Wholesalers Flood Poor Neighborhoods Looking For Distressed Homeowners

Zubu Brothers ^ | 5-30-2021

[Flick Lives]

For the first few nanoseconds, I read the headline, and took it literally. “Wholesalers FLOOD Poor Neighborhoods!”
Then I thought, ‘That can’t be right. Doesn’t make sense!’

—

I read...

“Wholesalers Flood Poor Neighborhoods Looking For Distressed Homeowners”

and lapsed into Forest Gump Mode; “I did not know the homeowner was missing”.

[narses]

That is not the question, btw. See they already inflated the money supply by a third, and most of that cash is sitting in pools both light (banks, for example) and dark (hedge funds, etc) and not moving. Velocity of money has stalled. If the spillage is spread out over five years it will be a mild case of inflation, if it roars out fast, katie bar the door!

[Rebelbase]

I-buy-homes type people only pay you a few thousand over what it takes to payoff the mortgage and keep you from foreclosure.

[Flick Lives]

Cash flippers buy, put in $10K of fix ups, sell for $20K profit to:

A cash flipper, put in $5K of fix ups, sell for $20K profit to:

A cash flipper, put in $2K of fix ups, sell for $20K profit to:

You guessed it - and all in one month.

—

Tulips!

[PUGACHEV]

No, we are no where near the top of the market, if only because real estate is not immune to inflation.

[Flick Lives]

My fear is that interest rates will be going up soon, so the time to buy is NOW.

That's sort of the current housing market feeding frenzy in a nutshell. But consider, if interest rates rise, that will cause house prices to fall. It is a rule of thumb that a 1% rise in rates causes a $10 percent drop in house prices.

So that $300K house at 3% becomes a $270K house at 4%. The net net is probably going to be the same for the months payment and you can actually put down less money to meet a 20% down payment.

In some ways you're better off buying in a hight interest rate environment. Less competition, lower down payment (as mentioned), the value of the home will rise if rates fall, and you could eventually negotiate a new home loan at a lower rate in the future.

[lee martell]

lol!

[monkeyshine]

Yeah well those HOA nazis are ne’er do well busy bodies. We had the neighbor come over a few months ago. They sent their kids for some reason, maybe to soften us up? They wanted to install solar panels on the roof. OK, whatever floats your boat. But they needed the signature of all the neighboring houses to approve before the HOA would agree. Like, what? It’s your house! Install whatever you want! Took the installers all of about 4 hours and nothing more than some screw brackets installed to mount the panels. For some reason we all needed to approve the sound of electric screwdrivers.

[Dr. Sivana]

As interest rates go up, home prices come down.

In theory, and to a degree. If commodity prices stay high (e.g. lumber), prices will stay higher as the cost of building goes up. I am getting a 70's vibe, here (stagflation), only without the high interest rates (yet).

[Dr. Sivana]

In some ways you're better off buying in a high interest rate environment. Less competition, lower down payment (as mentioned), the value of the home will rise if rates fall, and you could eventually negotiate a new home loan at a lower rate in the future.

My area, Phoenix, is being flooded by Californians with cash left over from their sold houses. I have also lived long enough to see home prices remain stable during stagflation (late '70s in CT) DESPITE high interest rates.

In any event, we need a house now, and rentals are also skyhigh. Other parts of the country may respond differently.

This is what gets a listed price of $165,000 in Phoenix right now.

https://www.zillow.com/homes/for_sale/7523438_zpid/?utm_source=email&utm_medium=email&utm_campaign=emo-instantsavedsearch&rtoken=671a4fe3-e49d-48ce-90b2-1c82b19cc16b~X1-ZUsxkvc9vn4efd_ahuyq&utm_term=urn:msg:2021052316114911fa80d9bee8ee28&utm_content=20210523-forsaleimage-PSS&searchQueryState=%7B%22usersSearchTerm%22%3A%22South+Mountain%2C+Phoenix%2C+AZ%22%2C%22mapBounds%22%3A%7B%22west%22%3A-112.1059652175441%2C%22east%22%3A-112.03148563761856%2C%22south%22%3A33.383784255244464%2C%22north%22%3A33.42731223047899%7D%2C%22regionSelection%22%3A%5B%7B%22regionId%22%3A267971%2C%22regionType%22%3A8%7D%5D%2C%22filterState%22%3A%7B%22price%22%3A%7B%22min%22%3A0%2C%22max%22%3A370000%7D%2C%22mp%22%3A%7B%22min%22%3A0%2C%22max%22%3A1228%7D%2C%22beds%22%3A%7B%22min%22%3A3%7D%2C%22ah%22%3A%7B%22value%22%3Atrue%7D%7D%2C%22mapZoom%22%3A15%2C%22savedSearchEnrollmentId%22%3A%22X1-SSkgebalmxmyjn0000000000_1r7kj%22%7D&3col=true

[Dr. Sivana]

“6049 S 19TH Pl, Phoenix, AZ 85042 | MLS# 4344943 | Redfin... › Phoenix › home 3 beds, 1 bath, 941 sq. ft. house located at 6049 S 19TH Pl, Phoenix, AZ 85042 sold for $35000 on Mar 29, 2010. MLS# 4344943. Ranch charmer offers 3”

There were a lot of those after 2008. Today that house (in decent condition, and it looks okay on the outside right now) would go in the mid-to-high 200s, despite being in a rougher part of South Mountain.

[Organic Panic]

I wonder if my pimping career would work with a similar sign...

[Pining_4_TX]

My husband and I thought about getting a reverse mortgage on our place, but we figured our landlady might object.

[lee martell]

Yeah, I don’t see her getting all that enthusiastic about it.
Very creative thinking on your part, though.
Consider all possible solutions.

[Pining_4_TX]

That’s me... always thinking! ;-)

[Big Red Badger]

I’ve rented all
My life,now I’m Retiring
and want a place in
Central AZ. Rent their is
High but a park model with
A lot lease of 400 a month
Seems my best option.
I call it Vacation Home
But I’ll be settled in
By October as an Owner!

[Lurker]

“It’s like living in a gold mine.”

Where do you keep the gold?

L

[lodi90]

There were a lot of those after 2008. Today that house (in decent condition, and it looks okay on the outside right now) would go in the mid-to-high 200s, despite being in a rougher part of South Mountain.

---

We were looking in Phoenix at that time. Lots of 2-3 year old homes under $100k then. We ended up in Jax, FL and don’t regret that decision at all. I grew up in Norcal and could see exactly what road AZ was headed down.

[Dr. Sivana]

JAX is a good choice, based on my limited time there. We need a dry climate and a large traditional Catholic community. PHX worked better for us. I wish we moved here ten years ago, instead of three.

[blueplum]

and the dark side? If one refuses the mountains of mailer offers and unsolicited phonecalls, some will take offense and report you to the county for ‘unmowed lawn’ or ‘trash in yard’ or some other petty complaint. The county then sends out a 14=day notice letter that takes 7 days to receive, and subjects the owner to fines in the 4-500dollar range for ‘an inspection’. For the flippers, it’s a no-accountability game to wear the owner down; for the county it’s revenue targeting the poor - and the county knows almost all the ‘complaints’ come from ‘realtors’. One guy I know was cited for having a tire against the side of his house towards his back gate, well away from the street. Just one tire. In a blue-collar neighborhood with no HOAs.