Investors are Snapping up Foreclosed Properties Followed by Potential Nest Builders
The economic gloom has attracted opportunists of many shades – as is usual. The investors are snapping up foreclosed properties, repairing them and then letting them out on rent. Following them are potential nest builders who want to stay in the houses they buy as occupants. They are concerned about the difficulties in picking up an affordable unit and make it habitable.
Jennifer Kuzara (32) works for a non-profit body. Since the beginning of 2009 till the start of 2010 she has given nearly 1,000 hours on a foreclosure related project. Among those who helped her were two realtors, a banker, a contractor, an architect as well as her parents. To give her project a chance to work in the locality where she wants to live she required $100,000 – all in cash. At the end of it Kuzara and her parents came to be exposed to a good amount of risk for the sake of a bungalow situated in the centre of a middle-class locality.
Although the particulars may vary, many shopping in the foreclosure dominated markets of Arizona, Florida, Nevada etc would be looking for a house similar to hers. There may be a hue and cry about the legitimacy of foreclosures but there will always be clients who want to buy when prices are really cheap and are willing to go ahead taking the risk and the challenges that come on the way.
In 2006 Kuzara was burdened with a six figure student loan. At that time the housing market was really hot. She had resigned herself to the fact that she would never be able to own a house – the end of her American dream. By 2008 she had completed her Ph.D. on anthropology and taken on a full time job with a non-profit body. Meanwhile the housing sector had begun to cool. She soon came to hear of friends buying foreclosed houses as investments.
Her shopping trips were laced with experiences. In one instance she heard gunshots – people loudly airing their views about entry of white residents. In another case the house had been taken over by squatters.
Finally the house she purchased had been cut up into apartments and perhaps this was the reason why she did not face much competition from other buyers. But finance was a problem after the bank accepted her initial offer of $39,000; then there were repair costs. The bank wanted cash payment. She however got help from her parents who borrowed against their life insurance and from 401(K) to make the dream a reality.
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