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Casey Prindle's Blog

By Casey Prindle | Agent in Fort Lauderdale, FL

What's happening with foreclosures in Fort Lauderdale?

When I speak to investors I often get the question, do you have any REO’s for foreclosures in the Fort Lauderdale area for sale? The true answer is that the available foreclosure inventory is almost gone. We read in the papers that there are more REO’s in Florida than anywhere else. What isn’t told is that the foreclosures aren’t getting onto the open market. Once a bank forecloses a property it can be purchased on the steps of the court house. I know a number of people that made a pretty good living buying these properties at the court house themselves. Then private equity firms caught on. As an example the Blackstone Group was buying up to $1 billion in Florida real estate last I had heard. KKR and Waypoint Homes are also enormous funds that are in the game. They have armies of people that cover the court house and outbid anyone standing around. This isn’t a good or a bad thing, it’s just what’s happening.

Let me further illustrate the point by looking at the foreclosure inventory in Fort Lauderdale.  My investor search map covers an area of 95 to the west, and the Atlantic Ocean to the east. I go up to Oakland Park Boulevard, and all the way down to 595. If we take that area and search all single family homes for sale we will find 536 single family homes for sale. If you search for only foreclosures you get 14 results. Some quick math tells you that only 2.6% of the available single family home inventory in our search box is a foreclosure! Only 2.6%! If you do the same search for condo’s you find 663 matches. Of those 663, only 21 are REO’s or foreclosures. That works out to 3.2% of available condo inventory in our search box is a foreclosure.

Some investors will now say to me, but wait, it’s still worth buying those foreclosures as they have a huge discount to the market! That’s also a misconception, in my opinion. On the single family side you do see discounted prices in REO vs non foreclosed inventory, but you’re not comparing apples to apples.  It's been my experience that a typical single family home foreclosure will not have appliances.  The owners remove appliances, external air conditioning units, and even electrical and plumbing fixtures then sell them before the bank forecloses.

The result is you can have a home that is not a foreclosure sell at $250,000 that shows pride of ownership and is well maintained. Next door a foreclosed home sells at $150,000 and the statistics show a foreclosed home that sold at 40% discount to market. What you don’t know is that the foreclosed home needs $100,000 in repair to bring it into the same condition as the non foreclosed home. In the end and after all repairs they are worth the same amount.

This is a partial repost. The full blog post can be found here at www.veniceofamericahomes.com which is my blog.

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