Is anyone investing in higher end foreclosures?

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BetweenSuccesses Posted: 3 Nov 2009 05:37 AM

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Is anyone investing in foreclosures of single family homes at the middle to higher end of the price spectrum ($350K-750K)?  Any success stories? Concerns?  Dire warnings?

Bill Adams replied on 18 Nov 2009 10:38 AM

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In Austin, we have some who invest in this price range.  Like anything else, the money is made at the time of purchase, so if you are careful, you will be sucessful.  Warnings:  you will need to calculate the holding time carefully.

ian.douglas replied on 27 Nov 2009 09:54 PM

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Hi there,

You may want to take a look at this link: Real-Estate Trends Analysis .There are some cool tools to analyze real-estate trends from state down to zip level. There are also some cool analysis tools at the following link: Home Value analysis. It allows you to see what the current home value analysis for the area you are searching in is.

Hope this helps

South FL Real Estate Advisor replied on 27 Nov 2009 10:53 PM

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It depends on the market and the neighborhood that the foreclosure is located in. In many of the recovering areas in South Florida, there are bidding wars on the "good buys" and you need to have cash to be able to compete. The investors I work with either have a GC license or get an inspection so they know what they are getting in to. Also, be sure to protect yourself with title insurance just in case a lien doesn't show up on the title search.

MetroStarUSA-636-386-2000-BuyerBroker-MO replied on 5 Dec 2009 05:46 AM

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MetroStarUSA-636-386-2000-BuyerBroker-MO

This area of foreclosures in the higher price spectrum is one of the best investment opportunities.  You have to have capital capacity to hold long enough to find a high-end buyer that can bring 25 to 40% cash to get the higher underwriting standards required on loans for properties above $400k.

In Missouri, the prime market over $400k has 3 to 5 times the "Time On Market" than properties under $200k.  In some zip codes, you see a 15 to 48 month supply of the higher priced homes versus 5 to 9 month supply for those under $200k.  Buyers are few and far between, but the banks will heavily discount these prime properties more.  You can get a $4M home in 63005 for a $1M to $2M discount, then wait for the next ball player to come to town and you can make a lot of money.  Some banks will want to place a deed restriction on the  title transfer for 3 to 6 months to keep you from competing with their inventory disposition. This anti-Flipper provision actually helps the owner-occupant with more discounts for not putting the property back into the market.

Another unique feature of the prime property market is that most of the high-end inventory are privately placed outside of public signed marketing that exposes the home to vandalism and break-ins.  Select a broker that has contacts in this "Silent Market".  Banks prefer direct placement to a known qualified purchaser being professionally represented by a Buyer's Agent. 

Good luck the distressed prime property arena is not for the faint hearted.