The insanity is in full swing, who buys sight on unseen? (Miami: appointed, real estate market)

[ElGuito]

I saw a listing on Zillow, sold as is and with the warning not to disturb the occupant, furthermore no admittance into the house by prospective buyer, agent or house inspector. And full payment in cash was expected. Also in one of the Yellow/Red zones of the Neighborhood Meter of this section.
Even for those experienced in flipping houses, would they take such a risk?

I suppose that a foreign or out of town buyer, with lots and lots of money, may not care much about losing on the purchase, it's possible they are buying the location and will demolish and build brand new.
I haven't had to deal with realtors in several years, but what I saw this time is that many of them are into the flipping for themselves or for an associate, some are making extra money hosting those "learn to flip houses with little or no money" seminars.

And congratulations on the sale and profit, not all investor purchases are favorable to the seller, most are still just trying to get out of a bad situation.

[hurricaneMan1992]

Investors are buying properties more like stocks than real estate. It is more like a paper asset that one "speculates" can only go up--despite it's numerous flaws with deferred maintenance and code violations. And we all know what happens when stocks get over-bought...

[bale002]

Originally Posted by Wild Style

So then, the end game is rent until you break even, or earn a profit ie initial investment plus some percent over that, then sell? That would make sense, because whatever the homes are going for once things fall apart, it wont matter. You already earn a profit, and anything else is just icying. Good point sir, good point.

I think the smarter ones will sell early, to the suckers, if prices rise too fast beyond a certain point and then try to re-invest the proceeds in other "undiscovered" neighborhoods to repeat the process; otherwise, if prices remain stable, they hold on to them and keep collecting their 10% or so rental yields as prices rise slowly.

The "suckers" come late on hype and overpay.

Yes, not unlike the stock market, except that the "smart" types of investors get their hands dirty early, getting personally involved in any renovations and ongoing property management, while, yes, the dumb ones treat it as a paper asset and they don't know what they are doing.

[tallrick]

Property taxes and insurance erase gains in this market. A hurricane would mean party over for sure. Unfortunately 2014 seems like another disappointing year without a major hurricane.

[071402]

Property Taxes, insurance, HOA and realtor fees...

[valicky]

All this investor buying is so bad for neighborhoods since it's turning what used to be owner neighborhoods into renter neighborhoods. Renters almost always don't take care of properties as they should. It's also so much harder for someone who wants to buy a home to actually live in it.

Congrats on the sale CubanChic. I'm sure it feels good to have that done and over with. My fil lives a few blocks east of there by Florida Christian and I haven't seen that happening there yet. So far it's mostly very long time homeowners. My neighborhood, on the other hand, in West Kendall, is turning over to investors as each house goes up for sale, unfortunately.

[Cubanchic]

Originally Posted by valicky

All this investor buying is so bad for neighborhoods since it's turning what used to be owner neighborhoods into renter neighborhoods. Renters almost always don't take care of properties as they should. It's also so much harder for someone who wants to buy a home to actually live in it.

Congrats on the sale CubanChic. I'm sure it feels good to have that done and over with. My fil lives a few blocks east of there by Florida Christian and I haven't seen that happening there yet. So far it's mostly very long time homeowners. My neighborhood, on the other hand, in West Kendall, is turning over to investors as each house goes up for sale, unfortunately.

Thanks Val! It was bittersweet because of all the memories of the kids growing up there and also my memories of growing up in the area, but lately in the last few years it has become too aggressive with too many people and frankly we had enough.

It is a shame wiTh the investors turning them into rentals. I feel bad for my boys when the time comes around to buy a home..around Olympia Heights and Westwood lakes you see invitation homes rental signs everywhere. Sorry to read that Kendall is going through this.

[ElGuito]

From what I hear, investors prefer to flip, because rentals make them the landlord and now they have to upkeep properties all over the place, in general renters are more protected than the landlord (legally) and even if there is a well written contract enumerating every single possible situation, the renters do not care about taking care of the property. On a 1 year contract, the investor could find his property needing to spend a good amount of his previous annual profit to bring it back to pristine status.
I am talking about single family detached houses for rent; in a condominium/apartment building the landlord can visit, on foot, every day, to say hello and eyeball all the holes made in the walls.

For people who do their homework, why would You pay an Investor, say $350,000 because of the pristine new floors, granite counter tops, stainless steel appliances, designer paint treatment, when You can get the same house, for, say $230,000 and thru some years do all the above improvements. Unless the house is obviously sinking, most of the "selling points" are purely cosmetic, not structural or functional.

[straight shooter]

I am afraid to say, but Tallrick is going to be proven right real soon. The bubble is already in the works and the question is when is it going to burst once again. Apparently people have a short memory considering that we just went through this from early 2000's - 2008, but like Tallrick says it isn't their money so they will simply walk out when ---- hits the fan.

[oronzous]

Does anyone follow the foreclosure online auctions? Those are a prime example of people buying sight unseen. Cash only, of course.

I did follow them for some time, until i realized the only bargains left are in undesirable neighborhoods. Banks know what they can get for good properties.

After you factor the expenses in (repair, fees, some legal advice, the cost of having your cash sitting idle) most property in decent areas (be it suburbs or close to the beach) go for the same price as those you can actually go and take a look at.