Real estate is changing at an ever increasing pace. A few years ago, you were hard pressed to find an abundant supply of Bank REO’s on the market. Short sales were the rave and houses were still selling so most potential foreclosures were either going through a short sale or were sold before the banks got possession through foreclosure.
Then last year the banks all but stopped accepting short sales and the number of new foreclosure filings started to increase at record paces. This caused a flood of foreclosures reaching the banks REO department and our focus shifted to finding good, no great deals by searching the MLS for bank REO’s. We were able to acquire great deals on foreclosures and rehab them for resale.
Then last fall there were so many foreclosures that we were no longer able to resell the properties retail so the new focus became acquiring these bank REO’s for rentals. This was a good strategy for many because we could buy the properties cheap and rents remained high. This gave investors good cash flow. And that is something we haven’t seen in many years.
Recently though we have been experiencing something quite different. With all the foreclosures on the market, everyone wants in on the good deals. That includes first time home buyers who have a huge advantage over investors. Their 1st advantage is that they can get an fha.com" target="_blank">fha loan which only requires a 3% down payment compared to the 30% investors must put down. Their 2nd advantage is that they get an $8,000 tax credit just for buying. Their 3rd advantage is that they qualify for the numerous first time home buyer rehab loans available through most cities and charitable organizations.
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