buying vs. renting revisited

plot said:
If you've ever gone to an auction at the court house to watch the repo'd houses sold to cover back taxes etc... most of them goto banks. they buy alot of houses and sit on them for awhile before they turn around and sell them.

They also foreclose on houses often, keep them, send in a clean up crew, then turn around and resale the house. It's not uncommon practice at all... so I'm sure they have a seperate company that fixes up houses/maintains them while they're sitting.

It's a high profitable business. In high end neighborhoods, alot of the houses have been foreclosed on multiple times... and often they have to have new carpet and whatever put in before it can be resold... the tellers definatly arn't doing that.

Banks don't buy up normal houses on the market, they go for foreclosures (which they're normally foreclosing on their own loan out to someone), or for back tax auction type houses which they essentially flip and sell, or flip and sit on for awhile. Or, alot of times they sit on it then sell it for someone else to flip.
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I have seen banks buy houses at auction but I dont think they sit on them. Forclosure auctions are usually all pre-bidded so there isnt much point showing up at all. I figured they sold them (at enough to break even and mayeb a bit more) to people who actually had the stuff in place to do the sorts of things sitting on a house would require, like real estate groups etc. Cause I mean some of these banks are SMALL, I'm talking one branch small. Savings and loan small.

Tax lien auctions are a total rip off. The stuff goes to whomever the county wants it to go to. Technically there are supposed to be open auctions here to buy the liens but they dont publish schedules or tell anyone where they are held. Youll find out like three days later '7.15 pm in conference room 3 at the federal building'.
 
banks don't bother so much with the housing market. obviously a bunch of foreclosures is bad for them, but short of that a drop in house prices doesn't bother them at all. they make their money off the lending, not off the real estate.

if they do buy houses at a foreclosure auction it's usually just to hold it long enough to clear liens and evict tenants so they can sell it with a clear title. i don't think they hold them that long.

depends on the bank i guess. i've just never come across any that do that.
 
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Coqui said:
The 60K in equity I've built (only 10K has come from paying my mortgage) begs to differ.
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Keep in mind, however, you are in the only place in the wild expanse of the midwest that is actually growing. There are millions of people with millions of houses that aren't earning a dime on it in this area.
 
dbzeag said:
Keep in mind, however, you are in the only place in the wild expanse of the midwest that is actually growing. There are millions of people with millions of houses that aren't earning a dime on it in this area.
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Which is what happens when you buy a house in a newly created subdivision and decide to go for the too good to be true adjustable rate mortgage, then find out you can't afford it so then you live in an abandoned subdivision because everyeone around you did the same.

Those houses are worthless because there's a brand new, never been lived in, house 2 houses down from the one you're trying to sell.

If people stopped thinking about the size of the house only and paid attention to all the other details, they would be in the same boat as me.

The house right next door to me is being flipped. In the 3 days I've seen a sign out, there's been already 5 different prospective buyers looking at it. They haven't even had an open house yet. They stand to make a ton of money. According to the auditors webstie and their asking price, they will be making $89,900 after owning it for less than a year. (subtratcing costs of renovations, etc.) This is a 972 sq. ft. house that is selling for almost 200K. I expect it to be bought within the month.

Why? Because the school system here is one of the best in Ohio. There's no place to expand in here so if you want that school system, you will have to buy an old house.
 
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Down here in central Florida, waiting and renting was the smart choice last year. You've got a huuuge glut of inventory and rents that have barely budged during this last housing boom.
fly and I's friend's who pulled the trigger on the town house last summer screwed themselves out of some money. As did my cousin up in DC, who will be taking $25k hit now when he sells his condo to move back down here. But you know what they say about hindsight.
Here's one thing to take into consideration, mid range townhouses and condos, all things being equal don't appreciate nicely like a house. I saw it down here in Tampa in the 1980s when my uncles were building townhouses.
Another thing to consider in the renting v buying debate - does appreciation/depreciation/resale value really matter if the house you choose is the one you plan on living in for 25+ years? My opinion, no. Like me in my current, house, this is the house my wife plan on retiring in, so it just needs to work for us. Any re-modeling or future re-modeling we do we'll do for comfort and utility and damn the resale value.
 
b_sinning said:
My in laws flip houses all the time. It just takes a lot of know how and capital.
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Capital is the only thing preventing me from flipping houses. A lot of people pick up a second house with the plans to flip it and they over extend themselves doing it, which accounts for a large part of the foreclosures out there right now... the second house is being repo'd. People buy it then don't have the money to fix it up, and they paid way to much for it to begin with. You have to buy a house at LEAST 20% below market value to flip it. People buy them at near market value and think they can fix it up and make it more valuable. Here's a good tip: you never want to be selling the most expensive house on the block.

Me and my buddy have looked at a few potential flippers, but the ones that have the profit margin we want need about 20k-30k worth of work put into them (carpeting, drywall, etc.)... yea we can get the loan and get the house, if only i had 30k laying around to invest short term. :(


As for foreclosure auctions, the ones around here are pre-bid (silent bid process basically) and you show up to see who has the highest bid and gets the house. I've only seen one NOT go to a bank, and the bidder on that one was $1 over what the bank was offering... so uh... figure that one out. My step-moms friend however showed up on the doorstep of the courthouse and walked away with 80 acres and a nice house for 40k. The house alone was worth 3x that... but that's such a rare deal that you can't count on it at all.

Also, banks don't mind foreclosures at all because they just got all the interest and principal that person paid down on their loan, plus they have a house and any equity it built up just because of property values going up. If they foreclose on the same house twice in 5 years, they're making a whole lot of money.
 
I am so moving downtown stat...walking everywhere you need/want to go kicks so much ass and I got to work in like 10 minutes this morning...yep, I'm sold...the condo hunt is on...my days of renting are over
 
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