Their re-emergence is probably a necessary evil of the recovery process. I am seeing it every day. Banks are holding foreclosures, and not bidding past "lowish" formula prices. Investors are "at the ready" to swoop in and capture bargains. They are generally not "end-user" purchasers. They are the vultures who know value, and are hopeful that they can "sell" the property before the 30 or 45 day period set forth in their sales agreement. They either have a lot of cash, or they have access to hard-money lenders(no mortgage financing with traditional institutions need apply) who make short-term deals, with the interest rate many times dependent on how long it takes to "flip" the property in question.
For the rest of us, by that I mean people representing potential Buyers who actually want to live in the property they purchase, there are some opportunities here. The beauty of the "foreclosure flip" is that there is usually a way for your Buyer to benefit from dealing with these "middle-men". They are not looking for exorbitant profits; they only want a decent return on their investment. The more they leverage; the faster the deal moves, the lower the end price to the end user.
For the end user, the key word is "preparedness". Your second sale foreclosure Buyers can win if they are "bulletproof" at a certain price point. That means they have their credit in good shape, the down payment all set aside, and have met other underwriting criteria. They are pre-approved with a capital "A". If they are ready to roll, there are bargains galore in this scenario.
In the end, we need "foreclosure flips" to rid ourselves of the overload in real estate inventory. The dream of home ownership for everybody was just that; "a dream". People have owned homes with too much debt, too high taxes, too many maintenance issues. They were shoe-horned into situations which were almost always certain to fail. Now, they are losing these homes and many are going back to a rental status which is more manageable. The foreclosure "vultures" play a part in cleaning up the inventory. They are also "cleaning up" financially, but that is a story for another day.
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