Low-Cost Foreclosures Attract Investors

The influx of foreclosed homes on the market is grabbing the attention of investors. Bob Diamond’s system of buying foreclosures is one of the best and most complete programs on the market. For more information on a complete range of foreclosure and bankruptcy topics, see my web-site at http://investments-in-foreclosures.com

According to a homeownership survey released Wednesday by Move.com, the number of consumers interested in investing in real estate has doubled since March 2009. The number of buyers planning to purchase a home as an investment property increased to 12.1 percent, compared to 5.6 percent just seven months ago. Buyers purchasing foreclosures account for 25.3 percent of those interested in purchasing a home, the survey said. Of these buyers, 42 percent are purchasing properties as investments.

As investment properties, 13.2 percent of buyers intend to convert foreclosures into rentals, 11.3 percent will fix them up for resale, and 17.4 percent plan on using the property to house a family member until the home can be sold for a profit, according to the survey. Through a combination of deeply discounted purchase prices and stable appreciation rates over the next five years, the Move.com survey found that foreclosure buyers are expecting to profit from their purchase. Paying 20 percent or less than market price for a foreclosure is expected by 58.2 percent of buyers, while 38.5 percent expect to receive a 25 percent or greater discount.

Appreciation of the property is also expected by these buyers, with 73 percent anticipating a 10 percent or greater appreciation in the next five years, and 28 percent expecting an appreciation of 20 percent or more during this time. The Federal Housing Finance Agency’s (FHFA) purchase index indicates that homes have appreciated an average of 15 percent nationally since 2004, according to Move.com. The survey also uncovered the motivating factors behind a buyer’s purchase of a home. While 23.6 percent of buyers are concerned that prices are as low as they will go, 18.7 percent had a desire to take advantage of foreclosure bargains. With 21.2 percent of buyers aiming to take advantage of the greater selection of homes for sale in their local neighborhoods, 14.2 percent fear an increase in interest rates.

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