Number of consumers interested in investing in real estate doubles since March

Dennis Norman

Investors…Have you noticed more competition out there lately?  Particularly when trying to buy foreclosures? 

If so, it is probably not just your imagination.  According to a survey conducted by Move.Com, 25.3 percent of home buyers are looking for foreclosures and forty two percent of those buyers say their purchase is for investment.  So that works out to 12.1 percent of home-buyers today indicating they plan to buy a home as an investment property which is an increase of more than 100 percent from March of this year when just 5.6 percent of the home-buyers indicated they were buying for investment.

So what do investors do with the foreclosures they buy?  According to the survey:

• 31.5 percent buy for rentals
• 26.9 percent buy to fix-up for resale
• 41.5 percent buy to house a family member until the home can be sold for a profit (I’m signing up for this program – I need to find a relative and convince them to buy a beach-front home in Malibu)

How much of a discount are investors getting off of market price for the house?

• 58.2 percent said they expect a discount of 20 percent or less
• 38.5 percent said they expect a discount of 25 percent or more
• 3.3 percent – the survey didn’t say what the remaining investors were expecting

How much money are foreclosure investors expecting to make on these investments?

• 73 percent expect their properties to appreciate ten percent or more in five years.
• 27 percent expect their properties to appreciate twenty percent or more in five years (the survey actually says 28 percent but I didn’t want to look stupid and have my stats add up to 101 percent – I assume it is a rounding issue on their part)

Another interesting little tidbit from the survey is that over 50 pecent of the foreclosure investors that responded to the survey were between the ages of 35 to 49 .

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