February 8, 2014
In the end of 2012 there were significant increases in prices for properties in the Midwest for many reasons, the buildup of a trend in the real estate market for flip properties in the Midwest market further focused the market interest which contributed to large scale investor interest in distressed and foreclosure properties this quarter.
Since there is generally severe competition in bank reclaimed properties and listings do not lie stable for too long, to be scooped up by businessmen wishing to invest, most investors tend to look toward pre foreclosure properties to find reasonable bargains to invest in for their flip businesses.
Owners of distressed properties who are aware of the fact that they still have the possibility to sell usually put out listings and attract buyers at good offers and some homeowners go so far as to actually include minor repairs as part of the sale, it makes for a very reasonable deal for potential investors as part of their work that needs doing gets included in the sale of the property itself.
Considering the movement of the market in general and the rise of awareness in for buyers and sellers regarding distressed property in the Midwest the trend has shifted to an upswing with highest number of distressed properties sold in the first quarter than the last 5 years.
Considering that investment into distressed properties is rising large scale investors are scooping up entire inventories of REO properties directly from banks at dirt cheap rates to flip and put back out on the market at close to retail values, the investment trend further fueling the increase of interest in property purchase and sale thereby contributing to higher property rates.
The new entrants into the business, since they can’t complete with the buying power of the large investors try to scoop up the properties before they get reclaimed by the banks taking them out of the reach of wholesale distressed property buyers.
It is this large number of independent flip enthusiasts out to make a quick buck that don’t have the cash to purchase large inventories of short-sale homes that end up  consuming the available distressed properties that are still in control of homeowners.
From an investment point of view if you look at it, it makes sense to scoop up bank owned properties as they cost the least, since banks are willing to let go of the homes at less than the past loan balances on the home, but since the negotiation of single REO properties is moving out of the reach of the normal investors, as banks move toward the trends of dealing in wholesale for their REO inventory small investors are fishing upstream to find the right niche to consistently make a good buy and plan a good flip to make a quick buck.
It provides a win win situation for both the distressed property homeowners who wish to make a little profit on the sale and get out of mortgage, and for the businessmen who wish to find properties to flip, sure the properties might cost a fraction more than REO properties, but at the end, getting an inventory to flip is all that matters, and with prices at a steady upswing, and sales at an all time high, it’s the right time for both sellers and buyers of distressed property in the Midwest to make their moves and secure the best deals.