The Golden Opportunity: Foreclosures!

In a crippled economy as today’s those that could identify the productive segments that generate opportunities will profit abundantly from its fragmentation. The banks’ crisis has created a Golden Opportunity in our local market. Florida is the State of the Nation with the higher incidence of foreclosures and buyers are acquiring real properties at historically low prices.

The State of Banking Regulators (Government) is forcing lenders to foreclosure on their defaulted properties. Foreclosures will flush out the market from toxic banks’ notes that are contaminating the securitized financial instruments. When a bank foreclosures, the property becomes part of the banks REO (Real Estate Owned) portfolio. Banks are not in the Real Estate business, as they earn their fees from lending money to their customers. Owning a Real Estate property will reduce the banks’ liquidity and their ability to get the needed capital to lend money and make money.

When the clock starts ticking, banks need to sell their REO inventory. With the great amount of unsold properties in this market banks face a very hard competition. For this reason, they are obligated to reduce their asking prices in order to sell and received sufficient cash flow to continue their banking operation.

Wise buyers must be ready and able to grasp the opportunity as soon as it presents. This means, that the investor must be financially able to proceed with the purchase and close swiftly. Also important is to know the real value of the property. Clear information and a thoroughly inspection and analysis of the property are a must. Willingness and prep rareness to go ahead with the best plan is a necessity.