Real Estate investors must to be confident in two areas if they hope to have any success –
1. Are there really deals to be had and can they find them.
2. Can they do the deals once they find them (strategies, financing, etc.)
The attached article clearly demonstrates the answer to question number one. The article states that 250,000 foreclosed properties changed hands in the 2nd quarter alone. That is a lot of deals but that isn’t even the good news; the good news is these 250,000 deals changed hands at a 26% discount to the market value. That is remarkable.
Foreclosures sell at 26% discount
By Les Christie, staff writerSeptember 30, 2010: 4:14 AM ET
NEW YORK (CNNMoney.com) — Homes lost to foreclosure now make up a quarter of the real estate market — and they’re selling at big bargains.
Nearly 250,000 residential properties in some stage of foreclosure changed hands during the second quarter, RealtyTrac reported Thursday. They sold for about 26% less than non-foreclosed homes, compared to 35% less in the first quarter.
A little more than half of these deals were of properties repossessed by banks, the remainder came from the ranks of short sales — where banks allow homeowners to sell for less than they owe on the mortgage.
There was much regional variation in the foreclosure sales data. Rust Belt states such as Ohio and Michigan had moderately or high levels of foreclosure sales, but the former bubble states is where foreclosures continue to dominate.
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In Nevada, they accounted for 56% of all transactions, the highest percentage in the nation. Arizona (47%) and California (43%) also had very high levels.
Foreclosure sales were much rarer in Iowa (4.4%), the District of Columbia (5.6%), Montana (6.4%) and New York (7.5%).
The sharpest foreclosure deals were to be found in Ohio, where foreclosure properties sold for 43% less than non-foreclosed homes. Kentucky’s discount was 41%, and California’s 39%.
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