. We specialize in low price land opportunities in Lancaster and Palmdale, Ca. If we don’t have the property on our inventory then we will locate a suitable property that meets your needs. We work with solar firms, mitigation bankers, land bankers and individual investors. We can locate the best priced property for your individual portfolio. Call us at 213 500-9578 Vacantlanddeals.com