Time for Real Estate Investors to Boycott REOs?
If any real estate investing firm collaborated to fix the real estate market and manipulate prices there would be a major outcry in the news, federal investigations and indictments. In fact some investors and real estate professionals have gone to jail for allegedly pumping up home prices. So why is it OK for mortgage institutions to manipulate the market by holding the majority of homes off the market and artificially pumping and fixing prices? It may be a smart strategy from a business perspective and the current administration may be grateful for the positive housing numbers it is producing as it makes them look better. However, it is again apparent that there are two sets of rules; one for banks who can afford billion dollar payoffs ‘settlements’ and another for everyone else. The message being sent is clearly “the ends justify the means”, at least until it’s your turn to be the scapegoat and don the orange jumpsuit to protect the big wigs. Obviously even though the REO market is getting heated there are still deals to be found among them, although perhaps not in the hottest markets where bidding wars are out of control. Still real estate investors need to be looking elsewhere in order to protect their profit margins, cash flow and keep up volume. There are all type of fabulous real estate marketing campaigns investors can jump on to find more deals, though turning to quality sources which are wholesaling real estate can be an equally profitable and often even more profitable and streamlined solution. Reputable companies wholesaling real estate know how to price their deals for investors to still make good spreads whether rehabbing properties, turning them into rentals or simply buying and holding for the long term. Savvy investors will also currently find unique and well-priced opportunities for grabbing up large areas of distressed properties which could be ripe for development and putting up luxury homes in the near future. However, it is important to assess the dangerous of property which is too cheap and complete due diligence to be aware of any costs involved in keeping them up to code to avoid fines.
Is it time real estate investors untied in boycotting bank owned REOs?