Investors driving real estate recoveryPosted: Updated:
PHOENIX – The quick flip used to be the hallmark of home investors, but in a market crowded with foreclosures and families who don’t have the credit or money to buy there is now a new trend in investing that could be a good deal for those families who are facing foreclosure and don’t want to move.
Chris Eymann, with SellWholesaleHouses.com, has been buying foreclosures at auction since 1999. He said lately things have changed. Now instead of buying to flip, investors are buying to rent.
“They buy and hold and get 12 to 14 percent return and hopefully get a big capital gain in the next couple years,” Eymann said.
Nathan Kalas and his family consider their Anthem house a home and are hoping an investor will come along to assist them in staying.
“As long as we meet the requirements of our agreement, we get to stay in it and when the time comes, we buy it and the investor's out of it,” Kalas said. “They've gotten their profit and we've gotten our home.”
Kalas called it a win-win situation.
Kalas is working with Tiffany Young with RE/MAX Fine Properties. She said during this recession her role as a real estate agent has evolved.
“Most of the time now I'm matching investors with people who want to keep their homes,” Young said.
She said often the investor and renter will have a deed for contract.
“A contract between the investor buying and the homeowner or tenant and they can write off the interest like they are paying a mortgage,” Young said.
Eymann said it happens all the time.
“The investor buys and leases to them as they repair their credit and get back on their feet then they have the option to go back to the investor and buy the house back from them,” he said.
While some investors still buy to flip, most buy to rent and plan to sell once the market bounces back.
Regardless, Eymann said this trend is making a difference.
“As they eat up the inventory and the inventory shrinks, prices will increase and it will drive our market back up,” he said.