Tag Archives: foreclosure

Highlands Foreclosure Listings are Bargains Worth Investigating

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It is entirely possible to think of a residence that’s been the subject of a Highlands foreclosure as the real estate equivalent of a cute, cuddly orphaned kitten or puppy—one that deserves to be adopted by a loving family. You can think of the bank as the temporary animal shelter. With a little tender care, the adopted foreclosure can resume its place in the neighborhood, and all is well…

Or, a Highlands foreclosure can be the real estate equivalent of a snarling mutt that turns out to be a menace to anyone who comes near it…with the possible exception of a wild animal trainer (the real estate equivalent would be a remodeling contractor—one with lots of time on his hands).

For anyone who might consider checking out the Highlands foreclosure listings in 2016, the paramount skill will be the ability to make sure any property they pursue is one of that first kind of ‘orphans.’ That’s because of the fact that the kind of quality protections that are taken for granted in a regular residential real estate transaction are not in force.

Since banks are under no obligation to disclose information about a Highlands foreclosure’s flaws, it is always a true ‘buyer beware’ situation. No matter what the time pressure might be, it’s imperative to make a physical investigation of any foreclosure offering as early as possible. The more thorough the inspection, the more confidence you will have that any budget forecast accounts for all the expenditures you are likely to encounter in the course of turning a foreclosed property into a move-in ready residence.

The good news is that despite the reality that the Highlands market has tightened up a good deal since the days of the real estate meltdown, foreclosure opportunities in Highlands are still coming onto the market. Since would-be bargain hunters are no longer intimidated by the fear of falling housing values, timing becomes important. With sharp-eyed competitors regularly on the lookout for promising foreclosure listings, it’s important to be alerted to new opportunities as soon as possible. In this regard, there is also another ‘buyer beware’ situation—this one having to do with some of the online dedicated “foreclosure” websites. Avoid any that wind up providing outdated and/or endlessly repeated ‘bargains’—for fees billed in advance. If you decide to try them out, see if they offer a free trial. You will quickly find out if you are being directed toward wild goose chases instead of what’s been advertised.

A better way to start is to give me a call. If you wish, I will be happy to include Highlands foreclosure listings along with other new entries as they come onto the market—as well as to offer the kind of prudent advice and guidance that helps turn ‘orphans’ into family-friendly residences. Highlands foreclosures may not be for everybody—but the rewards for those who are able to take advantage of them can be substantial!

Foreclosure Starts Continue Downward Momentum

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6-23-foreclosureIf you are one of those Highlands homeowners who has been gladdened to see property values continuing to rebound, you have also been pleased at the steady decline in the wave of foreclosures that were part of the global financial crisis. When the subprime mortgage crisis triggered widespread financial dislocation, many homeowners felt the repercussions. Every Highlands foreclosure that resulted weighed on neighborhood property values, which reflect the dollar amounts paid when nearby homes change hands.

Even most people whose livelihoods were unaffected—who kept their jobs or businesses and continued to make their mortgage payments without difficulty—could have suffered as a result. When the apparent equity of a home dwindled, so too was the amount lenders were willing to lend for refinancing. The comfort provided by fat home equity lines of credit (the HELOCs) suddenly melted when their maximums were cut, or even withdrawn altogether. HELOCs, after all, were a major component in the foreclosure phenomenon. The whole atmosphere caused confidence to be shaken.

But ‘buy low, sell high’ is a proven investment strategy—and ‘buying low’ is an opportunity that typically arises when fear is in the air. Many large institutional investment outfits looked at the situation and apparently asked themselves, what’s more “real” than real estate? They dived into the panic, buying up distressed residences in droves, paying rock-bottom foreclosure prices.

For many homeowners, though, the real effect was psychological. After all, when your major asset is your home, any Highlands foreclosure can be seen as having the effect of bringing your apparent net worth down.

RealtyTrac is the national scorekeeper for foreclosures and REOs (Real Estate Owned, or bank repossessions); and last month they continued to provide comforting news. Although there are ups and downs in the month-to-month stats, the overall trend continues to decline from the high in September 2013. In fact, there was a small uptick in REOs in April, which might seem like bad news; but REOs are actually completed foreclosures—at the same time, foreclosure starts continued their long slide downward.

Daren Blomquist of RealtyTrac was quoted with more good news, confirming that “the overall increase in foreclosure activity in April is a continuation of the clean-up phase” of the housing crisis. But even better was this: “Foreclosure starts nationwide are now running consistently below pre-crisis levels.”

It does seem as if this season is a choice time for sellers to enter the revived market. If you would like to explore the possibilities for your own property, or are ready to start the search for a Highlands home of your own, please do give me a call!

Highlands Foreclosure Investors Still Compete with Out-of-Towners

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4-22-foreclosureYou would think the outside competition for Highlands foreclosure bargains might have up and disappeared by now…but no! As The Wall Street Journal described it last week, the shrinking number of foreclosure opportunities hasn’t driven Wall Street’s professional investors completely out of the market. But new techniques are altering their approach.

