In this down-turned economy, many houses have been foreclosed upon. If you are in the financial state where you can afford to buy homes at a very low cost and have them renovated to attractive status, you may consider what some buyers are doing.
When Vena Jones-Cox entered the foyer of the once-grand Colonial-style home in downtown Columbus, Ohio, she stepped onto a wood floor that was so moldy and mushy that it actually wiggled. As Cox proceeded down the basement stairs, they disappeared from underneath her.
"I found myself lying on the floor," says Jones-Cox, 45. "Staring at a dead rat, by the way."
The house tour from hell didn't stop her from making an offer on the place. While she was at it, she bid on some other houses, too. Forty nine houses, actually.
She's paying $3,000 for each, a bit more than the cost of an Apple Mac Pro. "We're at a bottom," says Jones-Cox. "I mean, where else is there to go but up?"
The idea is to arbitrage other people's misery. With the ranks of the rental class expected to swell, investors can buy houses at clearance sale prices, pour some money into repairs and then take advantage of the difference between their low cost of capital and the rent they receive. Often, they bank cash from day one.As the greatest real-estate fire sale in the history of the United States rages on, the bulk buy is the dead hot deal of the moment. In some of the most foreclosure-ravaged parts of the country, it is almost as if the housing market has become the new big box store, with investors wiping out whole shelves at a time.
"They aren't just buying one rental property," says Oak Park, Illinois realtor Kyra Pych. "This is a frenzy. They are loading up."