Lisa Simpson
Apr 7,2010
In: Finance

Court House Steps Being Crowded by Speculators and Flippers Trying to Pick up Deals

Court house steps being crowded by speculators and flippers trying to pick up deals.

At the time of the real estate boom new investors managed to flip houses within few months raking in huge profits as the price of property went up by leaps and bounds. But today there are professionals carefully testing the waters before entering the fray.

The homes up for sale are foreclosed ravages with holes in the walls and yanked off appliances. Multiple offers are coming from professionals at auctions held in the foreclosure hit states of Arizona, California, Florida and Nevada. Competition is harsh among the seasoned investors.

Two of these are Sergio Rodriguez and Brain Bogenn who nostalgically recall the year when they flipped 48 residential units in Phoenix. Rodriguez said, “A year ago bums outnumbered bidders at the courthouse steps. Now the bums are way outnumbered.”
The year 2009 had seen 4,661 foreclosed units change ownership within six months of purchase – it being an 81% increase from the previous year according to RealtyTrac. The flipping in the Californian counties of Riverside and San Bernardino increased by 45% to calculate to 17,203. In Las Vegas, the foreclosure capital of the country, flipping went up by 38% involving 8,042 estates.
Across the nation flipped homes spiked by 19% to count 197,784 last year. The final numbers may go up because some of the houses purchased during the 4th quarter may be flipped this year noted Darn Bloomquist of RealtyTrac.
The sales could get more encouragement from FHA that is lifting the anti-flipping rules for a period of one year. It became effective from 1st February. FHA borrowers will be able to avail of foreclosed homes form the owners who have owned the house for less than 90 days. This will allow first time nest builders to try their luck with houses renovated by the investor said Vicki Bott of HUD in Washington.

This change will also facilitate the clearing of properties from places like Phoenix where the foreclosure rate is as high as 1:124 – last February. It was the 9th highest in the state as per the findings of RealtyTrac.
The steps of Maricopa County courthouse in Phoenix is crowded with investors in dark glasses sporting ear plugs connected to their mobile phones clustering around the auctioneers. The bidders speak in hushed over the phone with the investors they are representing and with those they plan to rent out the units. They come to an understanding about the maximum price to be bid.
Frank Gerola who acts on behalf of customers of PostedProperties.com said, “It’s like a high-stakes poker game out here.”