Yes. There is your answer. It will end. The market is still in the process of correcting itself. We are getting intel about the Major Real Estate owned players starting to bulk sale more of their inventory. Here is how that works.
If you have Cash – 15M (million dollars or more) – you may be able to play ball. Approaching the bank that is Bulk Selling their inventory, you bid on the “lots”. A lot can be as little as the bank wants as far as numbers of REO properties – typically they start at 50 and go up from there. 50 properties. The time frame for inspection and verification of occupancy is typically 5 business days. The investor may be able to pick up these bulk sales from anywhere between 40 and 60 cents on the dollar – that is a reduction from Fair Market Value.
Let’s me go with the higher number. Let’s say that the investor, bulk buyer, was able to strike a deal where he was able to purchase the lot of 50 REO’s at the .60 Cents on the Dollar. They could rehab, turn and list – and sell the properties at 20% below fair market value and still make a 20% return on their money. That means, for their initial investment, Minus the rehab and eviction costs, they would make an additional .20cents on each dollar they originally invested.
That further 🙂 means that buyers of real estate can relax, if this happens, the market will further decrease and inventory will rise. That is not such good news for sellers, but Time will tell. Stay tuned and Subscribe to our Real Estate Intel reports. click here.
Here are the locations of the Santa Clarita real estate updates: