Inspectors will be doing bulk inspections soon.

[Nick Gromicko]

The Obama Administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, are very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors.

There are currently about a quarter of a million foreclosed properties on the books of Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) and millions more are coming. Late stage delinquencies still in the pipeline number close to 2 million, according to a new report from Lender Processing Services. It gets more amazing... foreclosure starts outnumber foreclosure sales by two to one!

Under the plan, investors will be able to get in the range of 25, 50, 100, or even 500 properties per deal.

One day soon, inspectors may get calls that sound something like this: "Hi, can you inspect 100 properties for me?"

[Bob Elliott]

Those kind of investors would not even both with us.

[Nick Gromicko]

Investors are business people and don't mind paying for valuable information.

I used to give a talk three times a year to the biggest real estate investor group in Philadelphia. Over the years, they gave me many hundreds of inspections.

[William C. Chandler]

ones who call me will pay $25 to $50 per inspection

[Bob Elliott]

Originally Posted by gromicko

Investors are business people and don't mind paying for valuable information.

I used to give a talk three times a year to the biggest real estate investor group in Philadelphia. Over the years, they gave me many hundreds of inspections.

I hope you are right.

Personally I know several groups and they sometimes use me but never even open the reports.

They simply gut the entire thing and care less about my reports since an average home rehab around here has an average cost of $70,000 or so however it is the people buying these upgrades that need to be wary as many of the upgrades have issues.

The flips that will result are good for business I agree ,but feel for the reason I stated more than a windfall from these groups.

Win/Win either way as it stimulates the market.

[Kevin M. Leonard]

White House wants to convert foreclosed houses to rentals

[Paul Maggiore]

Yeah that program will work

Maybe after that we can shut down both Fannie and Freddie.

[Doug Edwards]

Originally Posted by wchandler

ones who call me will pay $25 to $50 per inspection

Exactly! Because they know they will find someone who will do it for those prices.

[Nick Gromicko]

That's not been my experience with large real estate investors. They are the best-paying clients IMHO.

[Tim Spargo]

Hard to say for sure, but would seem that Investors that are buying in bulk are spreading risk in #'s. Buyers of commercial and residential property that are purchasing home's and buildings *one at a time* for personal or investment use are taking risks and analyzing them *one at a time*. They would want and would benefit from a real estate inspection.

In contrast....
Where an investor that purchases 50 homes in bulk, may want to sample a few... they probably are purchasing the homes w/out inspection and contingency periods anyway...I mean, what would be the point..??? "I'll buy 50", "But not *those three*"

Homes that get foreclosed/short-sale'd that are bought, flipped and sold get inspected... probably more than 1/2 the time. That's good for our industry, and as I've stated previously, and more importantly, probably a good service for the buyer.

Having an industrial type buyer buy a *whole bunch 'o houses* is bad for a whole bunch 'o reasons. For one... turning entire neighborhoods into rentals is bad.

I think there are soooo many homes still waiting to be foreclosed on, they are trying to prop up/hold up what ever "stabilizing" they feel they have accomplished. It's REAL simple, when the Job market stabilizes, housing will follow, then appreciate again!

Wouldn't you, if you were up for re-election this year?

[John Shishilla]

I have to agree with Nick. At least they need to know what they bought, what they need to do with them and the faster the better.

[Vince Santos]

I work with several investors and some send me more work than any other source. With the number of Metro Detroit foreclosed - bank owned homes there's no shortage of investment opportunities. It's been my experience that some investors will skip on an inspection because they plan on gutting the place anyway but others, less handy, want an inspection so they know how much work is needed.

If this program is put into place I expect to see a significant increase in investor inspections. Part of the problem though, at least in my service area, is finding people to rent/purchase homes in areas where people are trying to get away from. You can drive around neighborhoods in Detroit and every house is boarded up and in several cases the houses are actually in decent condition. If the neighborhood isn't what people want there's no reason to buy vacant homes in the area.