In a vibrant real estate market, such as we're experiencing, here in Western WA State, the flippers are out and .....flipping houses.
I'm seeing lots of new flippers coming onto the playing field and that can be a good thing - but it can, also, be bad.
As REOs (Bank owned real estate) continue to be a shrinking % of real estate for sale, there's lots left and many of these REOs aren't, yet, on the market - but you'll see them in many neighborhoods.
Vacant homes that have no signage.
These are referred to as shadow inventory.
Reason they're not on the market is because the banks can't overwhelm any neighborhood/geographic area.
So, they sit OR the banks sell these homes, in bulk, to investors who have the means to purchase them.
Banks aren't in the business to own residential real estate, they're in the business to lend on it.
So, having all these foreclosed homes, in inventory, hurts their bottom line and creates all kinds of financial burdens for them, not the least of which are "reserve accounts" that they are required to maintain for each REO.
So, banks are realizing the value in liquidating these houses in bulk.
They've been doing it for years.
Investors are the buyers and, depending on their level of experience, they're renovating/updating these houses and, either, renting them out (Check out Invitation Homes) or selling them off.
I look at every aspect of a property that my clients are interested in, including when the "current" seller purchased it and for how much - and I search out the, previous, condition of the home so I can gauge the updates.
I, also, want to be sure the work was permitted.
Meaning, was a licensed contractor hired to complete the project and did they draw the required permits.
Some of the updates can be shoddy and can mask issues that can be costly down the road.
So, the message I'm trying to convey, to you, is twofold:
IF you're a buyer and you're purchasing a, recently, renovated house - be sure to have a trusted source (Home inspectors DON'T, always, find problems because they're, only, required to do so much.) take a good look at the house.
If the house went under major renovation - like additional living space was added, be sure that the county is recognizing those renovations.
IF you're a flipper, do the work, right, the 1st time.
If you cut corners, that could equate to problems, for you, down the road - in the form of litigation.
Quality work is key, regardless of the quantity you're working with.
BTW - if you're interested in purchasing bulk REOs, in Western WA, contact me.
Best to ya !!
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