The American dream is for sale to the highest bidder at the podium on the second floor of the Hillsborough County courthouse.
In Tampa, folio # 06-9194 is a house built in 1960. It is 1300 square feet with two bedrooms and two baths. Veteran foreclosure investor Bob Koshler says no one is going to touch this house, "It's too much; it won't go," Koshler says, adding that his research shows there is not enough equity in it to make a profit.
The home’s market value is listed as $161,000, which is $8,000 below the bid price. "The majority of the homes that are coming up for sale have very little equity, and that's why they are coming up," Koshler further explains, "They could not sell them." So in this case, the bank made the bid to buy it back.
Koshler says there is big money to be made here, but you have to do your market research. The discounted prices may vary. "Unfortunately, a lot of people come down here and make an emotional decision. They buy property, and they overpay for property," says Koshler.
In 2006 Koshler had a great year. "Last year I bought 19 houses for the year," he says. But he adds that he looked at about 3,000 houses in the process. These foreclosure houses are financial landmines if you do not know what you are doing.
For example, a 3 bedrooms and 1 ½ baths in Plant City was up for sale at $95,000. With about $30,000 of equity built in for the investor, it is a great deal. But the homeowner showed up to the sale and said he was filing for bankruptcy. That can tie up the home for months. The high bidder could eventually lose their money and the home. But fortunately for the investor, it sold anyway. "It's not stopping, they keep bringing in boxes and boxes of them," said Tamara Wondrow who tracks foreclosures in Hillsboro County with a company called Foreclosure Disclosure.
The number of foreclosures keeps going up. "It's probably about double, actually it's the worst I have ever seen it in 11 years," says Wondrow. She says banks are willing to take a loss on a home, but not enough of a loss to make it extremely profitable for investors. That's why Koshler is more cautious than ever this year. "Unless you can pick something up that has tremendous equity, it could be a big mistake," explains Koshler.
But if you know what you are doing, this is only the beginning of a great year for investors, and a tragic year for some homeowners.
