Is there Great Value in Foreclosed Properties?
In short, no.
Before the great real estate crash in the early 2000s, foreclosed properties were almost unheard of. In the rare event that a lender foreclosed on a property, they got rid of it as quickly as possible.
Banks and institutional lenders have been kept from entering the real estate business, as allowing them to enter would create an anti-competitive environment. Lenders could compete unfairly with real estate companies, having access to federally subsidized low-cost funds via the FDIC.
Banks/lenders knew how to lend money prior to the real estate crisis, but they didn't know what to do with the foreclosed properties they were about to acquire. They learned quickly how to get rid of these unwanted properties and learned how to do it without leaving money on the table.....read more