bsr I kind of agree with Stan a little here. One thing that doesn’t quite jive with your logic to me is that all these foreclosed homes will “eventually” fall into rental space. I am puzzled for a few reasons. One, buying income property is harder to finance then owner occupied. At the moment there are VERY few properties that pencil out as rentals even in the best of credit environments. Now we are in a much more aggressive credit crunch making it even harder for rentals to pencil out. Also in order for housing on teh whole to find price reductions all the foreclosures coming on the market need to sit awhile and then face massive price cuts. So when you say the foreclosed homes eventually fall into rental space, things kind of don’t align to me and the argument gets blurry. Is it, massive foreclosures that sit for awhile, flood the inventory and bring pricing down, or is it massive foreclosures don’t reduce to much because they are bought up and become rentals?
IMO I think most prudent investors who buy income property will wait until these properties pencil out substantially better then they do now.