A factor in getting our economy back up an running is to get many of the componets of the real estate industry back to work.  One aspect of this is the buying of distressed or foreclosed properties, rehabing them and putting them back on the market!  I talked in an earlier blog about the benefits to the market by having this process in place.

Up until today, there was a 90-day Seasoning Rule which meant it could not sell until after 90-days from the day the investor had purchased it.  There were some legitimate reasons for this but it also hampered the ability for investors to make a profit.

Apparently HUD saw the advantages and realized that removing this restriction would help speed up the recovery process.  this would be especially helpful in communities where the foreclosure activity is high.

HUD Secretary, Shaun Donovan, announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed or distressed properties.  This is part of President Obama’s commitment to addressing these types of properties.  Secretary Donovan announced there would be $2 billion in Neighborhood Stabilization Program grants to local communities and non-profit housing developers to combat the effects of vacant and abandoned homes.

This is all good news at a time when it will be well positioned to have a huge impact on the real estate industry as it surges forward!  My hat goes off to HUD Secretary Shaun Donovan for his efforts on our behalf!

This house which was just purchased by investors will be back on the market in two weeks because of this new action by FHA.

We need the small local investor!

I wrote up an offer this past week for a small investor to buy a foreclosed single family home in a suburb of Rochester. As I was working with it, I realized how much the neighborhood needs this “small investor!”

I had sold a home in this neighborhood a few years earlier and I was familiar with the values of the homes. At $70,000, this home was selling for $50,000 under what the average values are for this neighborhood. This small investor was going to clean, paint, carpet and repair this home, then put it back on the market for a price that would match the values of the neighborhood. In other words, flip it, a word that refers to process of buying a home, fixing it up quickly and selling it for a profit.

Nobody out there is giving these guys any assistance! Nobody is making it easy for them. They are using their cash and hard work! They are taking all the risks! The end results are a house is restored to its neighborhood value. Hopefully they will end up with a profit to make it all worthwhile too!

Think about it, who else is doing something like this with no government involvement? Next time you see one of these guys, give them a thumbs up! We need the small local investor now more than ever! Our neighborhoods need them. The economy needs them!