If you work with any investors right now, you know that banks hate them. Many banks do not want to sell a home to an investor unless it has been on the market for at least 15 days, and only if no owner occupant buyers are interested.
Me, I love fix and flippers. Let me tell you why.
My house was purchased in the summer of 2010 as a foreclosure for $135,000. Over the next few months I would see houses in my development continue to get foreclosed on and prices driven down.
An interesting thing happened in the summer of 2011. An investor purchased the house two doors down from me at foreclosure auction and did a very nice remodel.
My development was built in 1984, has no HOA and well… needs a little TLC.
I spent a few hours off and on over the next month or so talking to the investor, and he really liked the neighborhood. He liked it so much so that he would then purchase the house just to the south of his at auction too.
When he put the houses on the market after the rehabs in the mid 160k range l thought he was crazy. Even though they were done beautifully, I did not ever see them going for that amount.
Well, guess what happened? I was proven right, kind of.
About two months later both houses, now the two nicest houses in the development, were under contract in the mid $150’s. Much higher than I thought they would go for.
The investor was not done yet though. He would pick up two more houses, one as a bank owned REO and another as a short sale and flip both of them after a remodel.
The investor did a great job with the remodels. He did landscaping, painted the exterior as well as completely redoing the interiors with granite, tile and all the upgrades.
Now, a year later the prices in my development are up. Yes, they are up everywhere, but not nearly as much as they are up here. Thanks to this investor, and a couple of other investors who remodeled houses in this development, home prices over the last year have rose about 45% from the low of last summer. Much higher than the average of about 32% seen in Phoenix.
So while banks, and other financed buyers may not appreciate investors snatching up homes with cash, most home owners should be thanking them for revitalizing our neighborhoods and helping drive our values back up.