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  Hard Money Blog
  By Vanguard Hard Money
   
 
All posts tagged 'court-auctions'

REO / Rehab Purchase Market is Getting Crowded

by Carla Palmer 26. September 2010 14:28

 

Fannie Mae’s “First Look” program and HUD’s “Neighborhood Stabilization Program (NSP)” give state and local governments the right to buy foreclosed properties before they go on the market.

First Look restricts offers during the first 15 days to only those from owner-occupants, public entities or their designated partners. Offers from investors can be submitted, but won’t be considered until after the initial 15-day period.

Buyers who qualify under First Look or NSP may also be entitled to a discount of up to 10% off the appraised market value.

On top of that, many professional investors are now channeling their funds into California’s collapsed housing market, buying foreclosed homes at distressed prices and hoping to quickly refurbish and sell the homes for a profit.

In the past, the typical “flipper” was an amateur using lines of credit or savings for an investment property. But professionals, primarily private equity funds and groups of wealthy individuals, have increasingly entered the field, driven by a lack of investment opportunities elsewhere.

Public auctions of foreclosed properties are held daily on the steps of local courthouses, and are heavily attended by pros.

This influx is driving auction prices higher and making profit margins tighter. The bidding process can be fierce, and oftentimes bids are made on homes that have not even been inspected in order to gauge repair costs. Many of these homes are also still occupied by the original owners.

Despite these barriers, opportunities still do exist for the “little guy”. 

- Carla Palmer

 


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