Buy, fix, sell… buy, fix, sell… buy, fix, sell… better known as “flipping” is something the local government may be getting into soon. In these times, when foreclosures are flooding the market, it’s difficult for people to find the money (or credit) to participate in flipping for profit.
Some East Bay counties like Alameda and Contra Costa will receive $24 million to “buy, fix, sell” abandoned and foreclosed homes. The goal is to stabilize neighborhoods by cleaning, fixing, and selling houses that sit vacant to lower-income buyers. This program, due to begin early 2009, may also receive more funding from the housing recovery bill that President Bush signed earlier in the year.
Several agencies plan to join forces with non-profit groups as Habitat For Humanity to buy ravaged, unwanted homes from willing banks. However, the downfall remains that agencies are going to have to make incredibly low offers to the banks (approximately 10% to 15% below today’s market value) with no certainty that these homes will even sell. Another concern is that if the government pays more to buy and fix homes than they can sell them for, it may prevent buyers from seeing any profit when home values increase. And on top of that, the government is unsure if banks or lenders are even going to participate at this point.
Contra Costa County will be allocated $6 million and county officials say they plan to flip 50 to 100 properties in a five-year timeframe. The county has had approximately 4,000 foreclosures just in the last few years.
Too little too late? Do you know the same amount of money one year ago by the federal government could have been spent keeping millions of families in their homes?
Get more details on State and Local Neighborhood Stabilization Program Allocations
