This idea of the local governments buying the foreclosed homes and rehabbing them, whether to sell or rent.
I just read an article stating that bi-partisan support has put this proposal together.
http://news.yahoo.com/s/ap/20080402/ap_on_go_co/congress_housing
It’s just part of the “brilliant” plan to stop the bleeding.
How would you like to compete on a bid for a foreclosed home with the Federal Government?
I agree that this is a colosally stupid idea. However, the government is an excellent competitor when it comes to rental properties. You will be able to identify their rentals because they are all boarded up; have no copper; and have the crack dealers doing deals on the front porch! There is no-one more inefficient than the government as a landlord!
Mike
That is true. Maybe after they buy them for too much, and then fail at renting them out - we’ll buy them at really bargain based prices, like .10 cents on the dollar!
I bet that money will end up in your local Housing Authority’s coffers who LOVE to spend money foolishly to rehab their properties in the inner city. I’ve seen this first hand in the 90’s when they would spend 50-70k to rehab a house that was worth MAYBE 65k ARV. Usually (not always), the house would need to be re-rehabbed after about a year. The funding dried up quick.
These bureaucrats will rifle through that 4 billion!
I saw the same thing… It was really popular in Baltimore…
I don’t understand how that is supposed to help anyone facing foreclosure…they buy the house after the bank repo’s it - but yet it’s called “housing relief”… :bs
I’m thinking the same exact thing. Governments by mandate must resell to house people and not in it to profit. Sounds like a good investment opportunity! Of course, if they legislate that no investors can buy, then no go. I fear that this will result in massive “Hooverville’s” where foremerly foreclosed properties will be resold very cheaply or rented out for Section 8 tenants.
Don’t get me wrong, as a landlord, I love section 8 for my rentals, but I only own 1 or 2 in a single neighborhood, so it doesn’t "ghetto0ize the neighborhood.
Doesn’t really seem to make sense…if the government buys the property , the government is essentially becoming the “investor” . But, likely it is just going to turn into an unmanageable situation…most likely the homes get sold to local politicians friends for pennies on the dollar or something equally shady.
The best thing to do is market properties to investors that have their own money on the line. There are some cities that are so anti-investor or “anti flipper” that they would rather let properties sit and rot rather than sell to an investor that will most likely fix and rent out a property.
My local city council are on the verge of giving tax incentives to people who buy homes and turn them into affordable housing. I’ve yet to see the exact details, but I’m optimistic. They’re the type of incentives usually reserved for commercial properties. I live in a pretty small town and the crime isn’t like the inner-city type. I guess everything is relative though.
Does this sound like the experiment the government tried back in the days of the S&L crisis when the RTC became an REO broker?
Well that’s what happens when politicians and not businessmen run the country.
I don’t know why local governments don’t just loan purchase and repair money to INVESTORS who know what they are doing, and will rehab the houses successfully and pay the money back.
Tax incentives, schmax incentives. Give investors the money so we can do what we do best, pay it back, and make a PROFIT.
Let’s call these proposed housing plans what they really are. Plans to bail out investment bankers on Wall St. Instead of purchasing the houses themselves I have a plan for the gov’t that would make things much easier, and would benefit us all as REI. Any home that goes into foreclosure or REO goes up for public auction, goes to the highest bidder, simple enough. Any loss that the bank realizes they can apply to the federal gov’t for relief and/or reimbursement for what monies they are out. Banks are investors, just like us, if they made bad decisions with regards to lending out money, touch luck. I’m sure if I made a bad deal on a house noone, especially the Feds, is going to bail my ass out. I’ll be voting for a Dem come November but this idea of the Feds stepping in and bailing out Wall St. investment bankers pulls my chain.
We all know that this mess eventually ends up in the same place every financial mess ends up…
IN the TAX PAYERS lap. I don’t agree with it, but it WILL end up being OUR mess.
Our president has owned several businesses, although none successfully. And I bet our VP lights a cigar with a Benjamin every time oil companies post more record profits.
Politicians at the national level are well off people with a lot of money in various investments, so of course they’re gonna bail out wall st., otherwise they might have to downgrade their summer homes.