Florida ranked among the top 10 states for highest foreclosure rates in 2017 despite the number of foreclosures dropping by 45 percent compared to 2016. In Florida last year, there were 24,215 foreclosure proceedings filed, compared to 43,772 in 2016, according to ATTOM Data, a multi-sourced property database.
South Florida, still has the nation’s highest foreclosure rate at 1.3% and it stands to reason there are thousands of foreclosed homes to invest in. With the numbers reducing, the right investment may be harder to find, but savvy real estate investors are still finding them, and holding or flipping them profitably! The trick to turning a profit without falling prey to problems, is understanding what put these properties into foreclosure in the first place.
What is driving Foreclosures? Nationally, foreclosure filings for 2017 fell 27 percent compared to 2016, reaching their lowest level since 2005, according to the report. Foreclosures are a mix of new and legacy problems. Defaults on mortgages, delinquent property taxes, fraud, flawed court systems and banks still playing catch-up are all part of the problem. Though the situation is better today, property owners are still falling victim to a flawed system which hasn’t properly delivered. You still hear of properties that have fallen back into foreclosure as a result of lending criteria better aligned to interests of banks, mortgage providers and financiers.
Distressed property sales are no pushover. If you think, distressed property owners are all in the market to sell – think again. The decision to hold off a sale or foreclosure can be tied to various reasons. One reason is that property owners that have lost trust in parties that offer to ‘help owners out of foreclosure’ because of the dubious nature of transactions. Unscrupulous operators tend to tarnish the image of the lending business, delivering a setback to owners. Another reason is tighter controls, new rules and regulations to reduce turnover, making it harder for owners to sell, in the face of ready and interested investors. Yet other owners are not convinced they are really going to lose their properties, and delay taking action. Or they are bullish on their property value, delaying foreclosure.
Best practice. Today, investors need better strategies, more convincing arguments and smarter marketing tactics to win-over distressed property owners. Online foreclosure listings like Trulia foreclosures, foreclosures.com, Yahoo foreclosures, MSN real estate are a great start-point. Foreclosure auctions, Banks & Mortgage lenders, Real estate wholesalers and investor groups are all great sources of market information. Title companies mortgage companies, brokers and realtors are good for business based on referrals. Knowing where to look for distressed properties and foreclosure deals, is only one side to investing in the thousands of distressed properties in South Florida. Learning how to prospect and how to make winning offers is the key to sustainable long-term gains. Invest in the right education, market knowledge, capital and financing, before investing in distressed property.
If sourcing, buying and recycling foreclosure properties for profit is your goal, practice due diligence first!
