Profiting from Foreclosures Thread.

Discussion in 'Chit Chat' started by Esq Esq Esq, Sep 29, 2008.

  1. Has anyone jumped into the foreclosures market?
    I know 3 years ago every idiot and their mother was doing it, with all those late nite informercials so it made no economic sense, but now I think there is MUCH more supply than demand - even from those who flp em-.

    Cost of carry got higher and leverage is not extended (easily) anymore?

    For a cash investor - may not be a bad play?

    I know this isn't trading securities, but its trading nonetheless - this could be the official thread on foreclosure market.
  2. Mecro


    I think you're late to the party. Foreclosures, which has been a competitive business for decades, hit its sweet mark in 2005-2007. And that's for professionals who know the business, not some random joe shmoe that saw some infomercial.

    A) How do you plan to buy the foreclosed house?

    B) Who do you plan to flip it to?

  3. the 2005 - 2007 was the time of easy mortgages and that's why everyone was doing foreclosures. That was time when EVERYONE was in, and there wasn't much to go around.

    Now, it will be very difficult to get financing to buy a foreclosure property, therefore it will be mailny for cash-liquid investors. The "pros" are probably either getting foreclosed on themselves now at the worst, or stuck with properties that they can't sell at the best.

    (i sincerely doubt that there are many people in this game now, if there were - we wouldn't be in the mess).

    To answer your questions:

    a) through auctions. Although my fund has been getting offers to buy paper and packages directly from banks at firesale levels, but each package was 40MM plus and we didn't want to invest in this shit without enough due dilligence so we didn't

    I doubt the banks sell small individual packages at cheap prices - probably better to do at the auction? But I'm open for suggestions

    b) Not flip for a few years. There is no liquidity now - hence good markets. Ride it out for a few years (7 year real-estate cycle no?), or possible collect rent income or both.

    Again - this is for a cash - long term position(s)

    not a get rich quick scheme