Oppenheim Law Explains How Short Sales and House Flipping Can Bailout South Florida Homeowners
WSJ reporter, James Hagerty, arguably one of the best reporters covering the real estate crisis and with whom I speak with from time-to time wrote a great article this morning concerning professional investors who are going to auction, fixing up the houses and then flipping them for a profit. (Also take the time to look at the slides and related comments).
Unlike the flippers of the past, these folks are true professionals as this IS their business. They are not cops, firemen or teachers by day and flippers by night.
In fact, OppenheimLaw and Weston Title represent a number of these types of professional groups. They are all well funded and clearly taking advantage of the fact that the Banks are drowning in too much stuff and thus many times are clueless to the true value of an asset.
Further, as we have explained before, the Banks would rather get back cold cash now than continue trying to make old loans work through loan modifications, when they know the likelihood of re-default remains high. That is why we at OppenheimLaw and our sister title company, Weston Title, are calling 2010 the “Year of the Short Sale.” Banks actually still do about 20% better according to a recent Federal Reserve study when they allow a short sale to proceed as opposed to the Bank proceeding all the way through the foreclosure process. Of course with millions of homes that have already been foreclosed upon by the Banks, the Banks have to somehow get rid of their unwanted inventory.
One word of caution: if you are thinking of becoming a “professional flipper” do your homework; and do not think for a moment that there is a title company out there that will allow you to use the funds from the final buyer as your source of funds to purchase the property at the courthouse’s steps or in a short sale. That practice is now dead.
Thus, if you are in a position to look at flipping as your way to help bail yourself out from being underwater to treading water with your head up high… call me!
From the Trenches