Investors buying up foreclosed homes to rent

8:03 PM, Sep 21, 2012   |    comments
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Tampa, Florida- Are you having trouble trying to cash in on some of the low home prices and low mortgage rates? You are not alone.

Mercy Martin-Crouse is looking to downsize and stay in the same Tampa neighborhood. Mercy says, "I am getting to an age where I want a smaller place- a smaller yard."

Her budget is about $130,000, and she hopes to find a home in six months. Mercy's realtor with Coldwell Banker, Erika Stepp, warns her client the search may take longer. 

Stepp says, "There are 61 properties available at this moment, and it's a little harder to come across perfect home, you're looking for, but don't lose hope."

But the search is about to get harder. There's growing competition from condo buyers facing large down payments.  

"The down payment going on a house or town home- you only need a 3 ½ percent down. Where if you were the same person trying to buy most condominiums,  you'd have to put 25 to 30 percent down," says Dale Nabors, realtor with Coldwell Banker.

Large investors such as Blackstone, a private equity firm, say Tampa is one of about a dozen cities nationwide where they are buying single family homes, fixing them up and renting them out.

A Blackstone spokesperson, Peter Rose wrote this in a statement to 10 News,"We are investing in post foreclosure single family homes in a number of cities across the United States. In any one of those cities, the total invested will be a tiny fraction of $1 B"

Erika says, "It depletes the market, it's smaller, less to look for."

Mercy is concerned about her chances of finding the right home sooner than later. She says, "Not good. Not good at all."

Dale says about half of the homes they sell are bought by small investors who target homes priced at $100,000 or below. 

But now realtors are seeing larger companies buying hundreds, if not thousands of homes across the state, and even across the country, ranging between $100,000 and $300,000. These are not to sell, but to rent.

Realtors say single family home rentals could help future buyers with bad credit today. Dale says, "In one aspect it could give them somewhere to live, rent, correct their credit and buy somewhere down the road."

Mercy hopes investors won't slow her plans. She says, "I want to do it as soon as I can I want to find my perfect little home." 

Realtors say as banks sell foreclosed homes, lenders release more homes into the market, giving potential home buyers a new batch of homes to pick from.

The long term goal for these investors is reportedly to sell the homes once the real estate market turns around and sell them for a profit.

Isabel Mascarenas

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