The Foreclosure Crisis Of Foreclosure

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Foreclosure is one of the most difficult things to face. A home is usually the single largest investment for the average consumer and to lose that is very devastating and hard to recover from. Today, I work for one of the largest foreclosure homebuyers in Florida. They buy about 500 homes per year only from the foreclosure auction. This company has been investing since before the crash and they have shared their knowledge and experience with me over the past two years so that I don’t make the same mistakes they did. Some of the most important lessons they learned from the crash are as follows: Don’t invest outside of what you know just because everyone else is doing it; don’t over-leverage your properties by taking out multiple mortgages…show more content…
Novice inexperienced investors with no exit strategy equals a lot of foreclosures. While this was absolutely devastating for all of these people, the more experienced and savvy investors, who bought things they could afford, turned their inventory in to rentals. It took some time for the banks to foreclose but when they did, all the people with trashed credit scores and no money saved up had to live somewhere. Since buying was out of the question, all these people had to rent. The market has made a recovery and home values went back up but a lot of the overnight investors still have trashed credit history and no wealth built up and still they cannot buy houses to live in. They must continue to rent and the investors who were able to make it through the crash will continue to make money and build wealth through the properties that they were able to hold and rent. The rental market is huge here in South Florida. Hedge funds are able to pay more than the average investor who wants to fix and flip because the exit strategy is different for them. They are focused on long term capital gains instead of a 3-6 month turn around. Some of the people who were negatively impacted by the crash may never be able to buy again; those people

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