Fannie and Freddie are selling houses like Costco sells toilet paper!
With homeownership rates dropping like dresses on prom night and so many families experiencing the sting of foreclosure, rental demands are skyrocketing, which has investors pawing at the doors of homeowners with saliva dripping from their ravenous mouths. Why are investors exhibiting Cujo-like characteristics, you ask? Because the market conditions are ripe for investors to buy dozens, hundreds, and in some cases thousands of homes at huge discounts.
BUY HOUSES IN BULK
But is it a smart move to purchase so many properties and maintain such large portfolios at once? Some critics are concerned that wet-behind-the-ears companies like Waypoint (who focuses on the Bay Area and Southern California) could experience costly rookie mistakes along the way. Waypoint claims to have the technology and infrastructure to succeed, so let’s put it to the test, shall we? Waypoint’s system of algorithms, google maps, and inspector/appraiser reports, calculated a bid of $103,000 for a three-bedroom bungalow in San Bernardino. Joe Maehler, Regional Director of Waypoint’s Southern California office, investigated comparable homes that the company already owned to find that a higher bid would be justified. Plus, the home had other amenities like a pool, which would bump up the price yet again. The auctioneer kicked off the bidding at $114,750 while Maehler set the maximum bid at just over $130,000.
So they are doing drive by’s (no, not low-riders and oozies) to estimate renovation costs, based on the condition of the windows, lawn etc. Sounds pretty scientific to me…NOT!
PROPERTY MANAGEMENT SUCKS!
The company plans to buy properties, paint them, install new carpets, appliances, and fixtures, averaging costs at around $25,000. Wonder what these seasoned pro’s will do when they walk in and see mold, or lead paint? Waypoint seems to be well-intentioned and makes efforts to keep homeowners in their homes during the transition process. However, only ten percent of homeowners have actually hung around to watch the transition. Shocker.