Local Highlands foreclosure investors have had to worry about a previous incursion by big national private equity investment firms. In the aftermath of the real estate bust, sales of distressed properties assumed an ever-larger proportion of real estate activity. National firms seized on the growing supply of cheap foreclosed homes as a ‘sure-thing’ trade for investment firms backed by money from private equity companies who wanted ‘in’ on real estate.

Wall Street knew full well that depressed real estate prices were a temporary phenomenon. They would swoop down, buy foreclosures en masse, rent them out, and wait for the bounce-back. Highlands foreclosure investors suddenly had to worry about bargain-hunting by the national firms, instead of just the usual local competitors. It took agility and cash to compete with some very deep pockets. Even where they weren’t active, their impact was felt.

But by last summer, the New York Times was headlining “Investors Who Bought Foreclosed Homes in Bulk Look to Sell.” Where, at the height of the foreclosure onslaught, a full 50% of home purchases was made up of foreclosures and short sales, by this February, the percentage had retreated to barely 11%. Companies like Waypoint Real Estate Group began quietly shopping for buyers as they took their profits and tiptoed away…

So could Highlands foreclosure investors breathe a sigh of relief, knowing the big boys had carted off their wheel barrows full of cash? You’d think so, but not so fast! The WSJ article describes a new phenomenon from outside. “Racing to Buy Homes Sight Unseen” was the headline. Enter the speed-based investors!

Just as trading firms had developed systems that made equity trading a competition between banks of computers trip-wired to trade at the speed of light, a milder phenomenon is emerging in foreclosure investing. According to the Journal, one example is the investment trust executive who no longer goes to public auctions to find buys. It described a recent morning in which it took him seven minutes to bid on a Georgia home “he had never seen.” He uses a quantitative data analysis program as a way to accelerate searches for the “dwindling supply of available homes that can be transformed into rental properties.” In other words, some of the big buyers are finding ways to stay in the market.

But Highlands foreclosure investors don’t really need to throw up their hands. Although the data analysis programs are getting better, local knowledge and on-site evaluations should continue to give sharp Highlands investors the kind of fine edge that national data maps and renovation cost generalizations can never quite match. It’s like the difference between a perfectly-engineered robotic customer service system…and a knowledgeable human: no contest.

Highlands foreclosures may be less omnipresent, but without question they continue to represent great investment potential—and not just for the national investment firms. If you’ve ever thought you would like to hear more about today’s opportunities, call me for an on-the-ground analysis!

Changed Highlands Foreclosure Picture Still Presents Opportunities

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2-20-foreclosureThe Highlands foreclosure situation is a good deal different from what we were discussing a few years ago when the tidal wave of 7.3 million foreclosures and short sales swept the nation. When The New York Times “Dealbook” recently pronounced that the supply of cheap foreclosed homes in America is dwindling, it came as news to…well, no one.

Let’s face it: Highlands investors wouldn’t need to look up the latest statistics to guess that number of offerings would be down. The continuing rebound in home values, slow but steady improvement in the overall economic picture, and even just the passage of time has to mean that the glut of subprime-crisis-era foreclosures would have worked their way through the system.

But there are always new foreclosures, and for anyone hoping to make a bargain buy in today’s Highlands foreclosure market, the same qualities that brought post-crisis success still apply today:

  • Knowledge of (or willingness to research) comparable neighborhood values
  • Realistic appreciation of rehabilitation costs
  • Decisiveness (willingness to act swiftly)
  • Ready access to investment capital

The principal difference in today’s Highlands foreclosure milieu is that far fewer are available, and the difference between market value and listing price has narrowed. There may be fewer competitors to worry about, but some are still out there, as always. Today sees fewer institutional investors—in fact, some are leaving the market altogether, taking their profits and selling out to groups more committed to long-term property management.

Aside from the qualities described, there is still no blanket formula for landing the best Highlands foreclosure deal. But among other observations, there are two that are worth considering.

First, despite the lessening of the impact institutional investors previously had on the market, it may still be necessary to prepare to offer more than the listed price. The dwindling number of foreclosed homes tends to create an imbalance between supply and demand. If other buyers are offering higher amounts than the asking price, it can easily result in a bidding war situation. As always, by researching underlying values, the best investors avoid foreclosure buys that wind up being little more than break-even propositions.

Another wrinkle to be aware of is the possibility of future cost increases. For instance, it can transpire that an investor succeeds in purchasing a property significantly below its true value, only to find that a reassessment by taxing authorities raises its property tax bill through the roof! Canny investors prevent this surprise by finding out how the local Assessor’s office sets rates and schedules appraisals.

The Highlands foreclosure picture changes constantly. If you are interested in the investment possibilities—or are looking for a buy on your next home—don’t hesitate to give me a call to discuss the latest offerings!

Year-End Review Shows Institutions Exiting Investment Picture

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12-31-investmentAt 2014’s year end, it’s as good a time as ever to look back over the real estate investment landscape to see if any new trends or directions may have become apparent. It does look as if one development in the country as a whole may cause ripples that could affect Sapphire real estate investment hunters in the coming year.

