Spokane Bank Owned Homes: Disappointing For Some Investors.

    Ever heard the “Lipstick on a Pig” saying?  I think wikipedia says it best, ” a futile attempt to disguise the true nature of a product.”

    In an attempt to increase their return and appeal to owner-occupied buyers, many banks are adding lipstick in the form of carpet, paint, appliances and in some cases landscape to depressed homes they have foreclosed on.   Investors looking for sweat-equity in bank owned homes are feeling pushed out of the market place, and rightfully so.

    Many investors became accustomed to trash-out homes needing much more cosmetic surgery than just lipstick alone (to keep the analogy going).  These homes have been flooded (an action by the tenant to plug an upstairs toilet or bathtub as they leave it running and abandon the house), or have placed multiple holes in the wall, rip out the appliances, or in some cases take the air conditioner or even the entire furnace.

    But lately, we’ve been seeing holes patched, carpet replaced and in some cases a high efficiency furnace placed in the property to attract move-in buyers.

    Investors whose bread and butter was rehabbing bank owned homes for profit are going back to the drawing board.  Where an investor could once purchase a home for 60 to 70 cents on the dollar, the end user home buyer is now able to purchase the home for 85-90 cents on the dollar with the minor repairs completed, netting the banks much more with only a minor investment in most cases.

    What now?

    My advice is to watch the Bank Owned Home market carefully jump at the right opportunities, but diversify your time into non market home opportunities.  Short-Sales, distressed homes, burned-out landlords and many other opportunities out there.

    For a list of properties IN foreclosure and some great ideas, please contact us!  [to prevent spam, please use our comment form on the contact page].

     

     

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