City of Orlando is getting into the house flipping business?

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826

There was an interesting story in the Orlando Sentinel yesterday about how the City of Orlando will be using $6.7 million of federal grant money to buy, fix up, and re-sell approximately 20 houses and hold 11 others as low-income rentals.  This grant money was divvied up in the same law that raised the FHA buyer contribution to 3.5% and killed Nehemiah down payment assistance. 

           

Doing some quick math means that they will be paying approximately $216,000 per house.  Considering that the median price in Orlando is $180,000 as of October 2008, it sounds like they are targeting the fancier neighborhoods as opposed to the working class areas.  Of course maybe the city is simply doing what government is good at ... overpaying for things.  Who knows?

It does seem pretty interesting that the city is getting into the real estate investing business.  I hope the city doesn't end up getting stuck with 31 vacant eyesores like so many other Central Florida investors have done.

Orange County is planning on buying 28 homes with their share of grant money. Considering there are approximately 15,000 homes for sale in Orange County and probably 1/3 of them are in foreclosure in some way, this home buying venture seems like a very minor effort in the scheme of things.  Kind of like a band-aid on a gunshot wound. I guess the government has to make it look like they are doing something productive. 

Well they have to spend your tax money on something now don't they? Hopefully at least this will generate 31 + 28 commissions for area Realtors(R). I wonder if Mayor Dyer knows how to get a short sale approved?

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Rob Arnold - Your full service and investor friendly Realtor ® in Orlando and Central Florida.

ABR, CPL, CRB, CSP, GRI, Managing real estate broker, Licensed mortgage broker, Notary Public

407-389-7318 / 1-877-389-7318 www.SDRhouses.com/ We Buy Houses Florida

We sell foreclosures, short sales, and bank owned REO properties throughout Central Florida. We sell and list Central Florida real estate and Orlando real estate. Free list of foreclosure and short sale houses available.

I also provide flat fee MLS listings, For Sale By Owner, and menu-based services in most parts of Central & South Florida, the Space Coast, and the Treasure Coast including Orlando, Winter Park, Maitland, Ocoee, Winter Garden, Apopka, Altamonte Springs, Casselberry, Longwood, Winter Springs, Oviedo, Lake Mary, Sanford, Deltona, Debary, Deland, Mount Dora, Eustis, Clermont, Kissimmee, Winter Haven, Lakeland, Tampa, Sarasota, Bradenton, Miami-Dade, Fort Lauderdale, West Palm Beach, Port Saint Lucie, Melbourne, Daytona Beach, Ocala, Gainesville, Volusia, Brevard, and more.   

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Rainmaker
300,275
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes

They are actually spending less then that per house. I helped seminole county put there their list. They are using charity organizations to purchase the homes and sell them. It's really ass backwards the whole thing. We have been trying to change their minds about the whole thing and go to Tallahasse.

Nov 19, 2008 11:21 AM #1
Rainer
68,711
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

I had heard about this from a mortgage friend of mine.  She said the individual counties were using grant money to buy REO homes.  She said she's (of course) getting more info but that it really seemed to her like a goofy?/stupid idea...  Sounds like it really IS not the smartest use of money. 

Nov 20, 2008 01:43 AM #2
Rainmaker
236,386
Debbie Summers
Charles Rutenberg Realty - New Smyrna Beach, FL

Rob - Government Housing?  I read the article too... I was left shaking my head.

Nov 21, 2008 04:48 AM #3
Rainer
68,711
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

Tomorrow in Tallahassee, looks like they're having more meetings about this crazy idea.  For instance, for Orange County, they have some money to use to buy REO homes, will have a third party rehab them, then re-sell them--resulting in a 40% loss to the county.  That means the government will be throwing away 4 of every 10 dollars in this supposedly helpful strategy.  Actually, the FHA 203K "rehab" loan can do the same thing and NOT be throwing away money.  Rather than buy houses, that money could be chunked down to $5-$30K per Buyer through each county to bring almost-okay homes up to standard and habitable (or even move-in-ready!) and each county could help LOTS of people get a nice home rather than buy fixers, have someone else fix 'em, then sell at a LOSS.  Ugh!  Bureacracies have issues.  Loss of money is NOT smart.  Huge loss of money is really, really a bad practice.  :)  Hope the meetings/talks result in some changes to the proposals.   

Nov 23, 2008 02:29 AM #4
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Rob Arnold

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