This is a development with roots that go back to the 2008 upending of the housing market. That triggered a glut of foreclosures, so that banks, already up to their vaults in turmoil, found themselves holding uncomfortably large numbers of repossessions. Bright-eyed executives at private equity firms and hedge funds were quick to spot this as a new opportunity: they could scoop up the repossessions for a song, rent them out, and then just wait to sell until the economy improved.

By 2013 The New York Times was reporting that the Blackstone Group now owned some 26,000 rental homes—with Colony Capital picking up more than 10,000 single-family residences. Warren Buffet had endorsed the idea; J.P. Morgan and Morgan Stanley had set up new real estate investment funds earmarked for the purchase of houses. Vague concerns about absentee investor landlords were waved away—this was like some kind of newfangled Institutional Investor Gold Rush, and as any ‘49er could have told you, in a gold rush, there isn’t time to worry about the details!

The main real estate investment targets centered on certain markets: Minneapolis, Atlanta, Detroit, Los Angeles, Las Vegas, New York, and Phoenix saw the most activity. In some regions, 2012 and 2013 saw bidding wars for repossessions and lower-priced housing, until by July of this year, The Times could report that in some areas “prices of the least expensive homes have more than doubled” in two years. As Forbes reported in 2013, “Wall Street has been bullish on real estate.”

Sellers (mostly banks) were happy. The institutional investors were happy. However, ordinary people looking out for the same kind of real estate investments found themselves competing with institutions. They were largely beaten out or priced out of the market.

By the end of 2013, though, those earlier “details” that had been ignored were beginning to rankle. Individuals whose real estate investments were hands-on propositions may not have had the same kind of problems, but a company like Colony American Capital had to report that it had found renters for only 51% of its properties. Many private equity firms and hedge funds began to report losses. As the CEO of Carrington Holding wrote, “We just don’t see the returns there that are adequate to incentivize us to continue to invest.” (Translation: Good-bye.)

With institutional investors bidding adieu to the areas they’d previously targeted, any repercussions felt Sapphire’s real estate investment landscape can only be to return to a more familiar market scenario—one where individual investors have the last word. If 2015 will see you in the hunt for suitable real estate investments in Sapphire, that should come as good news…as well as a good reason to give me a call!

Lake Toxaway Foreclosure Watchers Note Last Month’s Trend Change

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12-24-foreclosureLake Toxaway foreclosure watchers keep their eyes trained on the local market filings, but also stay aware of the national trends as a signal of what might be coming down the pike. Across the U.S., by the end of November there were nearly 112,500 foreclosure filings, which amounts to one out of every 1,170 homes.

The company that keeps an eye on such things, real-estate data source RealtyTrac, just offered a bar chart showing historical trends, which highlighted something that would be lost in the raw numbers alone. It showed about 27 (it looked like 27; the bars were tiny) little bars hanging underneath the “0% foreclosure start” line, meaning months in which foreclosure starts had declined compared with the same month a year earlier. Twenty-seven months is more than two straight years of fewer foreclosure starts (including default notice filings, scheduled auctions and bank repossessions). But the standout was one little line that stood bravely alone above the line—and it was for this November!

That doesn’t mean Lake Toxaway foreclosure rates are now destined to explode, but it is the first reversal RealtyTrac has registered in years. For potential home bargain-hunters, it might be a heads-up to keep their powder dry—and perhaps a reasonable idea to once more go over some of the basics that veteran Lake Toxaway foreclosure buyers generally agree upon:

Get pre-approved:

For anyone who wouldn’t be ready with cash in hand, when foreclosed homes are in the cross-hairs, it’s really imperative to have advance bank approval. When a good Lake Toxaway foreclosure value comes up, you need to be ready to act immediately. About 60% of foreclosed homes are financed—and pre-approval is the way to prevent a cash buyer from swooping in ahead of you.

Find a qualified real estate agent:

A competent agent—one experienced in dealing with Lake Toxaway foreclosures—does more than just put you ahead when it comes to the underlying values of homes in the area. Your agent can point out issues others may have overlooked with certain properties, help you navigate local procedures and red tape, aid with inspections, etc.

Focus on REO properties:

Lake Toxaway REO properties are foreclosed homes that have already gone through the foreclosure process completely, and are now owned by the lender. They are typically vacant, and are sometimes priced to sell since banks are incented to get them ‘off the books.’ It’s not universally the case, but REOs can be more straightforward to deal with than auctions, pending foreclosures, or short sales.

Check things out thoroughly:

Foreclosed homes often are in need of repair. Since lenders sell them “as is,” prudent buyers know to identify any major faults before making a buying decision. Good foreclosure inspectors will have a generator and other equipment available so they can test all of a property’s major systems.

Check for liens:

A foreclosed home can be burdened by pre-existing liens from utility companies, municipalities, and unpaid contractors. Knowing about them early helps estimate the total true value (and ensure they won’t cause your deal to fall apart).

Buying a Lake Toxaway foreclosed home can offer immediate value and equity to those who are prepared to make sophisticated inquiries. I offer my clients the kind of experienced teamwork that makes that happen!