Reply by 101livescan on 8/22/10 11:10am Msg #349977
Re: There is no money left over here
Good one, Philip. Most of the foreclosures I have revert to the bene. Those that go to auction for the swarm of investors are properties the bank doesn't want to deal with, usually having to do with demographics and soft market. I did have one with $330K debt go to auction for $80.6K, not a bad deal, but there are no jobs, hard to buy when you have no money. So investors end up holding for longer than they want to.
|
Reply by PAW on 8/22/10 7:52pm Msg #350035
Re: There is no money left over here either
Numerous foreclosures sales of bank owned property have equity. The bank just wants their costs covered by the sale. In that case, the buyer gets the equity.
Take for example a house, valued at $200,000 with an outstanding mortgage balance (including all fees and foreclosure costs) of $150,000. The sale nets the bank $125,000 and has to eat the other $25,000 as a loss on the loan. The buyer pays $125,000 so essentially, they purchased a $200,000 house for $125,000, thus having $75,000 in equity.
There are plenty of investors who are buying up these properties that have sale prices (due to foreclosure or other reasons) way below their market value. The investor fixes up the house if necessary, and places it on the market at the fair market price. In time, the house may sell. The investor is aware that, in this area, it may take over 2 years before the house sells. But the owner has invested in that property and often takes a healthy profit for doing so. Here if Florida, we have one such person who invested heavily in the declining housing market over the past 5 years. (The person is running on the FL democrat ticket for US Senator.) He has made substantial profit from his investments. And so have many others.
|