CAR I think you are making immense speculation that plays to the average poster but I don’t believe is close to accurate. Show me ANY sort of proof at all of the 40% number. Any at all. Look through tax rolls all you want, post internet announcements of huge PPIP purchases here in San Diego, I would be more then happy to read about them. That is staggering. So places like Encinitas, 4S, PQ, Carlsbad, Scripps, Tierra Santa, PB, OB, UC… some entities somewhere are scooping up these large quantities of homes (that we dont know about) according to your premise… Sorry no way do I agree. Not in the least.
Second off, how can you even question what a lender will price an REO at? How can you figure a home that fetched 900k will magically even list at 750k, and if it is listed at 750k wouldnt it be a more accurate presumption that it will be bid up if it went pending at 900k? You are making this absolute leap of faith that any REO is priced well below market and it will not ever get bid up. Take a look at the Beechtree listing in Encinitas. It was priced incorrectly by the lender and got swarmed. In fact, flippers most likely have LESS liquidity benefits over institutional lenders and will be MORE likely to cut prices FASTER if a home doesn’t sell.
Third, taking risks doesn’t entitle anyone to any reward big or small. That was never said or implied. The essence of your argument is that EVERYONE should be entitled to EVERY home regardless of individual accrual of resources. That is an awesomely scary statement. The fact is that ANYONE can go to a trustee sale. If you don’t have the cash then you cannot. Why is that not fair? It doesn’t matter if it is a flip or not a flip. People who can buy for cash will have access to additional opportunities. It is a bit scary that you opine that individuals who have worked hard to accrue money should not be allowed to take advantage of that work. What if they were to buy for primary occupancy? Change the system, but do not penalize them. Or should they not even be allowed to buy for cash on the resale market either? Wouldn’t the cash offers they put out drive the market up because someone who finances would have to overbid to get the financed offer accepted?
Again, you are blaming individuals who are trying to make money rather then a system that is inept. A fair system would simply 100% NOT ALLOW people to buy homes who couldn’t afford them. You want equitable solutions then make everyone come in with 30% cash. Yet wouldn’t that eliminate alot of people from being able to buy a home? Stop FHA and low down loans. Prevent the problem by forcing large equity stakes. I think that is best but many would call that highly unfair, perhaps even racist since that could effectively kill the chances of many minorities to buy a home.
