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Houses purchased for investment rise 65%

By Call it Crazy   Follow   Tue, 24 Jul 2012, 3:38pm   1,452 views   10 comments
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http://www.housingwire.com/content/reos-are-hot-commodities-opportunity-starved-investors

Snip:
....."Homes purchased for investment purposes rose 65% in 2011 as investors looking for a place to park their cash sought out bank-owned properties, according to the latest Foreclosure News Report for RealtyTrac.

Last year, 1.2 million U.S. properties were acquired for investment purposes, up from 749,000 in 2010.

"Hundreds of thousands of these decrepit properties can't be financed because banks won't lend money to regular homebuyers (or investors) to purchase them, leaving cash investors as the only buyers," wrote Octavio Nuiry, who composed the latest Foreclosure News Report for RealtyTrac......."

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So, is the positive growth in house sales coming from Jane and Joe SixPack or from the commercial investors??

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1. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   1   9:37pm Tue 24 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   That's just crazy. Nothing like getting an instant -6% on your "investment." Along with negative "dividends" in the form of property taxes, maintenance, and insurance. Parking cash in a bank account sucks with such low interest rates, but it's better than "parking" it in housing.

2. robertoaribas Follow Befriend (23) 55 threads 3,790 comments Scottsdale, AZ robertoaribas's website

   2   11:13pm Tue 24 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike   wthrfrk80 says That's just crazy. Nothing like getting an instant -6% on your "investment." Along with negative "dividends" in the form of property taxes, maintenance, and insurance. Parking cash in a bank account sucks with such low interest rates, but it's better than "parking" it in housing. Nothing like showing off how little you know... I bought a home July 6th for 80K, short sale. Built in 2005, original owners. I replaced all of the downstairs flooring which was crap wood laminate falling apart with 20 by 20 porcelain tile for $2K, repainted the terrible paint, and even replaced the laminate counter-tops which had burn holes on them with granite. (1600 with a new undermount sink too )Add in a new washer,dryer and fridge, and my total to recondition this fairly beatup 2005 build, last sold for $250K, was under $9k. So, I'm in it for $89K... RENTED, lease signed a few days ago, for $1100 a month... Lets See now HOA = $100 a month (gated community near downtown, and they even do the front yard landscaping) Insurance $750 a year. Taxes $800 a year. Even factoring in a months vacancy, $1000 a year in maintenance, and 10% to a partner to manage the rental, i'll make $7250 a year on my 89K. (and better after taxes, since you can depreciate rental property) what percent is that? 8.1% return, with no appreciation factored in? There is NOTHING comparable to this home for less than $130K on the market in any zip code anywhere near my house... Why did I get it cheaper? 1. it looked like utter shit when I bought it. 2. CASH purchase of a short sale. 3. quick action. I wrote my offer within hours of it hitting the mls. 4. guaranteed close. The seller doesn't make money, so I wrote out all contingencies and gave myself only 3 days to do all inspections. They simply wanted to beat the quickly approaching foreclosure deadline. that's how I role: make the house nice, rent to people who care, and wait the market out. Foreclosures and short sales will end in few years...

3. robertoaribas Follow Befriend (23) 55 threads 3,790 comments Scottsdale, AZ robertoaribas's website

   3   11:20pm Tue 24 Jul 2012   Share   Quote   Permalink   Like (1)   Dislike

4. dunnross Follow Befriend 28 threads 1,489 comments San Jose, CA Premium

   4   11:32pm Tue 24 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   robertoaribas says So, I'm in it for $89K... But he can't possibly know even less than you, because you don't know anything. The basic rule #1 of investing is that you paper profits only become real money when you convert them to cash.

5. dunnross Follow Befriend 28 threads 1,489 comments San Jose, CA Premium

   5   11:54pm Tue 24 Jul 2012   Share   Quote   Permalink   Like   Dislike (1)   Protected   Yes, and here is a picture of my house. Which one do you like better?

6. xrpb11a Follow Befriend (4) 2 threads 787 comments

   6   6:23am Wed 25 Jul 2012   Share   Quote   Permalink   Like   Dislike (2)   Provide the link to the county records showing that your story below is real. I'd like to believe you, but there's too much bullshit floating around these days.. robertoaribas says I bought a home July 6th for 80K, short sale. Built in 2005, original owners. I replaced all of the downstairs flooring which was crap wood laminate falling apart with 20 by 20 porcelain tile for $2K, repainted the terrible paint, and even replaced the laminate counter-tops which had burn holes on them with granite. (1600 with a new undermount sink too )Add in a new washer,dryer and fridge, and my total to recondition this fairly beatup 2005 build, last sold for $250K, was under $9k. So, I'm in it for $89K...

7. freak80 Follow Befriend (4) 52 threads 4,416 comments Corning, NY Premium

   7   6:25am Wed 25 Jul 2012   Share   Quote   Permalink   Like   Dislike   Protected   robertoaribas says Nothing like showing off how little you know... Well remodeling houses and "flipping" them is different than just using them as a place to "park" cash. Same goes for being a landlord. Obviously landlords can make steady cash flow from RE. Maybe I misunderstood the article. Yeah I put dunross on ignore awhile ago. His arguments weren't making much sense.

8. 37108605 Follow Befriend 1 threads 1,055 comments

   8   4:02am Sun 30 Sep 2012   Share   Quote   Permalink   Like   Dislike   freak80 says That's just crazy. Nothing like getting an instant -6% on your "investment." Along with negative "dividends" in the form of property taxes, maintenance, and insurance. Parking cash in a bank account sucks with such low interest rates, but it's better than "parking" it in housing. THAT is beyond crazy. Frankly, this article is so over the top nutcase anyone who would take that at face value deserves precisely what they get in the end.

9. JohnLaw Follow Befriend 1 threads 133 comments

   9   5:13am Sun 30 Sep 2012   Share   Quote   Permalink   Like   Dislike   robertoaribas says So, I'm in it for $89K... RENTED, lease signed a few days ago, for $1100 a month... Awesome deal robertoaribas! If I could find cap rates north of 10 in my areas I would be jumping all over it too. That is the price point that would motivate me into becoming a landlord. Unfortunately they are still in the 6 to 8 range with the decent ones closer to 6. Good luck!

10. pkennedy Follow Befriend (8) 28 threads 1,341 comments Redwood City, CA

    10   5:02pm Sun 30 Sep 2012   Share   Quote   Permalink   Like   Dislike   6 or 8 CAP rates are pretty good, especially if you factor in housing follows inflation. That is 6 or 8% above and beyond an inflation.