Best Cities For Foreclosure Market Right Now?
What would be your vote for the top 5 best cities for the foreclosure market right now? And if you could explain why, that would be great, too.
Gratefully,
MarleneM
What would be your vote for the top 5 best cities for the foreclosure market right now? And if you could explain why, that would be great, too.
Gratefully,
MarleneM
The best markets are normally the ones with high unemployment and other issues that negatively impact a person's ability to pay the bills.
The question then becomes if you can buy low enough to ride it out AND if the employment will come back. Is it a downturn or did the only large employer move so it might never come back. Buffalo NY is an example of an area that has been down a lot for a long time.
Oregon is a state that definitely suffered this last downturn. High tech in the metro Portland area and just a bad job mix.
Silicon Valley, wall street related areas and places near Enron, WorldComm and others come to mind.
If you are really buying right you can buy so far below market that you can make money even if the economy does not come back for a while. As you have implied that you would be investing at distance (another post), it might be hard to make foreclosures work without a local partner who can chase things in the specific area. Alternatively consider only locations that have good service by a discount airline. Assuming they do not reduce their schedules when the local economy is soft.
MH homes are another sweet spot given the failure of one of the largest lenders in the sector.
John
[addsig]
I agree with the areas with recent job loss, etc; but make sure there is enough there to support people who are paying you rent - otherwise you'll have to depend on flips to make a buck - much better to go into a depressed area, buy 10 house at $25k each, then rent them even at break even for 5 years or so - then hopefully your 250k legeraged investment is worth $500k or more. whereas if you flipped the homes and made $5k on each you would only have a $50 gain.
The Portland Oregon Metro area has the highest foreclosure rate in the country due to the high unemployment rate
Indiana has the highest foreclosure rate in the country. I have been buying in Indianapolis.
I thought it was Salt lake city?
Top 10 Most Stressful Cities (MSN News)
Tacoma, WA
Miami, FL
New Orleans, LA
Las Vegas, NV
New York, NY
Portland-Vancouver, OR-WA
Mobile, AL
Stockton-Lodi, CA
Detroit, MI
Dallas, TX
Wherever your at is probably the best place to be
[addsig]
I agree with Stockpro99. The best city for you is San Diego. If you cannot discover gold behind the shadows in your own backyard, where presumably you already know a little about the market and economy, why--and where, for that matter--the heck would you want to move?
Whatever you do, don't come here. Foreclosures are very much a numbers game, and they're kinda sparse here in the hinterlands. I'm glad I don't have much competition. We get maybe one a week that makes the paper, and far fewer that make it to the Sheriff's sale.
The problem with buying foreclosures in San Diego is that so many people show up for the trustee sale (or auction, as the case may be) that bidders typically run the purchase price up tp market price or higher. Fevered bidding gets the best of them. I've gone to a few, and they were all a waste of time.
Mailers don't work - people literally get hundreds/thousands of letters, postcards and packages from those who want to "help." Homeowners often don't even open them. Of the hundreds of dollars I spent with mailers (including those that used John Locke's wording for postcards), I have never even gotten ONE phone call.
I've trained with the best locally, and spoken to a dozen other "experts". Apparently, the best chance to find a foreclosure is to approach a homeowner within a few days after the filing of the trustee sale. But that means hanging around their house (they often won't open the door if you knock) and waiting for them to come home.
Now, I've had my fair share of hanging around someone else's property, and to tell you the truth, it gives me the willies. Never know what kook might get upset .... So I'm trusting my instincts and have stopped looking for opportunities to get hurt. I've hired a couple bird dogs, but none of them have been successful, either.
So I either find a successful and talented bird dog in San Diego or consider another city. Anyone know a good bird dog in San Diego, or any other city??
Thanks for your feedback.
MarleneM
There is not a question that being the first one to knock or the first one to call is what will make your pre-forclosure business. You must be the first ... period. If "gives me the willies" is your attitude then you are in the wrong business.
Brenda
http://moneycentral.msn.com/content/Common/Flash/bankmap.asp?special=bankrupt
Top forclosure states per moneycentral.
Brenda
Although I agree that if you can;t do it at home; you won't be able to do is accross the county.
But I believe that if you have the expertise you need to be in a market that will support your work. In minneapolis we have seen 15% and greater home appreciation in the last 3-4 years; wheras many cities appreciate less. Then factor in layoffs, new companies hiring/expansion, etc, and the economy of buying foreclosures is much bigger than your own back yard.
