Buyer’s Market “Stories”
At the market peak around 2006, the real estate “stories” were all told by Sellers: what they had just sold for, and how much it exceeded their (dramatically lower) cost.
So, in a historic Buyer’s market, it stands to reason that the stories are now being told by Buyers — presumably, about the killings they’re now making.
In that vein, I recently heard about a Buyer who, in a single deal, had just scooped up 20 North Minneapolis properties for $200k in cash.
Yes, that comes to $10,000 apiece. And yes, there are documented sales recently at that price, in that neighborhood.
So, in theory, it’s plausible.
However, before you feel like you missed out, consider a couple things:
–Homes that sell for $10,000 are, by definition, not habitable. Making them habitable can cost many multiples of the purchase price.
–The holding costs associated with buying dilapidated properties are considerable. To pick just one example, the city of Minneapolis now assesses a $6,000 abandoned building fee annually. Many of these homes come with a long trail of unpaid liens, fees, fines, etc. that may — or may not — be picked up at closing, leaving the Buyer on the hook.
–Who exactly is going to rent — or buy — the rehabbed homes? At the moment, there is no sign that foreclosures are abating, at least in many Twin Cities neighborhoods.
Are there opportunities in foreclosures?
But just like Hollywood, the real estate stories that the public hears have often been edited and/or embellished to spice things up.
P.S.: often, it’s the stories you don’t hear that are the most interesting. In that vein, there’s a saying that the reason dolphins have a reputation for saving drowning swimmers . . . is that you don’t hear from all the ones they push out to sea.