Our business requires us to purchase a lot of homes which we then perform extensive due-diligence and prepare for sale to our buying clients. This means we need to constantly be purchasing homes from a variety of sources including; bank foreclosures, motivated sellers, and bulk REO sellers. After being a real estate investor for nearly a decade now it is surprising to see the dramatic changes in the market in short periods of time.
For example, earlier this year we had the pick of the litter with the foreclosures abound and the buyers all waiting on the sidelines. This allowed for easy acquisition of investment homes. However now we are seeing tremendous competition for foreclosed homes. This is because of a number of reasons; buyer think we are at the bottom, rates are low, first-time buyer tax credits, and more. Even with foreclosures up 32% over last year, multiple offers are everywhere.
For you as a potential investor that means 1 of 3 things if you in buying mode.
- You’re already a real estate agent and have your work cut out for you. You’ll be sending in tons of offers in order to buy 1 house.
- You have an experienced real estate agent that will do this for you. Be prepared to be patient and miss out on a lot before you pick one up.
- You can buy from an investment company direct who already has an equitable interest in a property.
Knowing the current market will make the inevitable delays on aquisition easier. I’ve seen many investors frustrated right now because of the difficulty in aquiring property. Ultimately the deals are out there. Good ones will have competition. Be prepared to compete. This may mean paying over list price. The days of low-balling tons of offers are a thing of the past in most markets.
Tags: bank reos, equitable interest, foreclosures, investment homes, multiple offers
