If you've been looking all over the Internet today, you'll see that housing sales are going up. Of course, they are. It is the investors that are buying in areas where the banks are releasing all the foreclosures. This is not what is happening in my area, Los Angeles. At this time, there are very few bank owned properties that are being released for sale. The banks are just letting them trickle out.
These foreclosures are going mainly to investors who are purchasing the properties for cash. Some are flipping the foreclosures and using hard money. A hard money loan is where you get the cash from a private party, or a company, that will give you the money for purchase and rehab. For this you pay upfront points and a high interest rate expecting to pay it back as soon as the house is sold. Of course, they could also refinance after six months when they show that the rental is more than the purchase. They have to purchase it for 60% of their value. There are markets that are selling for 1/6th of the value than they were a year ago.
I know so many investors who are in our market buying homes in Las Vegas. There are 22,000 that are bank owned now. A lot more are coming on the market and more are heading for auction.
I can't figure out why they are letting prices drop in one market and in others releasing in drips and drabs, and if you have any idea let me know. I feel that they should release the foreclosures, sell them to homeowners and let's get our communities thriving again.
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