So you work for a local municipality and have Federal tax grant money to buy foreclosures. You remember, the HUD money from the Neighborhood Stabilization Program, that was supposed to stop foreclosures in urban areas.
But it seems every time you head to the auction at the courthouse steps you are unable to buy the homes. There is this problem, these pesky private investors are winning the auctions on the homes.
I know, it is so unfair. They do not have to fill out 32 forms in triplicate or have to jump through all the hoops we do to hit the bureaucrats mandate, they just show up and pay cash.
So we will keep complaining till we get the rules changed and get those private investors at a disadvantage. I mean, they are just going to turn around and try to make a profit out of the deal, while we are doing it for the good of the people.
Byrd said that out of $8.2 million that HUD allocated to Oakland in the Neighborhood Stabilization Program, about $2 million has been pegged for renovating rental units and $5 million has been earmarked for rehabbing and reselling homes at affordable prices.
So far, five houses in that city have been purchased, but not yet resold. Byrd said that once the homes are sold, the money will be rolled over to purchase more property.
HUD spokesman Brian Sullivan said the recent program changes were made after the agency heard complaints about investors winning out on foreclosure sales.
You do have an ace up our sleeves though, you have the power of TARP. A few phone calls by the guys in Washington will put the pressure on the banks to make sure you get these homes before those pesky private investors can snap up the homes at the discounted prices the people deserve.
Meanwhile, banks are issuing new guidelines to real estate agents, requiring them to give priority to local governments using federal funds to buy bank-owned homes. Some banks essentially have told agents not to consider offers from investors until everyone else has had a shot.
Oh, and did you notice, the example given showed the city of Oakland has bought 5 homes. And all 5 homes are sitting empty.
Do you think private investors would let that happen???
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These guys are using private money loans often time. Not just paying with a briefcase full of cash. Check out the private or hard money lenders in your area and you'll find they are willing to finance you with as little as 25% down and no credit check. The loan will be short term, like 6 months and the rate will be around 15% or more, but you are going to fix and flip it anyway.
Hello Sir/Mam,
I have two great places in sight, both have great potential. Pictures available request both close to 40,000 each,with an after repair value of a min. 125,000, both need rehab. One or both will well worth the investment….Please respond….
Governments are always poor at things like this. If they refurbish houses it will cost much more than if the private sector did it, and because of the bureaucracy it will cost a fortune just to go through the motions of making the purchase. Better for them to concentrate on setting the right conditions for the market to pick up, jobs to be created (in the private sector) and less foreclosures to happen in the first place.
Good post.
Regards
Dave