However to be successful; you will have to be willing to spend significant time in you adopted cities.
My plan is to pick 2 more cities to aggressively pursue foreclosures and spend 3 days a week in each city and employ as many bird dogs as will keep me busy. Am I the only one willing to travel to take advantage of the opportunities, or am I not thinking clearly?
MarleneM--(CA)-------------------
You'll have to define "best" before I could even try to help you.
Would you like a market where about 1/2 of the properties that get auctioned off have enough equity that they make sense to buy? Understanding that only about 5% make any sense in most markets.
Would you like a market where there is very little competition?
Do you want a market where there is no right of redemption at the sale?
Do you want a market where the opening bid is just the loan amount and costs? As opposed to where the opening bid is 2/3 of market value.
Do you want a market where the buyer comes up with 10% of the bid at the time of the auction? As opposed to the ones where you pay 100%.
What are you looking for?
Good Investing***************Ron Starr***********
my two cents
I am glad every one is throwing there share of opinion, because it just comes to show that even out of all the investors out there, there is not one "right way" or one "right place" to invest. You have to do what you have to do...mail, call, knock, travel..etc. I just started foreclosures two years ago and I have knocked and gotten som, I have worked with an agent and gotten some, I asked my neighbor about a friend in distress and gotten one, I placed an ad and gotten one...you just have to poke, poke and poke.
It all comes down on how hungry you are. I'll give you a real life example of "hungry" you may not want to believe this but here it goes... Two years a ago, an acquaintance I went to school with moved from San Diego at the age of thirty, broke and living with mom and dad, I ran into him in my town at a starbucks, he had just purchased his first foreclosure and turned my on to it. He found a "money man" and went 50/50 on all deals....TWO YEARS LATER, bought, flipped, kept, and cashed out liquid at 2.5 million to his pocket! how hungry was he!!! Very!! He just set the bar for me, and I get impatient, this guy flipped his hat backwards and ran.!!!
Gotta appreciate the guy who came to San Diego two years ago and bought foreclosures. Anyone who came here with cash to spend has made a fortune.
Times have changed, but with people spending their equity like they spent credit cards, this too will come to an end. Foreclosures are up significantly when compared to three months ago. Problem is, bidders are out there in force. That trend is likely to continue. Problem is, I am ready to buy now, and want to get 1-3 purchases closed before the end of the year..
Answers to Ron's questions:
Would you like a market where about 1/2 of the properties that get auctioned off have enough equity that they make sense to buy? Understanding that only about 5% make any sense in most markets.
Yes, definitely need equity in the property. But that brings up a more complicated issue. For example, here in San Diego, having equity is a given. We have lots of equity around here, but not enough value. Properties are falling down anf still have tremendous equity. The real problem is that foreclosure bidders attack the bidding process and raise the price to market or often, higher. It makes no sense. Might as well go hire an agent and buy a full priced property.
I want to know where to go to find less crazed bidders, but where economic trends are promising for equity build up over time on good, solid buildings (residential or commercial - the bigger the better).
Would you like a market where there is very little competition?
Yes, the less competition the better. But I'll settle for moderately sane competition. Who knows, I might even be able to partner with the competition if they are reasonable sane.
Do you want a market where there is no right of redemption at the sale?
Absolutely. Just spoke with someone in Alabama who finally had a property with the one year right of redemption expired. Problem is, if a bank has not been able to sell a property for the one year, it more than likely has serious problems. After digging around a bit, I learned that the property I had bid on had been on the market in a very hot area for 3 years - old feed store where bank was needing to cover expenses, but expenses were much higher than value of property. So yes, I need to be able to flip the property and move on, so I need a state that does not require a redemption period. Good question!
Do you want a market where the opening bid is just the loan amount and costs? As opposed to where the opening bid is 2/3 of market value.
Opening bid doesn't concern me as much as closing bid. I would like to have some equity to work with after the bidding stops.
Do you want a market where the buyer comes up with 10% of the bid at the time of the auction? As opposed to the ones where you pay 100%.
Less is always better of course, but can do 100%for medium size property.
Ron, thank you for your clarifying questions. Please ask more questions if they occur to you.
Gratefully,
MarleneM